ACCA Syllabus

Financial Accounting (FA/FFA)
Financial
Accounting
(FA/FFA)
Syllabus and study guide
September 2023 to August 2024
Designed to help with planning study and to provide

detailed information on what could be assessed in any
examination session
1 © ACCA 2023-2024 All rights reserved

Contents
1. Intellectual levels ..................................... 3
2. Learning hours and education recognition
................................................................... 3
3. Qualification structure ............................. 3
4. Guide to ACCA examination structure and
delivery mode ............................................. 4
5. Guide to ACCA examination assessment 4
6. Relational diagram linking Financial
Accounting (FA/FFA) with other exams ....... 5
7. Approach to examining the syllabus ........ 5
8. Overall aim of the syllabus ...................... 5
9. Introduction to the syllabus...................... 6
10. Main capabilities ................................... 6
11. The syllabus .......................................... 7
12. Detailed study guide.............................. 8
13. Summary of changes to Financial
Accounting (FA/FFA)................................. 16

2. Learning hours and

1. Intellectual levels education recognition
ACCA qualifications are designed to As a member of the International Federation
progressively broaden and deepen the of Accountants, ACCA seeks to enhance the
knowledge and skills demonstrated by the education recognition of its qualification on
student at a range of levels on their way both national and international education
through each qualification. frameworks, and with educational authorities
and partners globally. In doing so, ACCA
Throughout, the study guides assess both aims to ensure that its qualifications are
knowledge and skills. Therefore, a clear recognised and valued by governments and
distinction is drawn, within each subject regulatory authorities and employers across
area, between assessing knowledge and all sectors. To this end, ACCA qualifications
skills and in assessing their application are currently recognised on the educational
within an accounting or business context. frameworks in several countries. Please
The assessment of knowledge is denoted by refer to your national education framework
a superscript K and the assessment of skills regulator for further information about
is denoted by the superscript S. recognition.
3. Qualification structure
The qualification structure requires candidates who wish to be awarded the ACCA Diploma
in Accounting and Business (RQF Level 4) to pass the Business and Technology (BT)/FBT,
Management Accounting (MA)/FMA and the Financial Accounting (FA)/FFA examinations
and successfully complete the Foundations in Professionalism (FiP) module.

4. Guide to ACCA 5. Guide to ACCA

examination structure examination assessment
and delivery mode ACCA reserves the right to examine
The Foundations examinations contain anything contained within any study guide
100% compulsory questions to encourage within any examination session. This
candidates to study across the breadth of includes knowledge, techniques, principles,
each syllabus. theories, and concepts as specified.
All Foundations examinations are assessed For specified financial accounting, audit and
by two-hour computer-based examinations. tax examinations, except where indicated
otherwise, ACCA will publish examinable
The pass mark for all FIA examinations is documents once a year to indicate exactly
50%. what regulations and legislation could
potentially be assessed within identified
examination sessions.
For this examination, regulation issued or

legislation passed on or before 31 August
annually, will be assessed from 1 September
of the following year to 31 August of the year
after. Please refer to the examinable
documents for the exam (where relevant) for
further information.
Regulation issued or legislation passed in

accordance with the above dates may be
examinable even if the effective date is in
the future. The terms ‘issued’ or ‘passed’
relate to when regulation or legislation has
been formally approved.
The term ‘effective’ relates to when

regulation or legislation must be applied to
entity transactions and business practices.
The study guide offers more detailed

guidance on the depth and level at which the
examinable documents will be examined.
The study guide should therefore be read in
conjunction with the examinable documents
list.

6. Relational diagram linking Financial Accounting

(FA/FFA) with other exams
The Foundations in Accountancy suite of qualifications is designed so that a student can

progress through three discrete levels; RQF Level 2, 3, and 4. Students are recommended
to enter Foundations in Accountancy at the level which is most appropriate to their needs
and to take examinations in order, but this is not a mandatory requirement.
7. Approach to examining the syllabus
The syllabus is assessed by a two-hour computer-based examination. Questions will assess

all parts of the syllabus and will test knowledge and some comprehension or application of
this knowledge. The examination will consist of two sections. Section A will contain 35 two-
mark objective test questions. Section B will contain 2 fifteen-mark multi-task questions.
These will test consolidations and accounts preparation. The consolidation question could
include a small amount of interpretation and the accounts preparation question could be set
in the context of a sole trader or a limited company.
8. Overall aim of the syllabus
To develop knowledge and understanding of the underlying principles and concepts relating
to financial accounting and technical proficiency in the use of double-entry accounting
techniques including the preparation of basic financial statements.

9. Introduction to the syllabus
The syllabus for Financial Accounting (FA)/FFA introduces the candidate to the
fundamentals of the regulatory framework relating to accounts preparation and to the
qualitative characteristics of useful financial information. The syllabus then covers the
principles of accounts preparation, including an in-depth look at recording, processing, and
reporting business transactions and events. The syllabus also covers reconciliations,
preparation of a trial balance, error correction and suspense accounts, all of which will lead
to the preparation of financial statements for incorporated and unincorporated entities. The
syllabus then moves in two directions, firstly requiring the preparation of basic consolidated
financial statements from the individual financial statements of entities within a group; and
secondly requiring candidates to be able to conduct a basic interpretation of financial
statements.
10. Main capabilities
On successful completion of this exam, candidates should be able to:
A Explain the context and purpose of financial reporting

B Define the accounting principles, concepts and qualitative characteristics of useful
financial information
C Demonstrate the use of double-entry and accounting systems
D Record transactions and events
E Perform reconciliations
F Prepare a trial balance
G Prepare financial statements
H Prepare basic consolidated financial statements
I Interpret financial statements
Relational diagram of main capabilities:

7. Accruals expenses (accruals), prepaid

expenses (prepayments), accrued
11. The syllabus income, and deferred income
A The context and purpose of financial 8. Receivables and payables

reporting
9. Provisions and contingencies
1. The scope and purpose of financial
statements for external reporting 10. Capital structure and finance costs
2. Stakeholders’ needs E Reconciliations
3. The main elements of financial reports 1. Bank reconciliations
4. The regulatory framework 2. Trade payables account reconciliations
5. Duties and responsibilities of those F Preparing a trial balance

charged with governance
1. Trial balance
B Accounting principles, concepts and
qualitative characteristics 2. Correction of errors
1. Key principles and concepts of 3. Suspense accounts

accounting
G Preparing financial statements
2. Qualitative characteristics of useful
financial information 1. Statement of financial position
C The use of double-entry and 2. Statement of profit or loss and other

accounting systems comprehensive income
1. Double-entry book-keeping principles 3. Disclosure notes

including the maintenance of accounting
records 4. Events after the reporting period
2. General ledger accounts and journal 5. Statement of cash flows (excluding

entries partnerships
D Recording transactions and events 6. Incomplete records
1. Sales and purchases H Preparing basic consolidated

financial statements
2. Cash
1. Subsidiaries
3. Inventories
2. Associates
4. Tangible non-current assets
I Interpretation of financial statements
5. Depreciation
1. Importance and purpose of analysis of
6. Intangible non-current assets and financial statements
amortisation
2. Ratios
3. Analysis of financial statements

12. Detailed study guide i) IFRS Foundation®

ii) International Accounting Standards
Board (IASB®)
A The context and purpose of iii) IFRS® Advisory Council
financial reporting iv) IFRS Interpretations Committee
v) International Sustainability
1. The context and purpose of financial Standards Board (ISSB™)
statements for external reporting
b) Explain the role of IFRS Accounting
a) Define financial reporting – recording, Standards in preparing financial
analysing and summarising financial statements.[K]
data.[K]
5. Duties and responsibilities of those
b) Identify and define types of business charged with governance
entity – sole trader, partnership, limited
liability company.[K] a) Explain what is meant by governance
specifically in the context of the
c) Explain the legal differences between a preparation of financial statements.[K]
sole trader, partnership and a limited
liability company.[K] b) Describe the duties and responsibilities
of directors in the preparation of the
d) Identify the advantages and financial statements.[K]
disadvantages of operating as a sole
trader, partnership or limited liability
company.[K] B Accounting principles,
concepts and qualitative
e) Define the nature, principles and scope characteristics
of financial reporting.[K]
1. Key principles and concepts of
2. Stakeholders’ needs accounting
a) Identify the users of financial statements a) Define and apply key principles and
and state and differentiate between their concepts of accounting:[K]
information needs.[K] i) Going concern
ii) Accrual basis
3. The main elements of financial iii) Materiality and aggregation
statements iv) Offsetting
v) Consistency
a) Describe the purpose of each of the vi) Prudence
financial statements:[K] vii) Duality (dual aspect)
i) Statement of financial position viii) Business entity
ii) Statement of profit or loss and other ix) Historical cost and current value
comprehensive income x) Substance over form
iii) Statement of changes in equity
iv) Statement of cash flows 2. Qualitative characteristics of useful
financial information
b) Identify and define assets, liabilities,
equity, income and expenses.[K] a) Define and apply the qualitative
characteristics of useful financial
4. The regulatory framework information:[K]
i) Relevance
a) Explain the purpose of the regulatory ii) Faithful representation
system, including the roles of the:[K] iii) Comparability

iv) Verifiability a) Describe the main types of general

v) Timeliness ledger accounts, including their nature
vi) Understandability and function.[K]
b) Describe how financial data is initially

C The use of double-entry and recorded in the accounting system.[K]
accounting systems
c) Explain the use of journal entries and
1. Double-entry bookkeeping principles how journal entries are posted into
including the maintenance of general ledger accounts.[S]
accounting records
d) Identify correct journal entries from
a) Identify and explain the function of the given narrative.[S]
main data sources in an accounting
system.[K] e) Illustrate how to balance and close the
general ledger accounts at the year
b) Summarise the contents and purpose of end.[S]
different types of business
documentation, including: [K]
i) Quotation D Recording transactions and
ii) Sales order events
iii) Purchase order
iv) Goods received note 1. Sales and purchases
v) Goods despatched note
vi) Sales invoice a) Record sale and purchase transactions
vii) Supplier (purchase) invoice in the general ledger accounts.[S]
viii) Supplier statement
ix) Credit note b) Record sales returns and purchase
x) Debit note returns in the general ledger accounts.[S]
xi) Remittance advice
xii) Receipt c) Describe the principles of the operation
of a sales tax.[K]
c) Explain and apply the accounting
equation.[S] d) Calculate sales tax on transactions and
record the consequent accounting
d) Describe the key features of a entries.[S]
computerised accounting system,
including the use of external servers to e) Account for discounts received.[S]
store data (the cloud).[K]
f) Account for the following discounts
e) Describe how an accounting system allowed to customers in accordance with
contributes to providing useful IFRS 15 Revenue from Contracts with
accounting information and complies Customers:[S]
with organisational policies and (i) trade discounts
deadlines.[K] (ii) settlement discounts.
f) Identify the main types of business 2. Cash

transactions e.g. sales, purchases,
payments, receipts.[K] a) Record cash transactions in the bank
general ledger account.[S]
2. General ledger accounts and journal
entries b) Describe the need for a record of petty
cash transactions.[K]

3. Inventories g) Record the revaluation of a tangible

non-current asset in the general ledger
a) Describe the need for adjustments to accounts and illustrate how it is
inventories in preparing financial presented in the statement of profit or
statements.[K] loss and other comprehensive income
and in the statement of financial
b) Record opening and closing position.[S]
inventories.[S]
h) Calculate the gain or loss on disposal of
c) Apply the requirements of IAS 2 a revalued tangible non-current asset.[S]
Inventories for valuing inventories.[S]
i) Illustrate how tangible non-current asset
d) Identify which costs should be included balances and movements are disclosed
in valuing inventories.[S] in financial statements.[S]
e) Explain the use of continuous and j) Explain the purpose and function of a
period end inventory records.[K] non-current asset register.[K]
f) Calculate the value of closing 5. Depreciation

inventories using FIFO (first in, first out)
and AVCO (average cost) – both a) Explain the purpose of depreciation.[K]
periodic weighted average and
continuous weighted average.[S] b) Calculate the charge for depreciation
using straight line and diminishing
g) Identify the impact of inventory valuation (reducing) balance methods.[S]
methods on profit and on assets.[S]
c) Identify the circumstances where
4. Tangible non-current assets different methods of depreciation would
be appropriate.[K]
a) Define non-current assets.[K]
d) Illustrate how the depreciation expense
b) Compare the difference between current and accumulated depreciation are
and non-current assets.[K] recorded in the general ledger
accounts.[S]
c) Explain the difference between asset
and expense items.[K] e) Calculate and update the general ledger
accounts to record the depreciation on a
d) Classify expenditure as asset revalued tangible non-current asset,
expenditure or expenses charged to including the transfer of excess
profit or loss.[S] depreciation between the revaluation
surplus and retained earnings.[S]
e) Record the acquisition and disposal of
tangible non-current assets in the f) Calculate the adjustments to
general ledger accounts in accordance depreciation necessary if changes are
with IAS 16 Property, Plant and made in the estimated useful life and/or
Equipment.[S] residual value of a tangible non-current
asset.[S]
f) Calculate and record gains or losses on
disposal of tangible non-current assets g) Record depreciation in the statement of
in the statement of profit or loss, profit or loss and statement of financial
including part exchange transactions.[S] position.[S]

6. Intangible non-current assets and

amortisation f) Report accruals, prepayments, accrued
income and deferred income in the
a) Compare the difference between financial statements.[S]
tangible and intangible non-current
assets.[K] 8. Receivables and payables
b) Identify types of intangible assets.[K] a) Identify and explain examples of

receivables and payables.[K]
c) Identify the definition and treatment of
“research” and “development” in b) Identify the benefits and costs of offering
accordance with IAS 38 Intangible credit facilities to customers.[K]
Assets.[K]
c) Describe the purpose of an aged
d) Calculate and account for amounts to be receivables analysis.[K]
capitalised as development expenditure
or to be recognised as an expense from d) Describe the purpose of customer credit
given information.[S] limits.[K]
e) Explain the purpose of amortisation.[K] e) Prepare the journal entries to write off
an irrecoverable debt.[S]
f) Calculate and account for
amortisation.[S] f) Record an irrecoverable debt
recovered.[S]
7. Accrued expenses (accruals),
prepaid expenses (prepayments), g) Demonstrate the impact of irrecoverable
accrued income, and deferred debts on the statement of profit or loss
income and on the statement of financial
position.[S]
a) Apply the accrual basis of accounting to
accruals, prepayments, accrued income h) Prepare the journal entries to create and
and deferred income.[S] adjust an allowance for receivables.[S]
b) Calculate the adjustments needed for i) Illustrate how to include movements in

accruals, prepayments, accrued income the allowance for receivables in the
and deferred income when preparing statement of profit or loss and how the
financial statements.[S] closing balance of the allowance should
appear in the statement of financial
c) Illustrate the process of adjusting for position.[S]
accruals, prepayments, accrued income
and deferred income when preparing j) Account for contras between trade
financial statements.[S] receivables and trade payables.[S]
d) Prepare the journal entries and update k) Prepare, reconcile and explain the
the general ledger accounts for the purpose of supplier statements.[S]
creation and reversal of accruals,
prepayments, accrued income and 9. Provisions and contingencies
deferred income.[S]
a) Define “provision”, “contingent liability”
e) Identify the impact of accruals, and “contingent asset” in accordance
prepayments, accrued income and with IAS 37 Provisions, Contingent
deferred income on profit and net Liabilities and Contingent Assets.[K]
assets.[S]

b) Distinguish between and classify items j) Calculate and record finance costs in
as provisions, contingent liabilities or the general ledger accounts and the
contingent assets.[S] financial statements.[S]
c) Illustrate the different methods of k) Identify the components of the

accounting for provisions, contingent statement of changes in equity.[K]
liabilities and contingent assets.[K]
d) Calculate provisions and changes in E Reconciliations

provisions.[S]
1. Bank reconciliations
e) Account for the movement in
provisions.[S] a) Explain the purpose of bank
reconciliations.[K]
f) Report provisions in the financial
statements.[S] b) Identify the main reasons for differences
between the bank general ledger
10. Capital structure and finance costs account and the bank statement or
internet banking records.[K]
a) Describe the capital structure of a
limited liability company including:[K] c) Identify and correct errors and/or
i) Ordinary shares omissions in the bank general ledger
ii) Preference shares (redeemable and account.[S]
irredeemable)
iii) Borrowings d) Prepare the reconciliation of the bank
general ledger account to the bank
b) Describe the nature of equity, including statement or internet banking records.[S]
retained earnings and other components
of equity.[K] e) Derive bank statement and bank
general ledger account balances from
c) Identify and record the other given information.[S]
components of equity which may appear
in the statement of financial position.[S] f) Identify the bank balance to be reported
in the financial statements.[S]
d) Record movements in the share capital
and share premium accounts.[S] 2. Trade payables account reconciliations
e) Define a bonus (capitalisation) issue a) Explain the purpose of the trade

and its advantages and payables general ledger account and
disadvantages.[K] how it relates to the double-entry
system.[K]
f) Define a rights issue and its advantages
and disadvantages.[K] b) Explain the purpose of reconciling the
g) Calculate and record a bonus trade payables general ledger account
(capitalisation) issue in the statement of to external documents.[K]
financial position.[S]
h) Calculate and record a rights issue in c) Prepare a reconciliation of the trade
the statement of financial position.[S] payables general ledger account to
supplier statements.[S]
i) Calculate and record dividends in the
general ledger accounts and the d) Identify and correct errors which would
financial statements.[S] be highlighted by performing a

reconciliation of the trade payables

general ledger account.[K] G Preparing financial
statements
e) Identify the trade payables balance to
be reported in the financial 1. Statement of financial position
statements.[S]
a) Explain how the accounting equation,
IFRS Accounting Standards and the
F Preparing a trial balance business entity concept underlie the
statement of financial position.[K]
1. Trial balance
b) Prepare a statement of financial position
a) Describe the purpose of a trial or extracts as applicable.[S]
balance.[K]
2. Statement of profit or loss and other
b) Extract general ledger balances into a comprehensive income
trial balance.[S]
a) Calculate revenue, cost of sales, gross
c) Prepare extracts of an opening trial profit, profit from operations, profit
balance.[S] before taxation, profit for the year, and
total comprehensive income from given
d) Explain the limitations of a trial information.[S]
balance.[K]
b) Prepare a statement of profit or loss and
2. Correction of errors other comprehensive income or extracts
as applicable.[S]
a) Identify the types of error which may
occur in accounting systems.[K] c) Record income tax in the statement of
profit or loss, including the under and
b) Identify errors which would be overprovision of tax in the prior year.[S]
highlighted by the extraction of a trial
balance and those which would not.[K] d) Identify items requiring separate
disclosure on the face of the statement
c) Prepare journal entries to correct of profit or loss.[K]
errors.[S]
e) Explain the interrelationship between
d) Calculate the impact of errors on the the statement of financial position and
statement of profit or loss and other the statement of profit or loss and other
comprehensive income and the comprehensive income.[K]
statement of financial position.[S]
3. Disclosure notes
3. Suspense accounts
a) Explain the purpose of notes to the
a) Explain the purpose of a suspense financial statements (disclosure
account.[K] notes).[K]
b) Draft the following disclosure notes:[S]
b) Identify errors leading to the creation of i) Non-current assets, including
a suspense account.[K] tangible and intangible assets
ii) Provisions
c) Record entries in a suspense account.[S] iii) Events after the reporting period
iv) Inventories
d) Prepare journal entries to clear a
suspense account.[S]

4. Events after the reporting period iii) Use of cash and/or bank summaries
iv) Use of profit percentages to calculate
a) Define an event after the reporting missing figures.
period in accordance with IAS 10 Events
after the Reporting Period.[K]
H Preparing basic consolidated
b) Classify events as adjusting or non- financial statements
adjusting.[S]
1. Subsidiaries
c) Distinguish between how adjusting and
non-adjusting events are reported in the a) Define and describe the following terms
financial statements.[K] in the context of group accounting:[K]
i) Parent
5 Statement of cash flows (excluding ii) Subsidiary
partnerships) iii) Control
iv) Consolidated (group) financial
a) Differentiate between profit and cash statements
flow.[K] v) Non-controlling interest
vi) Trade (simple) investment
b) Describe the need for management to
control cash flow.[K] b) Identify subsidiaries within a group
structure.[K]
c) Explain the benefits and drawbacks to
users of the financial statements of a c) Describe the components of and
statement of cash flows.[K] prepare a consolidated statement of
financial position or extracts thereof
d) Classify the effect of transactions on including:[S]
cash flows.[S] i) Fair value adjustments at acquisition
on property, plant and equipment
e) Calculate the figures needed for the (excluding depreciation adjustments)
statement of cash flows in accordance ii) Fair value of consideration
with IAS 7 Statement of Cash Flows, transferred from cash and shares
including:[S] (excluding deferred and contingent
i) Cash flows from operating activities consideration)
(direct and indirect methods) iii) Elimination of intra-group trading
ii) Cash flows from investing activities balances (excluding cash and goods
iii) Cash flows from financing activities in transit)
iv) Removal of unrealised profit arising
f) Prepare a statement of cash flows or on intra-group trading
extracts as applicable.[S] v) Acquisition of subsidiaries part way
through the financial year
g) Identify the treatment of given
transactions in a statement of cash d) Calculate goodwill (excluding
flows.[K] impairment of goodwill) where non-
controlling interest is valued at its fair
value at the acquisition date as
6. Incomplete records follows:[S]
a) Apply techniques used in incomplete Fair value of consideration X

record situations:[S] Fair value of non-controlling interest X
i) Use of accounting equation Less fair value of net assets at
ii) Use of general ledger accounts to acquisition (X)
calculate missing figures Goodwill at acquisition X

b) Explain the interrelationships between

e) Describe the components of and ratios.[K]
prepare a consolidated statement of
profit or loss or extracts thereof 3. Analysis of financial statements
including:[S]
i) Elimination of intra-group trading a) Calculate and interpret the relationship
balances (excluding cash and goods between the elements of the financial
in transit) statements with regard to profitability,
ii) Removal of unrealised profit arising liquidity, efficient use of resources and
on intra-group trading financial position.[S]
iii) Acquisition of subsidiaries part way
through the financial year b) Draw valid conclusions from the
information contained within the
2. Associates financial statements and present these
to the appropriate user of the financial
a) Define and identify an associate and statements.[S]
significant influence and identify the
situations where significant influence
exists.[K]
b) Describe the key features of a parent-

associate relationship and be able to
identify an associate within a group
structure.[K]
c) Describe the principle of the equity

method of accounting for associate
entities.[K]
I Interpretation of financial
statements
1. Importance and purpose of analysis
of financial statements
a) Describe how the interpretation and

analysis of financial statements is used
in a business environment.[K]
b) Explain the purpose of interpretation of

ratios.[K]
2. Ratios
a) Calculate key accounting ratios related

to:[S]
i) Profitability
ii) Liquidity
iii) Efficiency
iv) Position

13. Summary of changes to Financial Accounting (FA/FFA)
ACCA periodically reviews its qualification syllabuses so that they fully meet the needs of
stakeholders including employers, students, regulatory and advisory bodies and learning providers.
Due to the significant changes made to the 2023/24 study guide from the 2022/23 study guide, the
following detailed mapping guide has been prepared.
Detailed mapping for FA/FFA from September 2022/23 to September 2023/24
Key
The 2022/23 learning outcome has not been remapped for 2023/24, although
changes may have been made to the wording
The learning outcome is new for 2023/24
The 2022/23 learning outcome has been remapped for 2023/24 and changes
may or may not have been made to the wording
The 2022/23 learning outcome has been removed from the 2023/24 syllabus
2022/23 Learning 2023/24 Learning Summary of changes

Outcome Outcome
A A No changes
A1 A1 Changed 'scope' to 'context'
A1(a) A1(a) No changes
A1(b) A1(b) No changes
A1(c) A1(c) Changed 'Recognise' to 'Explain'
A1(d) A1(d) Moved 'limited liability company' to the end
A1(e) A1(e) Changed 'Understand' to 'Define
A2 A2 Deleted 'Users and stakeholders'
A3 A3 Changed 'reports' to 'statements'
A3(a) A3(a) Changed 'Understand and identify' to 'Describe'; listed
the financial statements
A3(b) A3(b) Changed 'Define and identify' to 'Identify and define';
changed 'revenue' to 'income'
A4 A4 No changes
A4(a) A4(a) Changed 'Understand the role' to 'Explain the purpose';
listed out the bodies into sub learning outcomes; added
'International Sustainability Standards Board (ISSB®)'
A4(b) A4(b) Changed 'Understand' to 'Explain'; added 'in preparing
financial statements'
A5 A5 No changes
A5(b) A5(b) Deleted 'and other parties covering'
B B Changed 'The qualitative characteristics of financial
information' to 'Accounting principles, concepts and
qualitative characteristics'

B1 B2 Remapped - split B1 into two separate learning

outcomes (B1 and B2 for 2023/24) with S22 B1
mapping to S23 B2; deleted 'The'
B1(a) B2(a) Remapped - changed 'Define, understand and apply
qualitative characteristics' to 'Define and apply the
qualitative characteristics of useful financial information'
B1(b) B1(a) Remapped - changed 'Define, understand and apply
accounting concepts' to 'Define and apply key principles
and concepts of accounting'; re-ordered existing sub
learning outcomes; changed 'Materiality' to 'Materiality
and aggregation'; changed 'Business entity concept' to
'Business entity'; changed 'Accruals' to 'Accrual basis';
added 'Offsetting'; remapped 'Duality (dual aspect)'
from S22 C1(c); added 'Historical cost and current
value'
NEW FOR 2023/24 B1 New for 2023/24
C C No changes
C1 C1 No changes
C1(a) C1(a) No changes
C1(b) C1(b) Changed 'Outline' to 'Summarise'; listed the examples
into separate sub learning outcomes; changed 'invoice
to 'Sales invoice' and 'Supplier (purchase) invoice';
changed 'statement' to 'supplier statement'
C1(c) B1(a)(vii) Remapped - now included as a sub learning outcome in
B1(a) in S23
C1(d) C1(c) Remapped – changed 'Understand' to 'Explain'
NEW FOR 2023/24 C1(d) New for 2023/24
C1(e) C1(e) Changed 'Understand' to 'Describe'; changed 'the' to
'an'
C1(f) C1(f) No changes
C2 C2 Changed 'Ledger accounts, books of prime entry and
journals' to 'General ledger accounts and journal
entries'
C2(a) REMOVED Removed
NEW FOR 2023/24 C2(a) New for 2023/24
NEW FOR 2023/24 C2(b) New for 2023/24
C2(b) C2(c) Remapped - changed 'Understand and illustrate the
uses of journals and the posting of journal entries into
ledger accounts' to 'Explain the use of journal entries
and how journal entries are posted into general ledger
accounts'
C2(c) C2(d) Remapped - no changes to wording
C2(d) C2(e) Remapped - changed 'a ledger account' to 'the general
ledger accounts at the year end'
D D No changes
D1 D1 No changes
D1(a) D1(a) Added 'the general'
D1(b) D1(b) Deleted 'Understand and'; added ' in the general ledger
accounts'
D1(c) D1(c) Changed 'Understand the general principles' to
'Describe the principles'

D1(d) D1(d) No changes

D1(e) D1(f) Remapped - added 'to customers in accordance with
IFRS 15 Revenue from Contracts with Customers: (i)
trade discounts (ii) settlement discounts'
D1(f) D1(e) Remapped - no changes to wording
D2 D2 No changes
D2(a) D2(a) Changed 'ledger accounts' to 'the bank general ledger
account'
D2(b) D2(b) Changed 'Understand' to 'Describe'
D3 D3 Changed 'Inventory' to 'Inventories'
D3(a) D3(a) Changed 'Recognise' to 'Describe'; changed 'inventory'
to 'inventories'
D3(b) D3(b) Changed 'Inventory' to 'Inventories'
D3(c) D3(c) Changed 'Identify the alternative methods of' to 'Apply
the requirements of IAS 2 Inventories for'
D3(d) D3(c) Remapped - combined as part of D3(c) for 2023/24
D3(e) D3(d) Remapped - changed 'Recognise' to 'Identify'
D3(f) D3(e) Remapped - changed 'Understand' to 'Explain'
D3(g) D3(f) Remapped - changed 'inventory' to 'inventories'
D3(h) REMOVED Removed
D3(i) D3(g) Remapped - no changes to wording
D4 D4 No changes
D4(a) D4(a) No changes
D4(b) D4(b) Changed 'Recognise' to 'Compare'
D4(c) D4(c) No changes
D4(e) D4(e) Changed 'Prepare ledger entries to record the
acquisition and disposal of non-current assets' to
'Record the acquisition and disposal of tangible non-
current assets in the general ledger accounts in
accordance with IAS 16 Property, Plant and Equipment'
D4(f) D4(f) Changed 'profits' to 'gains'; added 'tangible'
D4(g) D4(g) Added 'tangible'; added 'the general'; added 'and
illustrate how it is presented in'
D4(h) D4(h) Changed 'profit' to 'gain'; added 'tangible non-current'
D4(i) D4(i) Added 'tangible'
D4(j) D4(j) Changed ‘an asset’ to ‘a non-current asset’
D5 D5 No changes
D5(a) D5(a) Deleted 'Understand and'
D5(b) D5(b) Changed 'reducing' to 'diminishing (reducing)'
D5(c) D5(c) No changes
D5(d) D5(d) Added 'the'; added 'the general'
D5(e) D5(e) Added 'and update the general ledger accounts to
record the'; added 'tangible';
D5(f) D5(f) Added 'tangible'
D5(g) D5(g) No changes
D6 D6 No changes
D6(a) D6(a) Changed 'Recognise' to 'Compare'

D6(b) D6(b) No changes

D6(c) D6(c) Changed '"research costs" and "development costs" in
accordance with IFRS® Standards' to '"research" and
"development" in accordance with IAS 38 Intangible
Assets'
D6(d) D6(d) Added 'and account for'; changed 'expensed' to
'recognised as an expense'
D6(e) D6(e) No changes
D6(f) D6(f) Added 'the charge for'
D7 D7 Changed 'Accruals and prepayments' to 'Accrued
expenses (accruals), prepaid expenses (prepayments),
accrued income, and deferred income'
D7(a) D7(a) Changed 'Understand how the matching concept
applies to accruals and prepayments' to 'Apply the
accrual basis of accounting to accruals, prepayments,
accrued income and deferred income'
D7(b) D7(b) Deleted 'Identify and'; added 'accrued income and
deferred income'
D7(c) D7(c) Added 'accrued income and deferred income'
D7(d) D7(d) Changed 'ledger entries' to 'update the general ledger
accounts'; added 'and reversal'; changed 'an accrual or
prepayment' to 'accruals, prepayments, accrued income
and deferred income'
D7(e) D7(e) Deleted 'Understand and'; added 'of accruals,
prepayments, accrued income and deferred income;
deleted 'of accruals and prepayments'
NEW FOR 2023/24 D7(f) New for 2023/24
D8 D8 No changes
D8(a) D8(a) Changed 'Explain and identify' to 'Identify and explain'
D8(c) D8(c) Changed 'Understand' to 'Describe'
D8(d) D8(d) Changed 'Understand' to 'Describe; added 'customer'
D8(e) D8(e) Changed 'bookkeeping' to 'journal'
D8(f) D8(f) No changes
D8(g) D8(g) Changed 'Identify' to 'Demonstrate'
D8(h) D8(h) Changed 'bookkeeping' to 'journal'
D8(i) D8(i) No changes
D8(j) D8(j) Added 'trade'
D8(k) D8(k) Changed 'understand' to 'explain'
D8(l) REMOVED Removed
D9 D9 No changes
D9(a) D9(a) Changed ' Understand the definition of' to 'Define';
added 'in accordance with IAS 37 Provisions,
Contingent Liabilities and Contingent Assets'
D9(c) D9(c) Deleted 'Identify and'
D9(e) D9(e) No changes
D9(f) D9(f) Changed 'final accounts' to 'financial statements'

D10 D10 No changes

D10(a) D10(a) Changed 'Understand' to 'Describe'; Changed 'Loan
notes' to 'Borrowings'
D10(b) D10(d) Remapped - no changes to wording
D10(c) D10(c) Changed 'other reserves' to 'other components of
equity'; deleted 'company'
D10(d) D10(e) Remapped - no changes to wording
D10(e) D10(f) Remapped - no changes to wording
D10(f) D10(g) Remapped - changed 'Record and show the effects of'
to 'Calculate and record'
D10(g) D10(h) Remapped - changed 'Record and show the effects of'
to 'Calculate and record'
D10(h) D10(i) Remapped - added 'Calculate and'; added 'the general'
D10(i) D10(j) Remapped - added 'the general'
D10(j) D10(k) Remapped - no changes to wording
E F Remapped - no changes to wording
E1 F1 Remapped - no changes to wording
E1(a) F1(a) Remapped - changed 'Identify' to 'Describe'
E1(b) F1(b) Remapped - added 'general'
E1(c) F1(c) Remapped - no changes to wording
E1(d) F1(d) Remapped - changed 'Identify and understand' to
'Explain'
E2(a) F2(a) Remapped - changed 'bookkeeping' to 'accounting'
E2(b) F2(b) Remapped - added 'and those which would not'
E2(d) F2(d) Remapped - deleted 'and understand'
E3 REMOVED Removed
E3(a) REMOVED Removed
E3(b) REMOVED Removed
E3(c) REMOVED Removed
E3(d) REMOVED Removed
E3(e) REMOVED Removed
E3(f) REMOVED Removed
E4 E1 Remapped - no changes to wording
E4(a) E1(a) Remapped - changed 'Understand' to 'Explain'
E4(b) E1(b) Remapped - changed 'cash book' to 'bank general
ledger account'; added 'or internet banking records'
E4(c) E1(c) Remapped - changed 'Correct cash book errors and/or
omissions' to 'Identify and correct errors and/or
omissions in the bank general ledger account'
E4(d) E1(d) Remapped - changed 'Prepare bank reconciliation
statements' to 'Prepare the reconciliation of the bank
general ledger account to the bank statement or
internet banking records'
E4(e) E1(e) Remapped - changed 'cash book' to 'bank general
ledger account'

E4(f) E1(f) Remapped - changed 'final accounts' to 'financial

statements'
NEW FOR 2023/24 E2 New for 2023/24
NEW FOR 2023/24 E2(a) New for 2023/24
NEW FOR 2023/24 E2(b) New for 2023/24
NEW FOR 2023/24 E2(c) New for 2023/24
NEW FOR 2023/24 E2(d) New for 2023/24
NEW FOR 2023/24 E2(e) New for 2023/24
E5(a) F3(a) Remapped - changed 'Understand' to 'Explain'
E5(b) F3(b) Remapped - no changes to wording
E5(d) F3(d) Remapped - changed 'Make' to 'Prepare'
F G Remapped - deleted 'basic'
F1 G1 Remapped - changed 'Statements' to 'Statement'
F1(a) G1(a) Remapped - changed 'Recognise' to 'Explain'; changed
'accounting treatments (as stipulated within sections D,
E and examinable documents)' to 'IFRS Accounting
Standards'; added 'the'
F1(b) D10(b) Remapped - combined S22 F1(b) and S22 F1(e) into
S23 D10(b); changed 'Understand the nature of
reserves' to 'Describe the nature of equity, including
retained earnings and other components of equity'
F1(c) REMOVED Removed
F1(d) G1(b) Remapped - deleted 'from given information using
accounting treatments as stipulated within sections De,
E and examinable documents'
F1(e) D10(b) Remapped - incorporated into S23 D10(b)
F2 G2 Remapped - changed 'Statements' to 'Statement'
F2(a) G2(b) Remapped - deleted 'from given information using
accounting treatments as stipulated within sections De,
E and examinable documents'
F2(b) REMOVED Removed
F2(c) G2(a) Remapped - added 'profit from operations'; added 'profit
before taxation'
F2(d) REMOVED Removed
F2(e) G2(c) Remapped - deleted 'of a company'
F2(f) G2(e) Remapped - changed 'Understand' to 'Explain'
F2(g) G2(d) Remapped - no changes to wording
F3 G3 Remapped - no changes to wording
F3(a) G3(a) Remapped - changed 'disclosure notes' to 'notes to the
financial statements (disclosure notes)'
F3(b) G3(b) Remapped - changed 'inventory' to 'inventories'
F4(a) G4(a) Remapped - changed 'IFRS Standards' to 'IAS 10
Events after the Reporting Period'
F4(b) G4(b) Remapped - no changes to wording
F4(c) G4(c) Remapped - no changes to wording


F5(a) G5(a) Remapped - no changes to wording
F5(b) G5(b) Remapped - changed 'Understand' to 'Describe'
F5(c) G5(c) Remapped - changed 'Recognise' to 'Explain
F5(d) G5(d) Remapped - no changes to wording
F5(e) G5(e) Remapped - added 'in accordance with IAS 7
Statement of Cash flows'; added '(direct and indirect
methods)'
F5(f) G5(e)(i) Remapped - incorporated into S23 G5(e)(i)
F5(g) G5(f) Remapped - changed 'statements' to 'a statement'
F5(h) G5(g) Remapped - deleted 'company's'
F6(a) G6(a) Remapped - deleted 'Understand and'; added 'general'
G H Remapped - changed 'simple' to 'basic'
G1 H1 Remapped - no changes to wording
G1(a) H1(a) Remapped - changed 'or group' to '(group)'; changed '/
simple' to '(simple)'
G1(b) H1(b) Remapped - no changes to wording
G1(c) H1(c) Remapped - changed 'land and buildings' to 'property,
plant and equipment'
G1(d) H1(d) Remapped - changed 'using the full goodwill method
only' to 'where non-controlling interest is valued at its
fair value at the acquisition date'
G1(e) H1(e) Remapped - no changes to wording
G2 H2 Remapped - no changes to wording
G2(a) H2(a) Remapped - no changes to wording
G2(b) H2(b) Remapped - no changes to wording
G2(c) H2(c) Remapped - no changes to wording
H I Remapped - no changes to wording
H1 I1 Remapped - no changes to wording
H1(a) I1(a) Remapped - no changes to wording
H1(b) I1(b) Remapped - no changes to wording
H2(a) I2(a) Remapped - added 'related to'
H3(a) I3(a) Remapped - no changes to wording

Financial
Reporting (FR)
September 2023 to June 2024

examination session
Financial Reporting (FR)
Contents
1. Intellectual levels .................................. 2
2. Learning hours and education
recognition ............................................... 2
3. The structure of ACCA qualification ..... 3
4. Guide to ACCA examination structure
and delivery mode.................................... 4
5. Guide to ACCA examination
assessment.............................................. 6
Reporting with other exams...................... 7
7. Approach to examining the syllabus .. 7
8. Introduction to the syllabus ............... 8
9. Main capabilities ............................... 9
10. The syllabus ..................................... 10
11. Detailed study guide......................... 11
Reporting (FR) ....................................... 17
1 © ACCA 2023-2024 All rights reserved.

1. Intellectual levels 2. Learning hours and

education recognition
The syllabus is designed to progressively
broaden and deepen the knowledge, skills
The ACCA qualification does not prescribe
and professional values demonstrated by
or recommend any particular number of
the student on their way through the
learning hours for examinations because
qualification.
study and learning patterns and styles vary
greatly between people and organisations.
The specific capabilities within the detailed
This also recognises the wide diversity of
syllabuses and study guides are assessed
personal, professional and educational
at one of three intellectual or cognitive
circumstances in which ACCA students
levels:
find themselves.
Level 1: Knowledge and
As a member of the International
comprehension
Federation of Accountants, ACCA seeks to
Level 2: Application and analysis
enhance the education recognition of its
Level 3: Synthesis and evaluation
qualification on both national and
international education frameworks, and
Very broadly, these intellectual levels
with educational authorities and partners
relate to the three cognitive levels at which
globally. In doing so, ACCA aims to ensure
the Applied Knowledge, the Applied Skills
that its qualification is recognised and
and the Strategic Professional exams are
valued by governments, regulatory
assessed.
authorities and employers across all
sectors. To this end, the ACCA
Each subject area in the detailed study
qualification is currently recognised on the
guide included in this document is given a
education frameworks in several countries.
1, 2, or 3 superscript, denoting intellectual
Please refer to your national education
level, marked at the end of each relevant
framework regulator for further information.
learning outcome. This gives an indication
of the intellectual depth at which an area
Each syllabus is organised into main
could be assessed within the examination.
subject area headings which are further
However, while level 1 broadly equates
broken down to provide greater detail on
with Applied Knowledge, level 2 equates
each area.
to Applied Skills and level 3 to Strategic
Professional, some lower-level skills can
continue to be assessed as the student
progresses through each level. This
reflects that at each stage of study there
will be a requirement to broaden, as well
as deepen capabilities. It is also possible
that occasionally some higher-level
capabilities may be assessed at lower
levels.

3. The structure of ACCA qualification

4. Guide to ACCA Strategic Professional

Essentials:
examination structure and Strategic Business Leader is ACCA’s case
delivery mode study examination at Strategic Professional
and from September 2023 is examined as a
closed book exam of 3 hours and 15
The pass mark for all ACCA Qualification minutes, including reading, planning and
examinations is 50%. reflection time which can be used flexibly
within the examination.
The structure and delivery mode of
examinations varies. Pre-seen information for the Strategic
Business Leader exam will be released two
Applied Knowledge weeks before the exam sitting. The pre-seen
The Applied Knowledge examinations information contains background and
contain 100% compulsory questions to contextual details in order for students to
encourage students to study across the familiarise themselves with the fictitious
breadth of each syllabus. These are organisation that they will be examined on
assessed by a two-hour computer-based and the industry in which it operates.
examination.
The Strategic Business Leader exam will
Applied Skills contain new information in the form of
The Corporate and Business Law exam is a exhibits and students are required to
two-hour computer-based objective test complete several tasks. All questions are
examination for English and Global. compulsory and each examination will
contain a total of 80 technical marks and 20
For the format and structure of the professional skills marks.
Corporate and Business Law or Taxation
variant exams, refer to the ‘Approach to As this is a closed book exam, the pre-seen
examining the syllabus’ section of the information is also available within the
relevant syllabus and study guide. examination.
The other Applied Skills examinations Strategic Business Reporting is a three-

(PM, TX-UK, FR, AA, and FM) contain a mix hour 15 minutes exam. It contains two
of objective and longer type questions with a sections and all questions are compulsory.
duration of three hours for 100 marks. These This exam contains four professional marks.
are assessed by a three-hour computer-
based exam. Prior to the start of each exam Options:
there will be time allocated for students to be The Strategic Professional Options are all
informed of the exam instructions. three hours and 15 minutes computer-based
exams. All contain two sections and all
The longer (constructed response) question questions are compulsory.
types used in the Applied Skills exams
(excluding Corporate and Business Law) All option exams contain a total of 80
require students to effectively mimic what technical marks and 20 professional skills
they do in the workplace. Students will need marks.
to use a range of digital skills and
demonstrate their ability to use The question types used at Strategic
spreadsheets and word processing tools in Professional require students to effectively
producing their answers, just as they would mimic what they would do in the workplace.
use these tools in the workplace. These
assessment methods allow ACCA to focus These exams offer ACCA the opportunity to
on testing students’ technical and application focus on the application of knowledge to
skills, rather than, for example, their ability to scenarios, using a range of tools including
perform simple calculations. word processor, spreadsheets and
presentation slides - not only enabling

students to demonstrate their technical and

professional skills but also their use of the
technology available to today’s accountants.
Time management
ACCA encourages students to take time to
read questions carefully and to plan answers
but once the exam time has started, there
are no additional restrictions as to when
students may start producing their answer.
Students should ensure that all the

information and exam requirements are
properly read and understood.

5. Guide to ACCA
examination assessment
ACCA reserves the right to examine any

learning outcome contained within the study
guide. This includes knowledge, techniques,
principles, theories, and concepts as
specified. For the financial accounting, audit
and assurance, law, and tax exams except
where indicated otherwise, ACCA will
publish examinable documents once a year
to indicate exactly what regulations and
legislation could potentially be assessed
within identified examination sessions.
For most examinations (not tax), regulations

issued or legislation passed on or before 31
August annually, will be examinable from 1
September of the following year to 31
August of the year after that. Please refer to
the examinable documents for the exam
(where relevant) for further information.
Regulations issued or legislation passed in

accordance with the above dates will not be
examinable if the effective date is in the
future, unless explicitly stated otherwise in
this syllabus and study guide or examinable
documents.
The terms ‘issued’ or ‘passed’ relate to when

regulation or legislation has been formally
approved.


list.

6. Relational diagram linking Financial Reporting with

other exams
This diagram shows links between this exam and other exams preceding or following it.
Some exams are directly underpinned by other exams such as Strategic Business Reporting
by Financial Reporting. This diagram indicates where students are expected to have
underpinning knowledge and where it would be useful to review previous learning before
undertaking study.
The syllabus is assessed by a three-hour computer-based examination.
All questions are compulsory. The exam will contain both computational and discursive
elements.
Some questions will adopt a scenario/case study approach.
Section A of the computer-based exam comprises 15 objective test questions of 2 marks

each.
Section B of the computer-based exam comprises three questions each containing five
objective test questions of 2 marks each.
Section C of the exam comprises two 20 mark constructed response questions.
The 20-mark questions will examine the interpretation and preparation of financial
statements for either a single entity or a group. The section A questions and the other
questions in section B can cover any areas of the syllabus.

An individual question may often involve elements that relate to different subject areas of the
syllabus. For example the preparation of an entity’s financial statements could include
matters relating to several IFRS® Accounting Standards.
Questions may ask candidates to comment on the appropriateness or acceptability of

management’s opinion or chosen accounting treatment. An understanding of accounting
principles and concepts and how these are applied to practical examples will be tested.
Questions on topic areas that are also included in Financial Accounting (FA) will be
examined at an appropriately greater depth in this paper.
Candidates will be expected to have an appreciation of the need for specified IFRS
Accounting Standards and why they have been issued. For detailed or complex standards,
candidates need to be aware of their principles and key elements.
The aim of the syllabus is to develop knowledge and skills in understanding and applying
IFRS Accounting Standards and the theoretical framework in the preparation of financial
statements of entities, including groups and how to analyse and interpret those financial
statements.
The financial reporting syllabus assumes knowledge acquired in Financial Accounting (FA),
and develops and applies this further and in greater depth.
The syllabus begins with the Conceptual Framework for Financial Reporting with reference
to the qualitative characteristics of useful information and the fundamental bases of
accounting introduced in the Financial Accounting (FA) syllabus within the Knowledge
module. It then moves into a detailed examination of the regulatory framework of accounting
and how this informs the standard setting process.
The main areas of the syllabus cover the reporting of financial information for single
companies and for groups in accordance with generally accepted accounting principles and
relevant IFRS Accounting Standards.
The syllabus also covers the analysis and interpretation of information from financial
statements, including both financial and non-financial information.
Finally the syllabus contains outcomes relating to the demonstration of appropriate digital
and employability skills in preparing for and taking the FR examination. This includes being
able to interact with different question item types, manage information presented in digital
format and being able to use the relevant functionality and technology to prepare and
present response options in a professional manner. These skills are specifically developed
by practicing and preparing for the FR exam, using the learning support content for
computer-based exams available via the practice platform and the ACCA website and will
need to be demonstrated during the live exam.

A Discuss and apply conceptual and regulatory frameworks for financial reporting
B Account for transactions in accordance with IFRS Accounting Standards
C Analyse and interpret financial statements.
D Prepare and present financial statements for single entities and business combinations
in accordance with IFRS Accounting Standards
E Demonstrate employability and technology skills
This diagram illustrates the flows and links between the main capabilities of the syllabus and
should be used as an aid to planning teaching and learning in a structured way.

10. The syllabus 3. Limitations of interpretation techniques
4. Not-for-profit, and public sector entities

A The conceptual and regulatory
framework for financial reporting D Preparation of financial statements
1. The need for a conceptual framework 1. Preparation of single entity financial

and the characteristics of useful statements
information
2. Preparation of consolidated financial
2. Recognition and measurement statements for a simple group
3. Regulatory framework E Employability and technology skills
4. The concepts and principles of groups 1. Use computer technology to efficiently

and consolidated financial statements access and manipulate relevant
information.
B Accounting for transactions in
financial statements 2. Work on relevant response options,
using available functions and
1. Tangible non-current assets technology, as would be required in the
workplace.
2. Intangible assets
3. Navigate windows and computer screens
3. Impairment of assets to create and amend responses to exam
requirements, using the appropriate
4. Inventories and agriculture tools.
5. Financial instruments 4. Present data and information effectively,

using the appropriate tools.
6. Leasing
7. Provisions and events after the reporting

period
8. Taxation
9. Reporting financial performance
10. Revenue
11. Government grants
12. Foreign currency transactions
C Analysing and interpreting the

financial statements of single entities
and groups
1. Limitations of financial statements
2. Calculation and interpretation of

accounting ratios and trends to address
users’ and stakeholders’ needs

11. Detailed study guide iii) value in use/fulfilment value

iv) fair value
A The conceptual and d) Discuss the advantages and

disadvantages of historical cost
regulatory framework for accounting.[2]
financial reporting
e) Discuss whether the use of current value
1. The need for a conceptual framework accounting fully addresses the issues
and the characteristics of useful related to historical cost accounting.[2]
information
3. Regulatory framework
a) Describe what is meant by a conceptual
framework for financial reporting.[2] a) Explain why a regulatory framework is
needed including the advantages and
b) Discuss whether a conceptual disadvantages of IFRS Accounting
framework is necessary and what an Standards over a national regulatory
alternative system might be.[2] framework.[2]
c) Discuss what is meant by relevance and b) Explain why IFRS Accounting Standards
faithful representation and describe the on their own are not a complete
qualities that enhance these regulatory framework.[2]
characteristics.[2]
c) Distinguish between a principles based
d) Discuss whether faithful representation and a rules based framework and
constitutes more than compliance with discuss whether they can be
IFRS® Accounting Standards.[1] complementary.[1]
e) Discuss what is meant by d) Describe the standard setting process of

understandability and verifiability in the International Accounting Standards
relation to the provision of financial Board (IASB®) including revisions to and
information.[2] interpretations of IFRS Accounting
Standards.[2]
f) Discuss the importance of comparability
and timeliness to users of financial e) Explain the relationship of national
statements.[2] standard setters to the IASB in respect
of the standard setting process.[2]
g) Discuss the principle of comparability in
accounting for changes in accounting f) Explain the purpose and role of the
policies.[2] International Sustainability Standards
Board (ISSB™).[2]
2. Recognition and measurement
4. The concepts and principles of
a) Define what is meant by ‘recognition’ in groups and consolidated financial
financial statements and discuss the statements
recognition criteria.[2]
a) Describe the concept of a group as a
b) Apply the recognition criteria to: [2] single economic unit.[2]
i) assets and liabilities.
ii) income and expenses. b) Explain and apply the definition of a
subsidiary within relevant IFRS
c) Explain and compute amounts using the Accounting Standards.[2]
following measures: [2]
i) historical cost c) Using IFRS Accounting Standards and
ii) current cost other regulation, identify and outline the

circumstances in which a group is e) Compute depreciation based on the cost

required to prepare consolidated and revaluation models and on assets
financial statements. [2] that have two or more significant parts.[2]
d) Describe the circumstances when a f) Discuss why the treatment of investment

group may claim exemption from the properties should differ from other
preparation of consolidated financial properties.[2]
statements.[1]
g) Apply the requirements of relevant IFRS
Accounting Standards to an investment
e) Explain the need for using coterminous property.[2]
year ends and uniform accounting
polices when preparing consolidated 2. Intangible non-current assets
financial statements.[2]
a) Discuss the nature and accounting
f) Explain why it is necessary to eliminate treatment of internally generated and
intra group transactions. [2] purchased intangible assets.[2]
g) Explain the objective of consolidated b) Distinguish between goodwill and other

financial statements. [2] intangible assets.[2]
h) Explain why it is necessary to use fair c) Describe the criteria for the initial
values for the consideration for an recognition and measurement of
investment in a subsidiary together with intangible assets.[2]
the fair values of a subsidiary’s
identifiable assets and liabilities when d) Describe the subsequent accounting
preparing consolidated financial treatment of intangible assets.[2]
statements. [2]
i) Define an associate and explain the e) Describe and apply the requirements of
principles and reasoning for the use of relevant IFRS Accounting Standards to
the equity method of accounting.[2] research and development
expenditure.[2]
B Accounting for transactions 3. Impairment of assets
in financial statements
a) Define, calculate and account for an
1. Tangible non-current assets impairment loss, including the principle
of impairment tests in relation to
a) Define and compute the initial goodwill.[2]
measurement of a non-current asset
(including borrowing costs and an asset b) Account for the reversal of an
that has been self-constructed).[2] impairment loss on an individual asset.[2]
b) Identify subsequent expenditure that c) Identify the circumstances that may

may be capitalised, distinguishing indicate impairments to assets.[2]
between asset and expense items.[2]
d) Describe what is meant by a cash
c) Discuss the requirements of relevant generating unit.[2]
IFRS Accounting Standards in relation to
the revaluation of non-current assets.[2] e) State the basis on which impairment
losses should be allocated, and allocate
d) Account for revaluation and disposal an impairment loss to the assets of a
gains and losses for non-current cash generating unit.[2]
assets.[2]

4. Inventories and agriculture c) Account for sale and leaseback

transactions where sales proceeds are
a) Describe and apply the principles of equal to fair value.[2]
inventory valuation.[2]
7. Provisions and events after the
b) Apply the requirements of relevant IFRS reporting period
Accounting Standards for biological
assets and agricultural produce.[2] a) Explain why an accounting standard on
provisions is necessary.[2]
5 Financial instruments
b) Distinguish between legal and
a) Explain the need for an accounting constructive obligations.[2]
standard on financial instruments.[1]
c) State when provisions may and may not
b) Define financial instruments in terms of be made and demonstrate how they
financial assets and financial liabilities.[1] should be accounted for.[2]
c) Explain and account for the factoring of d) Explain how provisions should be
receivables.[2] measured.[1]
d) Indicate for the following categories of e) Define contingent assets and liabilities
financial instruments how they should be and describe their accounting treatment
measured and how any gains and losses and required disclosures.[2]
from subsequent measurement should
be treated in the financial statements: [2] f) Identify and account for:[2]
i) amortised cost i) warranties/guarantees
ii) fair value through other ii) onerous contracts
comprehensive income iii) environmental, decommissioning and
(including where an irrevocable similar provisions
election has been made for equity iv) restructuring
instruments that are not held for
trading) g) Events after the reporting period:[2]
iii) fair value through profit or loss i) distinguish between and account
for adjusting and non- adjusting
e) Distinguish between debt and equity.[2] events after the reporting period
ii) identify items requiring separate
f) Apply the requirements of relevant IFRS disclosure, including their
Accounting Standards to the issue and accounting treatment and
finance costs of: [2] required disclosures
i) equity
ii) redeemable preference shares 8. Taxation
and debt instruments with no
conversion rights (principle of a) Account for current taxation in
amortised cost) accordance with relevant IFRS
iii) convertible debt Accounting Standards.[2]
6. Leasing b) Explain the effect of taxable and

deductible temporary differences on
a) Account for right-of-use assets and lease accounting and taxable profits.[2]
liabilities in the records of the lessee.[2]
c) Compute and record deferred tax
b) Explain the exemption from the amounts in the financial statements.[2]
recognition criteria for leases in the
records of the lessee.[2]

9. Reporting financial performance e) Apply the principles of recognition of

revenue, and specifically account for the
a) Discuss the importance of identifying following types of transaction:[2]
and reporting the results of discontinued i) principal versus agent
operations.[2] ii) repurchase agreements
iii) bill and hold arrangements
b) Define and account for non-current iv) consignment arrangements
assets held for sale and discontinued
operations.[2] f) Prepare financial statement extracts for
contracts where performance obligations
c) Indicate the circumstances where are satisfied over time or at a point in
separate disclosure of material items of time.[2]
income and expense is required.[2]
11. Government grants
d) Account for changes in accounting
estimates, changes in accounting policy a) Apply relevant IFRS Accounting
and correction of prior period errors.[2] Standards in relation to accounting for
government grants.[2]
e) Earnings per share (eps):[2]
i) calculate the eps in accordance with 12. Foreign currency transactions
relevant IFRS Accounting Standards
(dealing with bonus issues, full market a) Explain the difference between
value issues and rights issues) functional and presentation currency and
ii) explain the relevance of the diluted explain why adjustments for foreign
eps and calculate the diluted eps currency transactions are necessary.[2]
involving convertible debt and share
options (warrants) b) Account for the translation of foreign
currency transactions and monetary/non-
10. Revenue monetary foreign currency items at the
reporting date.[2]
a) Explain and apply the principles of
recognition of revenue:[2] C Analysing and interpreting
(i) Identification of contracts
(ii) Identification of performance
the financial statements of
obligations single entities and groups
(iii) Determination of transaction price
(iv) Allocation of the price to 1. Limitations of financial statements
performance obligations
(v) Recognition of revenue when/as a) Indicate the problems of using historic
performance obligations are information to predict future performance
satisfied. and trends.[2]
b) Explain and apply the criteria for b) Discuss how financial statements may
recognising revenue generated from be manipulated to produce a desired
contracts where performance obligations effect.[2]
are satisfied over time or at a point in
time.[2] c) Explain why figures in a statement of
financial position may not be
c) Describe the acceptable methods for representative of average values
measuring progress towards complete throughout the period for example, due
satisfaction of a performance to:[2]
obligation.[2] i) seasonal trading
ii) major asset acquisitions near the
d) Explain and apply the criteria for the end of the accounting period.
recognition of contract costs.[2]

d) Explain how the use of consolidated have on the ability to interpret

financial statements might limit performance and financial position.[2]
interpretation techniques.[2]
c) Compare the usefulness of cash flow
2 Calculation and interpretation of information with that of a statement of
accounting ratios and trends to profit or loss or a statement of profit or
address users’ and stakeholders’ loss and other comprehensive income.[2]
needs
d) i) explain why the trend of eps may
a) Define and compute relevant financial be a more accurate indicator of
ratios.[2] performance than a company’s
profit trend and the importance of
b) Explain what aspects of performance eps as a stock market indicator[2]
specific ratios are intended to assess.[2] ii) discuss the limitations of using
eps as a performance
c) Analyse and interpret ratios to give an measure.[2]
assessment of an entity’s/group’s
performance and financial position in 4. Not-for-profit and public sector
comparison with: [2] entities
i) previous period’s financial
statements a) Explain how the interpretation of the
ii) another similar entity/group for financial statement of a not-for-profit or
the same reporting period public sector organisation might differ
iii) industry average ratios. from that of a profit-making entity by
reference to the different aims,
d) Interpret financial statements (including objectives and reporting requirements.[1]
statements of cash flows) together with
other financial and non-financial D Preparation of financial
information to assess the performance
and financial position of an entity and to
statements
give advice from the perspectives of
1. Preparation of single entity financial
different stakeholders.[2]
statements
e) Discuss how the use of current values
a) Prepare an entity’s statement of financial
affects the interpretation of financial
position and statement of profit or loss
statements and how this would compare
and other comprehensive income in
to using historical cost.[2]
accordance with the structure and
content prescribed within IFRS
f) Indicate other information, including non-
Accounting Standards and with
financial information, that may be of
accounting treatments as identified
relevance to the assessment of an
within syllabus areas A, B and C.[2]
entity’s performance and financial
position.[1]
b) Prepare and explain the contents and
purpose of the statement of changes in
3. Limitations of interpretation
equity.[2]
techniques
c) Prepare extracts from a statement of
a) Discuss the limitations in the use of ratio
cash flows for a single entity (not a
analysis for assessing performance and
group) in accordance with relevant IFRS
financial position.[2]
Accounting Standards using the indirect
method only.[2]
b) Discuss the effect that changes in
accounting policies or the use of different
accounting polices between entities can

2. Preparation of consolidated financial i) Explain and illustrate the effect of the

statements for a simple group disposal of a parent’s investment in a
subsidiary in the parent’s individual
a) Prepare a consolidated statement of financial statements and/or those of the
financial position for a simple group group, including as a discontinued
(parent and up to two subsidiaries operation (restricted to disposals of the
controlled by the parent and one parent’s entire investment in the
associate of the parent) dealing with pre- subsidiary).[2]
and post-acquisition profits, non-
controlling interest (at fair value or as a E Employability and technology
proportion of net assets at the
acquisition date) and consolidated
skills
goodwill.[2]
1. Use computer technology to
efficiently access and manipulate
b) Prepare a consolidated statement of
relevant information.
profit or loss and consolidated statement
of profit or loss and other comprehensive
2. Work on relevant response options,
income for a simple group dealing with
an acquisition or disposal in the period
technology, as would be required in
and non-controlling interest.[2]
the workplace.
c) Explain and account for other
3. Navigate windows and computer
components of equity (e.g. share
screens to create and amend
premium and revaluation surplus).[2]
responses to exam requirements,
d) Account for the effects in the financial
statements of intra-group trading.[2]
4. Present data and information
effectively, using the appropriate
e) Account for the effects of fair value
tools.
adjustments (including their effect on
consolidated goodwill) to: [2]
i) depreciating and non- depreciating
non-current assets
ii) inventory
iii) monetary liabilities
iv) assets and liabilities not included
in the subsidiary’s own statement
of financial position, including
contingent assets and contingent
liabilities
f) Account for goodwill impairment.[2]
g) Describe and apply the required

accounting treatment for consolidated
goodwill.[2]
h) Indicate why the fair value of purchase

consideration for an investment may be
less than the fair value of the acquired
identifiable net assets and how the
difference (bargain purchase) should be
accounted for.[2]

12. Summary of changes to Financial Reporting (FR)
stakeholders such as employers, students, regulatory and advisory bodies and learning
providers.
There have been some minor changes to the study guide for September 2023 to June 2024
which have been outlined in Table 1.
Table 1 – Amendments to FR syllabus from September 2023
Section and Syllabus content Rationale

subject area
Throughout Where references to the appropriate For clarification.

intellectual level for individual learning
outcomes were missing, these have
now been included. All intellectual
levels for learning outcomes have
been reviewed and updated where
appropriate.
Throughout Changed ‘IFRS Standards’ to ‘IFRS To align with the IFRS

Accounting Standards’ Foundation® trademark
guidelines
A2(e) Changed ‘overcomes the problems of’ For clarification.

to ‘fully addresses the issues related
to’.
A3(f) This is a new learning outcome. Included in response to the

establishment of the
International Sustainability
Standards Board (ISSB™).
A4 Removed the following learning To better reflect the current

outcome which was previously A4(e): requirements of IFRS
Accounting Standards.
Explain why directors may not
wish to consolidate a
subsidiary and when this is
permitted by IFRS Standards
and other applicable
regulation.
B2/D2 The following learning outcome: To better reflect the subject

area that this learning outcome
Indicate why the fair value of relates to.
purchase consideration for an
investment may be less than
the fair value of the acquired

identifiable net assets and

how the difference should be
accounted for.
was previously learning outcome

B2(e).
It has now been moved to D2(h). In

addition, the term ‘(bargain purchase)’
has now been added to the learning
outcome.
B4 Changed ‘Inventory and biological To better reflect the names of

assets’ to ‘Inventories and agriculture’. the related IFRS Accounting
Standards.
B6(c) Changed ‘agreements’ to To better reflect the wording in

‘transactions where sales proceeds the IFRS Accounting Standards
are equal to fair value’. and to clarify that sales
proceeds will always be equal
to fair value in the FR exam.
B7(f) Added ‘decommissioning’ to B7(f)(iii) To better reflect the current

and changed B7(f)(iv) from ‘provisions requirements of IFRS
for future repairs or refurbishments’ to Accounting Standards.
‘restructuring’.
B8(b) Added ‘and deductible’. For clarification.
B11(a) Removed ‘the provisions of’. For clarification.
C1(b) Removed ‘(creative accounting, To avoid obscuring the

window dressing)’. seriousness of manipulating
financial statements.
C2 The following learning outcomes: For clarification.
1. Interpret financial statements

(including statements of cash
flows) together with other
financial information to give
advice from the perspectives
of different stakeholders.
2. Interpret financial statements

financial information to assess
the performance and financial
position of an entity.
were previously C2(d) and C2(e)

respectively. They have now been

combined into a single learning

outcome with an additional reference
to ‘non-financial’ information:
Interpret financial statements

financial and non-financial
information to assess the
performance and financial
position of an entity and to
give advice from the
perspectives of different
stakeholders.
C3(a) Deleted ‘corporate’ and added ‘and For clarification.

financial position’.
C3(b) Added ‘and financial position’. For clarification.
C4 Deleted ‘Specialised’ from the title of To better reflect the current

the learning outcome and from the requirements of IFRS
detailed wording in C4(a). Accounting Standards.

Strategic Business Reporting (SBR) (INT)
Strategic
Business
Reporting
(SBR- INT)

examination session
© ACCA 2021-2022 All rights reserved.

Strategic Business Reporting – (SBR-INT)
Contents
recognition ............................................... 3
assessment.............................................. 7
6. Relational diagram linking Strategic
Business Reporting (SBR-INT) with other
exams ...................................................... 8
7. Approach to examining the syllabus ..... 8
8. Introduction to the syllabus................... 9
9. Main capabilities ................................ 11
10. The syllabus ..................................... 12
12. Summary of changes to Strategic
Business Reporting (SBR-INT) .............. 17


qualification.
levels:
find themselves.
comprehension
assessed.
with Applied Knowledge, level 2 equates to
each area.
Applied Skills and level 3 to Strategic
Professional, some lower level skills can
that occasionally some higher level
levels.



Essentials:
encourage students to study across the familiarise themselves with the fictitious
assessed by a two-hour computer based and the industry in which it operates.
examination.
The other Applied Skills examinations Strategic Business Reporting is a three hour
(PM, TX-UK, FR, AA, and FM) contain a mix 15 minutes exam. It contains two sections
of objective and longer type questions with a and all questions are compulsory. This exam
duration of three hours for 100 marks. These contains four professional marks.
informed of the exam instructions. three hours 15 minutes computer-based


Time management


5. Guide to ACCA



documents.

approved.


list.

6. Relational diagram linking Strategic Business Reporting

(SBR-INT) with other exams
Some exams are directly underpinned by other exams such as Strategic Business Reporting
by Financial Reporting. This diagram indicates where students are expected to have
underpinning knowledge and where it would be useful to review previous learning before
undertaking study.
The syllabus is assessed by a three-hour fifteen minute examination. It examines

professional competences within the business reporting environment.
Students will be examined on concepts, theories, and principles, and on their ability to
question and comment on accounting treatments.
Students should be capable of relating professional issues to relevant concepts and practical
situations. The evaluation of accounting practices and the identification of issues will be a
key element of the exam. Professional and ethical judgement will need to be exercised,
together with the integration of technical knowledge when addressing business reporting
issues in a business context.
Students will be required to adopt either a stakeholder or an external focus in answering

questions and to demonstrate professional skills such as problem solving, dealing with
information and decision making. Students will also have to demonstrate communication
skills appropriate to the scenario.
The exam also deals with specific professional knowledge appropriate to the preparation and
presentation of consolidated and other financial statements from accounting data, to conform
with accounting standards.

Section A
Section A will consist of two scenario based questions that will total 50 marks. The first
question will be based on the financial statements of group entities, or extracts thereof
(syllabus area D), and is also likely to require consideration of some financial reporting
issues (syllabus area C). Candidates should understand that in addition to the consideration
of the numerical aspects of group accounting a discussion and explanation of these numbers
will also be required. The first question will be worth 30 marks. The second question in
Section A, worth 20 marks, will require candidates to consider the reporting implications and
the ethical implications of specific events in a contemporary scenario.
Section B
Students will be required to answer a further two questions, each worth 25 marks, in Section
B, which will be scenario-based and contain both discursive and computational elements.
Section B could deal with any aspect of the syllabus but will always include either a full
question, or part of a question, that requires the appraisal of financial and/or non-financial
information from either the preparer’s or another stakeholder’s perspective.
Two professional marks will be awarded in question two and two in question four. Further
guidance will be given in the questions clarifying what these professional marks will be
awarded for.
The aim of the syllabus is to discuss, apply and evaluate the concepts, principles and
practices that underpin the preparation and interpretation of corporate reports in various
contexts including the ethical assessment of managements’ stewardship and the information
needs of a diverse group of stakeholders.
The syllabus for Strategic Business Reporting, assumes knowledge acquired at the Applied
Skills level including the core technical capabilities to prepare and analyse financial reports
for single and combined entities.
The syllabus requires students to examine corporate reporting from a number of

perspectives, not only from the point of view of the preparer of corporate reports, but also
from the perspective of a variety of different stakeholders such as finance providers and
investors. The syllabus further requires the assessment and evaluation of the reporting
decisions made by management and their implications for a range of stakeholders and
entities. It also explores the professional and ethical responsibilities of the accountant to
these stakeholders.
The subject matter of the syllabus requires students to have an understanding of the IASB’s
Conceptual Framework for Financial Reporting® and to use the Framework as a basis for
judgement in applying International Financial Reporting Standards in corporate reports. The
syllabus considers both the principles and practices of IFRS® Standards and uses these
principles as a basis for the preparation of the financial statements of single entities and
groups.
The syllabus requires students to reflect on the usefulness of corporate reports to

stakeholders including developments in narrative reporting such as Integrated Reporting and
sustainability reporting and to discuss the nature of the information that would help
stakeholders assess the future prospects of the entity. This involves the analysis and

interpretation of corporate reports, and the provision of advice on the reporting implications
of transactions.
The penultimate section of the syllabus addresses developments in corporate reporting and
the implications of any potential changes. This includes a discussion of the deficiencies of
existing accounting standards and the ability to explain the implications for a business and
its stakeholders of significant changes to reporting frameworks.
Question scenarios will be based in contemporary business settings, however, candidates

will not be required to have detailed knowledge of these businesses. Question scenarios will
be current and relevant for example the impact of climate change.
The final section of the syllabus contains outcomes relating to the demonstration of
appropriate digital and employability skills in preparing for and taking the SBR examination.
This includes being able to access and open exhibits, requirements and response options
from different sources and being able to use the relevant functionality and technology to
prepare and present response options in a professional manner. These skills are
specifically developed by practicing and preparing for the SBR exam, using the learning
support content for computer-based exams available via the practice platform and the ACCA
website and will need to be demonstrated during the live exam.

On successful completion of this paper, candidates should be able to:
A Apply fundamental ethical and professional principles to ethical dilemmas and discuss
the consequences of unethical behaviour
B Evaluate the appropriateness of the financial reporting framework and critically discuss
changes in accounting regulation
C Apply professional judgement in the reporting of the financial performance of a range of

entities
NOTE the learning outcomes in Section C of the syllabus can apply to: single entities,
groups, public sector entities and not-for profit entities (where appropriate)
D Prepare the financial statements of groups of entities
E Interpret financial statements for different stakeholders
F Communicate the impact of changes and potential changes in accounting

regulation on financial reporting
G Demonstrate employability and technology skills

10. The syllabus 3. Foreign transactions and entities
E Interpret financial statements for

A Fundamental ethical and professional different stakeholders
principles
1. Analysis and interpretation of financial
1. Professional and ethical behaviour in information and measurement of
corporate reporting performance
B The financial reporting framework F The impact of changes and potential

changes in accounting regulation
1. The applications, strengths and
weaknesses of the accounting 1. Discussion of issues in financial
framework reporting
C Reporting the financial performance

of a range of entities G Employability and technology skills
1. Use computer technology to efficiently

1. Revenue
access and manipulate relevant
information.
2. Non-current assets
3. Financial instruments using available functions and
technology, as would be required in the
4. Leases workplace.
5. Employee benefits 3. Navigate windows and computer screens

to create and amend responses to exam
6. Income taxes requirements, using the appropriate
tools.
7. Provisions, contingencies and events
after the reporting period 4. Present data and information effectively,
8. Share-based payment
9. Fair Value Measurement
10. Reporting requirements of small and

medium-sized entities (SMEs)
11. Other reporting issues
D Financial statements of groups of

entities
1. Group accounting including statements

of cash flows
2. Associates and joint arrangements

11. Detailed study guide
A Fundamental ethical and C Reporting the financial

professional principles performance of a range of
entities
1. Professional and ethical behaviour in
corporate reporting 1. Revenue
a) Appraise and discuss the importance of a) Discuss and apply the criteria that must
ethical and professional behaviour in be met before an entity can recognise
complying with accounting standards revenue.[3]
and corporate reporting requirements.[3]
b) Discuss and apply the criteria for
b) Assess and discuss the consequences recognition of contract revenue and
of unethical behaviour by management contract costs including contract
in carrying out their responsibility for the modifications.[3]
preparation of corporate reports [3]
c) Evaluate and apply the recognition and
B The financial reporting measurement of revenue including
framework performance obligations satisfied over
time, sale with a right of return,
1. The applications, strengths and repurchase agreements, consignment
weaknesses of an accounting arrangements, warranties, variable
framework consideration, principal versus agent
considerations and non-refundable up-
a) Discuss the importance of the front fees.[3]
Conceptual Framework for Financial
Reporting in underpinning the production 2. Non-current assets
of accounting standards.[3]
a) Evaluate and apply the recognition,
b) Discuss the objectives, principles and derecognition and measurement of non-
limitations of financial reporting including current assets including impairments and
presentation and disclosure of revaluations.[3]
information.[3]
b) Evaluate and apply the accounting
c) Discuss the qualitative characteristics of requirements for the classification and
useful financial information including measurement of non-current assets held
disclosure.[3] for sale.[3]
d) Evaluate the principles of recognition, c) Evaluate and apply the accounting

derecognition and measurement, treatment of investment properties
including measurement uncertainty and including classification, recognition,
materiality.[3] measurement and change of use.[3]
e) Critically discuss and apply the d) Evaluate and apply the accounting
definitions of the elements of financial treatment of intangible assets including
statements and the reporting of items in the criteria for recognition and
the statement of profit or loss and other measurement subsequent to
comprehensive income.[3] acquisition.[3]
e) Evaluate and apply the accounting

treatment for borrowing costs.[2]

3. Financial instruments d) Justify and apply the separation of the

components of a lease contract into
a) Evaluate and apply the initial recognition lease and non-lease elements.[3]
and measurement of financial
instruments including the business e) Evaluate and apply the recognition
model test.[3] exemptions under the current leasing
standard.[3]
b) Explain and apply the subsequent
measurement of financial assets and f) Discuss and apply the accounting for
financial liabilities including the fair value sale and leaseback transactions.[3]
option and financial liability
modifications.[3] 5. Employee benefits
c) Discuss and apply the derecognition of a) Evaluate and apply the accounting
financial assets and financial liabilities.[2] treatment of short term and long term
employee benefits, termination benefits
d) Discuss and apply the reclassification of and defined contribution and defined
financial assets.[2] benefit plans.[3]
e) Account for derivative financial b) Account for gains and losses on

instruments.[2] settlements and curtailments.[2]
f) Explain and apply the qualifying criteria c) Account for the “Asset Ceiling” test and
for hedge accounting and account for fair the reporting of actuarial gains and
value hedges and cash flow hedges losses.[2]
including hedge effectiveness[2]
6. Income taxes
g) Discuss and apply the general approach
to impairment of financial instruments a) Evaluate and apply the recognition and
including the basis for estimating measurement of current and deferred tax
expected credit losses.[2] liabilities and assets.[3]
h) Discuss the implications of a significant b) Discuss and apply the treatment of

increase in credit risk.[2] deferred taxation on a business
combination.[2]
i) Discuss and apply the treatment of
purchased or originated credit impaired 7. Provisions, contingencies and events
financial assets.[2] after the reporting period
4. Leases a) Evaluate and apply the recognition, de-

recognition and measurement of
a) Evaluate and apply the lessee provisions, contingent liabilities and
accounting requirements for leases contingent assets including onerous
including the identification of a lease and contracts,environmental provisions and
the measurement of the right-of-use restructuring provisions.[3]
asset and lease liability.[3]
b) Evaluate and apply the accounting for
b) Evaluate and apply the accounting for events after the reporting period.[3]
leases by lessors.[3]
8. Share-based payment
c) Evaluate and apply the circumstances
where there may be re-measurement of a) Evaluate and apply the recognition and
the lease liability.[3] measurement of share-based payment
transactions.[3]

9. Fair Value Measurement a) Evaluate and apply the principles behind

determining whether a business
a) Evaluate and apply the principles of ‘fair combination has occurred including the
value’ measurement and ‘active control principle.[3]
market’.[3]
b) Evaluate and apply the method of
b) Evaluate and apply the ‘fair value accounting for a business combination
hierarchy’ including valuation including identifying an acquirer and the
techniques.[3] principles in determining the cost of a
business combination.[3]
c) Justify and apply the principles of
highest and best use, most c) Justify the recognition and measurement
advantageous and principal market.[3] criteria used for identifying acquired
assets and liabilities including contingent
10. Reporting requirements of small and amounts and intangible assets.[3]
medium-sized entities (SMEs)
d) Evaluate and apply the accounting for
a) Discuss the key differences in goodwill and non-controlling interests.[3]
accounting treatment between full IFRS
Standards and the IFRS for SMEs e) Evaluate and apply the accounting
Standard®.[2] principles relating to a business
combination achieved in stages.[3]
b) Discuss and apply the simplifications
introduced by the IFRS for SMEs f) Determine and apply appropriate
Standard.[2] procedures to be used in preparing
consolidated financial statements.[3]
11. Other reporting issues
g) Evaluate and apply the implications of
a) Evaluate and apply the accounting changes in ownership interest and loss
for, and disclosure of, government of control or significant influence.[3]
grants and other forms of
government assistance.[3] h) Appraise the impact on group financial
statements where activities have been
b) Appraise and apply the judgements discontinued.[3]
made in selecting and applying
accounting policies, accounting for i) Discuss and apply the treatment of a
changes in estimates and reflecting subsidiary which has been acquired
corrections of prior period errors.[3] exclusively with a view to subsequent
disposal.[2]
c) Identify related parties and assess the
implications of related party relationships j) Discuss and apply accounting for group
in the preparation of corporate reports.[2] companies in the separate financial
statements of the parent company.[2]
d) Evaluate and apply the principles
relating to the presentation and k) Identify and explain the circumstances
disclosure of information in the financial when a group may claim an exemption
statements. [3] from the preparation of consolidated
financial statements.[2]
D Financial statements of
groups of entities l) Evaluate and apply the principles
relating to the preparation of group
statements of cash flows.[3]
1. Group accounting including
statements of cash flows

2. Associates and joint arrangements 1. Discussion of issues in financial

reporting
a) Justify the use of, and apply the equity
method a) Appraise the accounting implications of
of, accounting for associates.[3] the adoption of new accounting
standards.[2]
b) Discuss and apply the application of the
joint control principle and apply to the b) Discuss issues and deficiencies which
classification of joint arrangements.[3] have led to proposed changes to an
accounting standard.[2]
3. Foreign transactions and entities
c) Evaluate and apply one or more existing
a) Evaluate and apply the translation of accounting standards to contemporary
foreign currency amounts and issues such as:
transactions into the functional currency • digital assets
and the presentational currency.[3] • natural disasters
• climate change
b) Evaluate and apply the principles • global events
relating to the consolidation of foreign • going concern.[3]
operations, including subsidiaries,
associates and joint arrangements, and d) Discuss developments in corporate
their disposal.[3] reporting related to sustainability
reporting and sustainability standards.[2]
E Interpret financial statements
for different stakeholders G Employability and technology
skills
1. Analysis and interpretation of
financial information and
measurement of performance 1. Use computer technology to
a) Evaluate the relevant indicators of relevant information.
financial and non-financial performance
including earnings per share and 2. Work on relevant response options,
additional performance measures.[3] using available functions and
b) Appraise the impact of environmental, the workplace.
social, and ethical factors on
disclosure.[3] 3. Navigate windows and computer
c) Evaluate and explain the principles of responses to exam requirements,
reportable segments.[3] using the appropriate tools.
d) Discuss the importance of sustainability 4. Present data and information

reporting, integrated reporting and effectively, using the appropriate
segmental information to stakeholders.[2] tools.
e) Evaluate the usefulness of management

commentary to investors.[2]
F The impact of changes and

potential changes in
accounting regulation

12. Summary of changes to Strategic Business Reporting

(SBR-INT)
providers.
Many of the verbs used in the learning outcomes (LO) have been amended in line with the
mapping of cognitive intellectual levels to instructive verbs according to Bloom’s taxonomy.
Some of the cognitive intellectual levels have been altered to better reflect how the LOs are
likely to be examined. The specific LOs affected have been included below.
The main areas which have been added to or removed from the syllabus are summarised in
the table below.
Table 1 – Amendments to SBR (INT)
22/23 LO Section and subject area Syllabus content change (referring

reference to 23/24 LO)
B1 b) The financial reporting Removed the narrow reference to

framework stewardship
B1 c) The financial reporting Increased the focus on disclosure of
framework information.
B1 d) The financial reporting Removed duplication and reduced
framework number of LOs. Prudence and
substance over form are part of LO B1c
(23/24).
B1 e) The financial reporting Removed duplication and reduced
framework number of LOs. Measurement
uncertainty and materiality have been
included in LO B1d (23/24).
C1 b) Revenue Removed duplication and reduced
number of LOs.
C1 c) Revenue Included contract modifications
specifically.(now C1b)
C1 d) Revenue Included repurchase agreements
specifically.(now C1c)
C3 a) Financial instruments Included the business model test
specifically.
C3 b) Financial instruments Included both the fair value option and
financial liability modifications
specifically.

C3 e) Financial instruments Removed embedded derivatives.
C6 a), b) Income taxes Removed duplication and reduced

number of LOs.
C8 b) Share-based payment Removed to enhance focus on core
elements of IFRS 2.
C9 b), d) Fair value measurement Reduced number of LOs. Valuation
techniques are part of LO C9b (23/24).
C10 a), b) Reporting requirements of small Decreased cognitive level from 3 to 2
and medium-sized entities to align with application and analysis
(SMEs) only.
C11 a) Other reporting issues Increased the cognitive level of a) from
2 to 3 to align with increased exposure
in the exam and a deeper level of
evaluation and understanding required.
C11 b) Other reporting issues Removed because of duplication with
LO C11b (23/24) and the application of
IAS 34 will not be examined.
C11 d) Other reporting issues Decreased cognitive level from 3 to 2
to align with application and analysis
only.
C11 Other reporting issues Created a new LO C11d (23/24) to
highlight the importance of
understanding and applying the
principles of presentation and
disclosure as set out in IAS 1
D1 a), f) Group accounting including Included the control principle
statement of cash flows specifically (D1a 23/24), reducing the
number of Los (removed D1f), and
increased the cognitive level from 2 to
3 to reflect the depth of evaluation
required.
D1 b) Group accounting including Increased the cognitive level from 2 to
statement of cash flows 3 to reflect the depth of evaluation
required.
D1 i) Group accounting including Removed ‘or have been acquired or
statement of cash flows disposed of in the period’ as this is
already duplicated in other LOs.
D1 Group accounting including D1j (23/24) moved from D3a (see
statement of cash flows below)
D1 k) Group accounting including Reduced the scope of the LO.
statement of cash flows
D1 l) Group accounting including Clarifying that candidates need to
statement of cash flows understand how to prepare a group
statement of cash flows but will not
need to prepare one from scratch.

D2 a) Associates and joint Reduced number of LOs. Duplicated in

arrangements D2a (23/24).
D2 c), d), e) Associates and joint Removed duplication and reduced
arrangements number of LOs.
D3 a) Changes in group structure Removed D3 completely and brought
D3a (22/23) into section D1j (23/24).
E1 b) Interpret financial statements for Removed as we now feel that this has
different stakeholders progressed beyond this LO and is
covered in more detail in E1d (23/24).
E1 c) Interpret financial statements for Additional performance measures are
different stakeholders covered in E1a (23/24) and we wanted
to highlight the importance of general
disclosure within the syllabus.
E1 d) Interpret financial statements for Increased the scope of the LO to
different stakeholders include the importance of integrated
reporting and segmental reporting.
This has been set at cognitive level 2 to
align with the application required in
the exam questions.
E1 e) Interpret financial statements for Reduced the number of LOs and
different stakeholders included in E1d (23/24).
E1 g) Interpret financial statements for Reduced the number of LOs and
different stakeholders included in E1d (23/24).
E1 Interpret financial statements for Created a new LO E1e (23/24) to focus
different stakeholders on management commentary including
Practice Statement 1.
F1 Discussion of issues in financial It was felt that the term ‘current issues’
reporting created some anxiety about exposure
drafts and discussion papers, so this
term has been removed from the
syllabus section title.
F1 a) Discussion of issues in financial Removed the words ‘first time’ as we
reporting have decided not to test the application
of IFRS 1 and this removes any
ambiguity around this decision.
F1 b) Discussion of issues in financial Cognitive level reduced from 3 to 2 to
reporting align with the application required in
the exam questions.
F1 c) Discussion of issues in financial Improved wording to add clarity as to
reporting how this will be tested.
F1 d) Discussion of issues in financial Removed F1d from this section but
reporting materiality is part of LO B1d (23/24)
and management commentary is part
of LO E1e (23/24).

F1 e) Discussion of issues in financial Removed to reduce the number of LOs

reporting as this is now covered by E1d (23/24)
and E1e (23/24).
F1 f) Discussion of issues in financial Reduced the cognitive level from 3 to 2
reporting to reassure candidates that
sustainability reporting will not be
tested in great depth in 23/24.

Financial Management (FM)
Financial
Management
(FM)

examination session

Contents
1. Intellectual levels .....................................3
...................................................................3
3. The structure of ACCA qualification ........4
delivery mode .............................................5
5. Guide to ACCA examination assessment7
Management (FM) with other exams ...........8
7. Approach to examining the syllabus ........8
8. Introduction to the syllabus......................9
9. Main capabilities ...................................10
10. The syllabus ........................................11
11. Detailed study guide............................13
Management (FM) ....................................20


qualification.
syllabuses and study guides are assessed at
one of three intellectual or cognitive levels:
circumstances in which ACCA students find
themselves.
comprehension
As a member of the International Federation
of Accountants, ACCA seeks to enhance the
education recognition of its qualification on
both national and international education
Very broadly, these intellectual levels relate
frameworks, and with educational authorities
to the three cognitive levels at which the
Applied Knowledge, the Applied Skills and
aims to ensure that its qualification is
the Strategic Professional exams are
recognised and valued by governments,
assessed.
regulatory authorities and employers across
all sectors. To this end, the ACCA
guide included in this document is given a 1,
2, or 3 superscript, denoting intellectual
learning outcome. This gives an indication of
the intellectual depth at which an area could
Each syllabus is organised into main subject
be assessed within the examination.
area headings which are further broken
However, while level 1 broadly equates with
down to provide greater detail on each area.
Applied Knowledge, level 2 equates to
progresses through each level. This reflects
that at each stage of study there will be a
requirement to broaden, as well as deepen
capabilities. It is also possible that
occasionally some higher-level capabilities
may be assessed at lower levels.



Essentials:
encourage candidates to study across the familiarise themselves with the fictitious
examination.



Time management


5. Guide to ACCA
ACCA reserves the right to examine

anything contained within the study guide.
This includes knowledge, techniques,
and assurance, law and tax exams except


the future.
The term issued or passed relates to when

regulations or legislation has been formally
approved.
The term effective relates to when

regulations or legislation must be applied to
an entity’s transactions and business
practices.

list.

6. Relational diagram linking Financial Management (FM)

with other exams
Some exams are directly underpinned by other exams such as Advanced Financial
Management with Financial Management. This diagram indicates where students are
expected to have underpinning knowledge and where it would be useful to review previous
learning before undertaking study.
The syllabus is assessed by a three-hour computer based examination. All questions are
compulsory. The exam will contain both computational and discursive elements. Some
questions will adopt a scenario/case study approach.
Prior to the start of the exam candidates are given an extra 10 minutes to read the exam
instructions.
Candidates are provided with a formulae sheet and tables of discount and annuity factors.
Section A of the computer-based exam comprises 15 objective test questions of 2 marks

each.
Section B of the computer-based exam comprises three questions each containing five
objective test questions.
Section C of the exam comprises two 20-mark constructed response questions. The two 20-
mark questions will mainly come from the working capital management, investment appraisal
and business finance areas of the syllabus. The section A and section B questions can cover
any areas of the syllabus.
Total 100 marks

The aim of the syllabus is to develop the knowledge and skills expected of a finance manager,
in relation to investment, financing, and dividend policy decisions.
The syllabus for Financial Management is designed to equip candidates with the skills that
would be expected from a finance manager responsible for the finance function of a business.
It prepares candidates for more advanced and specialist study in Advanced Financial
Management.
The syllabus, therefore, starts by introducing the role and purpose of the financial
management function within a business. Before looking at the three key financial management
decisions of investing, financing, and dividend policy, the syllabus explores the economic
environment in which such decisions are made.
The next section of the syllabus is the introduction of investing decisions. This is done in two
stages - investment in (and the management of) working capital and the appraisal of long-term
investments.
The next area introduced is financing decisions. This section of the syllabus starts by
examining the various sources of business finance, including dividend policy and how much
finance can be raised from within the business. It also looks at the cost of capital and other
factors that influence the choice of the type of capital a business will raise. The principles
underlying the valuation of business and financial assets, including the impact of cost of capital
on the value of business, is covered next.
The syllabus then covers an introduction to, and examination of, risk and the main techniques
employed in managing such risk.
Section H of the syllabus contains outcomes relating to the demonstration of appropriate digital
and employability skills in preparing for and taking the FM examination. This includes being
format and being able to use the relevant functionality and technology to prepare and present
response options in a professional manner. These skills are specifically developed by
practicing and preparing for the FM exam, using the learning support content for computer-
based exams available via the practice platform and the ACCA website and will need to be
demonstrated during the live exam.

A Discuss the role and purpose of the financial management function
B Assess and discuss the impact of the economic environment on financial management
C Discuss and apply working capital management techniques
D Carry out effective investment appraisal
E Identify and evaluate alternative sources of business finance
F Discuss and apply principles of business and asset valuations
G Explain and apply risk management techniques in business
H Demonstrate employability and technology skills

E Business finance
10. The syllabus
1. Sources of, and raising, business
A Financial management function finance
1. The nature and purpose of financial 2. Estimating the cost of capital

management
3. Sources of finance and their relative
2. Financial objectives and relationship with costs
corporate strategy
4. Capital structure theories and practical
3. Stakeholders and impact on corporate considerations
objectives
5. Finance for small- and medium-sized
4. Financial and other objectives in not-for- entities (SMEs)
profit organisations
F Business valuations
B Financial management environment
1. Nature and purpose of the valuation of
1. The economic environment for business business and financial assets
2. The nature and role of financial markets 2. Models for the valuation of shares
and institutions
3. The valuation of debt and other financial
3. The nature and role of money markets assets
C Working capital management 4. Efficient market hypothesis (EMH) and

practical considerations in the valuation
1. The nature, elements and importance of of shares
working capital
G Risk management
2. Management of inventories, accounts
receivable, accounts payable and cash 1. The nature and types of risk and
approaches to risk management
3. Determining working capital needs and
funding strategies 2. Causes of exchange rate differences
and interest rate fluctuations
D Investment appraisal
3. Hedging techniques for foreign currency
1. Investment appraisal techniques risk
2. Allowing for inflation and taxation in 4. Hedging techniques for interest rate risk
DCF
H Employability and technology skills
3. Adjusting for risk and uncertainty in
investment appraisal 1. Use computer technology to efficiently
4. Specific investment decisions (lease or information
buy, asset replacement, capital
rationing) 2. Work on relevant response options,
workplace


screens to create and amend responses
to exam requirements, using the
appropriate tools
4. Present data and information effectively,

using the appropriate tools

ii) changes in dividends and share

11. Detailed study guide prices as part of total shareholder
return.
A Financial management e) Explain ways to encourage the
function achievement of stakeholder objectives,
including:[2]
1. The nature and purpose of financial i) managerial reward schemes such as
management share options and performance-
related pay.
a) Explain the nature and purpose of ii) regulatory requirements such as
financial management.[1] corporate governance codes of
best practice and stock
exchange listing regulations.
b) Explain the relationship between
financial management and financial and 4. Financial and other objectives in not-
management accounting.[1] for-profit organisations
2. Financial objectives and the a) Discuss the impact of not-for-profit status

relationship with corporate strategy on financial and other objectives.[2]
a) Discuss the relationship between b) Discuss the nature and importance of

financial objectives, corporate objectives Value for Money as an objective in not-
and corporate strategy.[2] for-profit organisations.[2]
b) Identify and describe a variety of c) Discuss ways of measuring the

financial objectives, including: [2] achievement of objectives in not-for-
profit organisations.[2]
i) shareholder wealth maximisation
ii) profit maximisation B Financial management
iii) earnings per share growth. environment
3. Stakeholders and impact on 1. The economic environment for
corporate objectives business
a) Identify the range of stakeholders and a) Identify and explain the main
their objectives.[2] macroeconomic policy targets.[1]
b) Discuss the possible conflict between b) Define and discuss the role of fiscal,
stakeholder objectives.[2] monetary, interest rate and exchange
rate policies in achieving
c) Discuss the role of management in macroeconomic policy targets.[1]
meeting stakeholder objectives,
including the application of agency c) Explain how government economic
theory.[2] policy interacts with planning and
decision-making in business.[2]
d) Describe and apply ways of measuring
achievement of corporate objectives d) Explain the need for, and the interaction
including:[2] with, planning and decision-making in
i) ratio analysis, using appropriate business of:
ratios such as return on capital i) competition policy [1]
employed, return on equity, earnings ii) government assistance for
per share and dividend per share business [1]
iii) green policies and sustainability [1]
iv) corporate governance a) Describe the nature of working capital

regulation.[2] and identify its elements.[1]
2. The nature and role of financial b) Identify the objectives of working capital
markets and institutions management in terms of liquidity and
profitability, and discuss the conflict
a) Identify the nature and role of money between them.[2]
and capital markets, both nationally and
internationally.[2] c) Discuss the central role of working
capital management in financial
b) Explain the role of financial management.[2]
intermediaries.[1]
2. Management of inventories, accounts
c) Explain the functions of a stock market receivable, accounts payable and
and a corporate bond market.[2] cash
d) Explain the nature and features of a) Explain the cash operating cycle and the
different securities in relation to the role of accounts payable and accounts
risk/return trade-off.[2] receivable.[2]
e) Explain the impact of Fintech in b) Explain and apply relevant accounting

changing the nature and role of financial ratios, including: [2]
markets and institutions. [1] i) current ratio and quick ratio
ii) inventory turnover ratio, average
3. The nature and role of money markets collection period and average
payable period
a) Describe the role of the money markets
iii) sales revenue/net working capital
in:[1]
ratio.
i) providing short-term liquidity to c) Discuss, apply and evaluate the use of
the private sector and the public relevant techniques in managing
sector inventory, including the Economic Order
ii) providing short-term trade finance Quantity model and Just-in-Time
iii) allowing an organisation to techniques.[2]
manage its exposure to foreign
currency risk and interest rate d) Discuss, apply and evaluate the use of
risk. relevant techniques in managing
accounts receivable, including:
b) Explain the role of banks and other
i) assessing creditworthiness [1]
financial institutions in the operation of
ii) managing accounts receivable [1]
the money markets.[2]
iii) collecting amounts owing [1]
c) Explain and apply the characteristics and iv) offering early settlement
role of the principal money market discounts [2]
instruments:[2] v) using factoring and invoice
i) interest-bearing instruments discounting [2]
ii) discount instruments vi) managing foreign accounts
iii) derivative products. receivable.[2]
e) Discuss and apply the use of relevant

C Working capital management techniques in managing accounts
payable, including:
1. The nature, elements and importance i) using trade credit effectively [1]
of working capital ii) evaluating the benefits of early
settlement and bulk purchase
discounts [2]

iii) managing foreign accounts a) Identify and calculate relevant cash

payable.[1] flows for investment projects.[2]
f) Explain the various reasons for holding b) Calculate payback period and discuss
cash, and discuss and apply the use of its usefulness as an investment
relevant techniques in managing cash, appraisal method.[2]
including:[2] c) Calculate discounted payback and
i) preparing cash flow forecasts to discuss its usefulness as an
determine future cash flows and investment appraisal method.[2]
cash balances
ii) assessing the benefits of d) Calculate return on capital
centralised treasury management employed (accounting rate of return)
and cash control and discuss its usefulness as an
iii) cash management models, such investment appraisal method.[2]
as the Baumol model and the
Miller-Orr model e) Calculate net present value and discuss
iv) investing short-term. its usefulness as an investment
appraisal method.[2]
3. Determining working capital needs
and funding strategies f) Calculate internal rate of return and
discuss its usefulness as an
a) Calculate the level of working capital investment appraisal
investment in current assets and discuss method.[2]
the key factors determining this level,
including:[2] g) Discuss the superiority of
discounted cash flow (DCF)
i) the length of the working capital methods over non-DCF methods.[2]
cycle and terms of trade
ii) an organisation’s policy on the h) Discuss the relative merits of NPV
level of investment in current assets and IRR.[2]
iii) the industry in which the
organisation operates. 2. Allowing for inflation and
taxation in DCF
b) Evaluate and discuss the key factors in
determining working capital funding a) Apply and discuss the real-terms
strategies, including: and nominal-terms approaches to
i) the distinction between investment appraisal.[2]
permanent and fluctuating current
assets [2] b) Calculate the taxation effects of
ii) the relative cost and risk of short- relevant cash flows, including the
term and long-term finance [2] tax benefits of tax-allowable
iii) the matching principle [2] depreciation and the tax liabilities of
iv) the relative costs and benefits of taxable profit.[2]
aggressive, conservative and
matching funding policies [2] c) Calculate and apply before- and
v) management attitudes to risk, after-tax discount rates.[2]
previous funding decisions and
organisation size.[1] 3. Adjusting for risk and uncertainty
in investment appraisal
D Investment appraisal
a) Describe and discuss the difference
between risk and uncertainty in relation
1. Investment appraisal techniques to probabilities and increasing project
life.[2]

iii) trade credit

b) Apply sensitivity analysis to iv) lease finance.
investment projects and discuss the
usefulness of sensitivity analysis in b) Identify and discuss the range of
assisting investment decisions.[2] long-term sources of finance
available to businesses, including:[2]
c) Apply probability analysis to i) equity finance
investment projects and discuss the ii) debt finance
usefulness of probability analysis in iii) lease finance
assisting investment decisions.[2] iv) venture capital.
d) Apply and discuss other techniques c) Identify and discuss methods of

of adjusting for risk and uncertainty raising equity finance, including:[2]
in investment appraisal, including: i) rights issue
i) simulation [1] ii) placing
ii) adjusted payback [1] iii) public offer
iii) risk-adjusted discount rates. [2] iv) stock exchange listing.
4. Specific investment decisions d) Identify and discuss methods of raising

(Lease or buy, asset replacement, short- and long-term Islamic finance,
capital rationing) including:[1]
a) Evaluate leasing and borrowing to i) major differences between Islamic

buy using the before- and after-tax finance and the other forms of
costs of debt.[2] business finance.
ii) the concept of riba (interest) and
b) Evaluate asset replacement how returns are made by
decisions using equivalent annual Islamic financial securities.
cost and equivalent annual iii) Islamic financial instruments
benefit.[2] available to businesses
including:
c) Evaluate investment decisions under i) murabaha (trade credit)
single-period capital rationing, ii) ijara (lease finance)
including:[2] iii) mudaraba (equity
finance)
i) the calculation of profitability iv) sukuk (debt finance)
indexes for divisible investment v) musharaka (venture
projects capital).
ii) the calculation of the NPV of (note: calculations are not required)
combinations of non-divisible
investment projects e) Identify and discuss internal sources of
iii) a discussion of the reasons for finance, including:[2]
capital rationing. i) retained earnings
ii) increasing working capital
E Business finance management efficiency
iii) the relationship between dividend
1. Sources of, and raising, business policy and the financing decision
finance iv) the theoretical approaches to, and
the practical influences on, the
a) Identify and discuss the range of dividend decision, including legal
short-term sources of finance constraints, liquidity, shareholder
available to businesses, including:[2] expectations and alternatives to cash
i) overdraft dividends.
ii) short-term loan
2. Estimating the cost of capital operational and financial gearing,

interest coverage ratio and other
a) Estimate the cost of equity relevant ratios
including:[2] ii) cash flow forecasting
i) application of the dividend iii) leasing or borrowing to buy.
growth model, its
assumptions, advantages and e) Impact of cost of capital on
disadvantages. investments including:[2]
ii) explanation and discussion of i) the relationship between
systematic and unsystematic company value and cost of
risk capital.
iii) relationship between portfolio theory ii) the circumstances under which
and the capital asset pricing model WACC can be used in
(CAPM) investment appraisal
iv) application of the CAPM, its iii) the advantages of the CAPM
assumptions, advantages and over WACC in determining a
disadvantages. project-specific cost of capital.
iv) the application of the CAPM in
b) Estimating the cost of debt:[2] calculating a project-specific
i) irredeemable debt discount rate.
ii) redeemable debt
iii) convertible debt 4. Capital structure theories and
iv) preference shares practical considerations
v) bank debt.
a) Describe the traditional view of capital
c) Estimating the overall cost of capital structure and its assumptions.[2]
including:[2]
i) distinguishing between average b) Describe the views of Miller and
and marginal cost of capital Modigliani on capital structure, both
ii) calculating the weighted average without and with corporate taxation, and
cost of capital (WACC) using their assumptions.[2]
book value and market value
weightings. c) Identify a range of capital market
imperfections and describe their impact
3. Sources of finance and their relative on the views of Miller and Modigliani on
costs capital structure.[2]
a) Describe the relative risk-return d) Explain the relevance of pecking order

relationship and the relative costs of theory to the selection of sources of
equity and debt.[2] finance.[1]
b) Describe the creditor hierarchy and 5. Finance for small and medium sized
its connection with the relative costs entities (SMEs)
of sources of finance.[2]
a) Describe the financing needs of small
c) Identify and discuss the problem of businesses.[2]
high levels of gearing.[2]
b) Describe the nature of the financing
d) Assess the impact of sources of finance problem for small businesses in terms of
on financial position, financial risk and the funding gap, the maturity gap and
shareholder wealth using appropriate inadequate security.[2]
measures, including:[2]
i) ratio analysis using statement of c) Explain measures that may be taken to
financial position gearing, ease the financing problems of SMEs,

including the responses of government 4. Efficient Market Hypothesis (EMH)

departments and financial institutions.[1] and practical considerations in the
valuation of shares
d) Identify and evaluate the financial impact
of sources of finance for SMEs, including a) Distinguish between and discuss weak
sources already referred to in syllabus form efficiency, semi-strong form
section E1 and also [2] efficiency and strong form efficiency.[2]
i) Business angel financing
ii) Government assistance b) Discuss practical considerations in the
iii) Supply chain financing valuation of shares and businesses,
iv) Crowdfunding / peer-to-peer including:[2]
funding. i) marketability and liquidity of shares
ii) availability and sources of
information
F Business valuations iii) market imperfections and pricing
anomalies
1. Nature and purpose of the valuation
iv) market capitalisation.
of business and financial assets
c) Describe the significance of investor
a) Identify and discuss reasons for valuing
speculation and the explanations of
businesses and financial assets.[2]
investor decisions offered by behavioural
finance.[1]
b) Identify information requirements for
valuation and discuss the limitations of
different types of information.[2] G Risk Management
2. Models for the valuation of shares 1. The nature and types of risk and
approaches to risk management
a) Discuss and apply asset-based valuation
models, including:[2] a) Describe and discuss different types of
i) net book value (statement of foreign currency risk:[2]
financial position) basis i) translation risk
ii) net realisable value basis ii) transaction risk
iii) net replacement cost basis. iii) economic risk.
b) Discuss and apply income-based b) Describe and discuss different types of

valuation models, including:[2] interest rate risk:[1]
i) price/earnings ratio method i) gap exposure
ii) earnings yield method. ii) basis risk.
c) Discuss and apply cash flow-based 2. Causes of exchange rate differences

valuation models, including:[2] and interest rate fluctuations
i) dividend valuation model and the
dividend growth model a) Describe the causes of exchange rate
ii) discounted cash flow basis. fluctuations, including:
i) balance of payments [1]
3. The valuation of debt and other ii) purchasing power parity theory [2]
financial assets iii) interest rate parity theory [2]
iv) four-way equivalence.[2]
a) Discuss and apply appropriate valuation
methods to:[2] b) Forecast exchange rates using:[2]
i) irredeemable debt i) purchasing power parity
ii) redeemable debt ii) interest rate parity.
iii) convertible debt
iv) preference shares.
c) Describe the causes of interest rate H Employability and technology

fluctuations, including: [2]
i) structure of interest rates and
skills
yield curves
ii) expectations theory
iii) liquidity preference theory
relevant information
iv) market segmentation.
3. Hedging techniques for foreign
currency risk
the workplace
a) Discuss and apply traditional and basic
methods of foreign currency risk
management, including:
i) currency of invoice [1]
ii) netting and matching [2]
iii) leading and lagging [2]
iv) forward exchange contracts [2]
v) money market hedging [2]
vi) asset and liability management.[1]
tools
b) Compare and evaluate traditional
methods of foreign currency risk
management.[2]
c) Identify the main types of foreign

currency derivatives used to hedge
foreign currency risk and explain how
they are used in hedging.[1]
(No numerical questions will be set on

this topic)
4. Hedging techniques for interest rate

risk
a) Discuss and apply traditional and basic

methods of interest rate risk
management, including:
i) matching and smoothing [1]
ii) asset and liability management [1]
iii) forward rate agreements.[2]
b) Identify the main types of interest rate

derivatives used to hedge interest rate
risk and explain how they are used in
hedging.[1]
(No numerical questions will be set on

this topic)

12. Summary of changes to Financial Management (FM)
providers.
Amendments to FM
Section Syllabus content Rationale

and
subject
area
B1d Explain the need for, and the Sustainability issues has been
interaction with, planning and added to iii) reflecting the increasing
decision-making in business importance of this topic.
of:
i) competition
policy [1]
ii) government
assistance for
business [1]
iii) green policies and
sustainability issues [1]
iv) corporate governance
regulation.[2]

Advanced Financial Management (AFM)
Advanced
Financial
Management
(AFM)

examination session

Contents
1.Intellectual levels ................................... 3
2.Learning hours and education
recognition ............................................... 3
3.The structure of ACCA qualification ...... 4
5.Guide to ACCA examination assessment
................................................................ 7
6. Relational diagram linking Advanced
Financial Management (AFM) with other
exams ...................................................... 8
10. The syllabus ..................................... 12
12. Summary of changes to Advanced
Financial Management (AFM) ................ 20

1.Intellectual levels 2.Learning hours and

qualification.
levels:
find themselves.
comprehension
assessed.
each area.
levels.

3.The structure of ACCA qualification

skills, rather than, for example, their ability to

perform simple calculations.
4. Guide to ACCA
examination structure and Strategic Professional
Essentials:
delivery mode Strategic Business Leader is ACCA’s case
study examination at Strategic Professional
The pass mark for all ACCA Qualification and from September 2023 is examined as a
examinations is 50%. closed book exam of 3 hours and 15
minutes, including reading, planning and
The structure and delivery mode of reflection time which can be used flexibly
examinations varies. within the examination.
Applied Knowledge Pre-seen information for the Strategic

The Applied Knowledge examinations Business Leader exam will be released two
contain 100% compulsory questions to weeks before the exam sitting. The pre-seen
encourage students to study across the information contains background and
breadth of each syllabus. These are contextual details in order for students to
assessed by a two-hour computer based familiarise themselves with the fictitious
examination. organisation that they will be examined on
and the industry in which it operates.
Applied Skills
The Corporate and Business Law exam is a The Strategic Business Leader exam will
two-hour computer-based objective test contain new information in the form of
examination for English and Global. exhibits and students are required to
complete several tasks. All questions are
For the format and structure of the compulsory and each examination will
Corporate and Business Law or Taxation contain a total of 80 technical marks and 20
variant exams, refer to the ‘Approach to professional skills marks.
examining the syllabus’ section of the
relevant syllabus and study guide. As this is a closed book exam, the pre-seen
information is also available within the
The other Applied Skills examinations examination.
(PM, TX-UK, FR, AA, and FM) contain a mix
of objective and longer type questions with a Strategic Business Reporting is a three hour
duration of three hours for 100 marks. These 15 minutes exam. It contains two sections
are assessed by a three-hour computer- and all questions are compulsory. This exam
based exam. Prior to the start of each exam contains four professional marks.
there will be time allocated for students to be
informed of the exam instructions. Options:
The Strategic Professional Options are all
The longer (constructed response) question three hours 15 minutes computer-based
types used in the Applied Skills exams exams. All contain two sections and all
(excluding Corporate and Business Law) questions are compulsory.
require students to effectively mimic what
they do in the workplace. Students will need All option exams contain a total of 80
to use a range of digital skills and technical marks and 20 professional skills
demonstrate their ability to use spread marks.
sheets and word processing tools in
producing their answers, just as they would The question types used at Strategic
use these tools in the workplace. These Professional require students to effectively
assessment methods allow ACCA to focus mimic what they would do in the workplace.
on testing students’ technical and application
These exams offer ACCA the opportunity to
focus on the application of knowledge to

scenarios, using a range of tools including

word processor, spreadsheets and
Time management


5.Guide to ACCA



documents.

approved.


list.

6. Relational diagram linking Advanced Financial

Management (AFM) with other exams
Some exams are directly underpinned by other exams such as Advanced Financial
Management with Financial Management. This diagram indicates where students are
The Advanced Financial Management exam builds upon the skills and knowledge examined
in the Financial Management exam. At this stage candidates will be expected to
demonstrate an integrated knowledge of the subject and an ability to relate their technical
understanding of the subject to issues of strategic importance to the organisation. The study
guide specifies the wide range of contextual understanding that is required to achieve a
satisfactory standard at this level.
The examination will also focus on the following professional skills and behaviours:
• Communication
• Analysis and Evaluation
• Scepticism
• Commercial Acumen
Examination Structure
The syllabus is assessed by a three-hour 15 minutes examination.

Section A
Section A will always be a single 50 mark case study. The 50 marks will comprise of 40
technical marks and 10 professional skills marks. All of the professional skills will be
examined in Section A.
Candidates should understand that they will be expected to undertake calculations, draw
comparison against relevant information where appropriate, analyse the results and offer
recommendations or conclusions as required.
Financial managers are required to look across a range of issues which affect an
organisation and its finances, so candidates should expect to see the case study focus on a
range of issues from at least two syllabus sections from A - E. These will vary depending on
the business context of the case study.
Section A questions will ask candidates to produce a response in a specific format, , for
example a report to the Board of Directors.
Section B
Section B will consist of two compulsory 25 mark questions. All section B questions will be
scenario based and contain a combination of calculation and narrative marks. There will not
be any wholly narrative questions. The 25 marks will comprise of 20 technical marks and 5
professional skills marks. Section B questions will contain a combination of professional
skills appropriate to the question. Each question will contain a minimum of two professional
skills from Analysis and Evaluation, Scepticism and Commercial Acumen.
All topics and syllabus sections will be examinable in either section A or section B of the
exam, but every exam will have question(s) which have a focus on syllabus sections B and
E.
Total 100 marks
The aim of the syllabus is to apply relevant knowledge, skills and exercise professional
judgement as expected of a senior financial executive or advisor, in taking or recommending
decisions relating to the financial management of an organisation in private and public
sectors.
This syllabus develops upon the core financial management knowledge and skills covered in
the Financial Management syllabus and prepares candidates to advise management and/or
clients on complex strategic financial management issues facing an organisation.
The syllabus starts by exploring the role and responsibility of a senior executive or advisor in
meeting competing needs of stakeholders within the business environment of multinationals.
The syllabus then re-examines investment and financing decisions, with the emphasis
moving towards the strategic consequences of making such decisions in a domestic, as well
as international, context. Candidates are then expected to develop further advisory skills in
planning strategic acquisitions and mergers and corporate re-organisations.
The next part of the syllabus re-examines, in the broadest sense, the existence of risks in
business and the sophisticated strategies which are employed in order to manage such

risks. It builds on what candidates would have covered in the Financial Management
syllabus.
The professional skills section of the syllabus links to all others and provides a range of
professional skills which the candidate must demonstrate in the exam. These professional
skills will make candidates more employable, or if already in work, will enhance their
opportunities for advancement.
Section G of the syllabus contains outcomes relating to the demonstration of appropriate
digital and employability skills in preparing for and taking the AFM examination. This
includes being able to access and open exhibits, requirements and response options from
different sources and being able to use the relevant functionality and technology to prepare
and present response options in a professional manner. These skills are specifically
developed by practicing and preparing for the AFM exam, using the learning support content
for computer-based exams available via the practice platform and the ACCA website and will

A Explain and evaluate the role and responsibility of the senior financial executive or
advisor in meeting conflicting needs of stakeholders and recognise the role of
international financial institutions in the financial management of multinationals
B Evaluate potential investment decisions and assessing their financial and strategic
consequences, both domestically and internationally
C Assess and plan acquisitions and mergers as an alternative growth strategy
D Evaluate and advise on alternative corporate re-organisation strategies
E Apply and evaluate alternative advanced treasury and risk management

techniques
F Apply a range of professional skills in addressing requirements within the Advanced

Financial Management exam, and in preparation for, or to support, current work
experience
G Apply employability and technology skills

2. Business re-organisation
10. The syllabus
E Treasury and advanced risk
A Role of senior financial adviser in the management techniques
multinational organisation
1. The role of the treasury function in
1. The role and responsibility of senior multinationals
financial executive/advisor
2. The use of financial derivatives to hedge
2. Financial strategy formulation against forex risk
3. Corporate environmental, social, 3. The use of financial derivatives to hedge

governance (ESG) and ethical issues against interest rate risk
4. Management of international trade and F Professional skills

finance
1. Communication
5. Strategic business and financial planning
for multinational organisations
2. Analysis and evaluation
6. Dividend policy in multinationals and
transfer pricing 3. Scepticism
B Advanced investment appraisal

4. Commercial acumen
1. Discounted cash flow techniques
G Employability and technology skills
2. Application of option pricing theory in
investment decisions 1. Use computer technology to efficiently
3. Impact of financing on investment information.
decisions and adjusted present values
4. Valuation and the use of free cash flows using available functions and
5. International investment and financing workplace.
decisions
C Acquisitions and mergers screens to create and amend responses
to exam requirements, using the
1. Acquisitions and mergers versus other appropriate tools.
growth strategies
2. Valuation for acquisitions and mergers using the appropriate tools.
3. Regulatory framework and processes
4. Financing acquisitions and mergers
D Corporate reconstruction and re-

organisation
1. Financial reconstruction

11. Detailed study guide e) Assess the organisation’s exposure to

business and financial risk including
operational, reputational, political,
A Role of the senior financial economic, regulatory and fiscal risk.[3]
adviser in the multinational
organisation f) Develop a framework for risk
management, comparing and contrasting
1. The role and responsibility of senior risk mitigation, hedging and
financial executive/advisor diversification strategies.[3]
a) Develop strategies for the achievement g) Establish capital investment monitoring

of the organisational goals in line with its and risk management systems.[3]
agreed policy framework.[3]
h) Advise on the impact of behavioural
b) Recommend strategies for the finance on financial strategies /
management of the financial resources securities prices and why they may not
of the organisation such that they are follow the conventional financial
utilised in an efficient, effective and theories.[3]
transparent way.[3]
3. Corporate environmental, social,
c) Advise the board of directors or governance (ESG) and ethical issues
management of the organisation in
setting the financial goals of the a) Assess an organisation’s commitment to
business and in its financial policy ESG criteria when undertaking business,
development with particular reference financial and investment decisions, and
to:[3] discuss and recommend how conflicts
i) Investment selection and capital between the criteria may be resolved..[3]
resource allocation
ii) Minimising the cost of capital b) Assess the impact on the physical
iii) Distribution and retention policy environment and the sustainability of
iv) Communicating financial policy natural resources arising from alternative
and corporate goals to internal organisational business, financial and
and external stakeholders investment decisions..[3]
v) Financial planning and control
vi) The management of risk. c) Examine how the organisation manages
its stakeholder groups as part of its
2. Financial strategy formulation social responsibilities.[3]
a) Assess organisational performance d) Assess and advise on the impact of

using methods such as ratios and investment and financing strategies and
trends.[3] decisions on the organisation’s
stakeholders.[3]
b) Recommend the optimum capital mix
and structure within a specified business e) Explore the areas within the ethical and
context and capital asset structure.[3] governance framework of the
organisation which may be undermined
c) Recommend appropriate distribution and by agency issues and/or stakeholder
retention policy.[3] conflicts and establish strategies for
dealing with them.[3]
d) Explain the theoretical and practical
rationale for the management of f) Recommend appropriate strategies for
risk.[3] the resolution of stakeholder conflict in

specific situations and advise on crisis; growth and impact of dark pool
alternative approaches that may be trading systems; the removal of barriers
adopted.[3] to the free movement of capital; and the
international regulations on money
g) Assess the impact of ethical and laundering.[2]
governance issues on the financial
management of the organisation.[3] g) Demonstrate an awareness of new
developments in the macroeconomic
h) Recommend an ethical and governance environment, assessing their impact
framework for the development of an upon the organisation, and advising on
organisation’s financial management the appropriate response to those
policies, which is grounded in the highest developments both internally and
standards of probity and is fully aligned externally.[2]
with the ethical principles of the
Association.[3] 5. Strategic business and financial
planning for multinationals
4. Management of international trade
and finance a) Advise on the development of a financial
planning framework for a multinational
a) Advise on the theory and practice of free organisation taking into account:[3]
trade and the management of barriers to i) Compliance with national regulatory
trade.[3] requirements (for example the
London Stock Exchange admission
b) Demonstrate an up to date requirements)
understanding of the major trade ii) The mobility of capital across borders
agreements and common markets and, and national limitations on
on the basis of contemporary remittances and transfer pricing
circumstances, advise on their policies iii) The pattern of economic and other
and strategic implications for a given risk exposures in the different
business.[3] national markets
iv) Agency issues in the central
c) Discuss how the actions of the World coordination of overseas operations
Trade Organisation, the International and the balancing of local financial
Monetary Fund, The World Bank and autonomy with effective central
Central Banks can affect a multinational control.
organisation.[2]
6. Dividend policy in multinationals and
d) Discuss the role of international financial transfer pricing
institutions within the context of a
globalised economy, with particular a) Determine a corporation’s dividend
attention to (the Fed, Bank of England, capacity and its policy given:[3]
European Central Bank and the Bank of i) The corporation’s short- and long-
Japan).[2] term reinvestment strategy
ii) The impact of capital reconstruction
e) Discuss the role of the international programmes such as share
financial markets with respect to the repurchase agreements and new
management of global debt, the financial capital issues on free cash flow to
development of the emerging economies equity.
and the maintenance of global financial iii) The availability and timing of central
stability.[2] remittances
iv) The corporate tax regime within
f) Discuss the significance to the the host jurisdiction.
organisation, of latest developments in v) The organisational policy on the
the world financial markets such as the transfer pricing of goods and
causes and impact of the recent financial services across international borders.

2. Application of option pricing theory in

b) Advise, in the context of a specified investment decisions
capital investment programme, on an
organisation’s current and projected a) Apply the Black-Scholes Option Pricing
dividend capacity.[3] (BSOP) model to financial product
valuation and to asset valuation:[3]
i) Determine and discuss, using
B Advanced investment published data, the five principal
appraisal drivers of option value (value of
the underlying, exercise price,
1. Discounted cash flow techniques time to expiry, volatility and the
risk-free rate)
a) Evaluate the potential value added to an ii) Discuss the underlying
organisation arising from a specified assumptions, structure,
capital investment project or portfolio application and limitations of the
using the net present value (NPV) BSOP model.
model.[3]
Project modelling should include explicit b) Evaluate embedded real options within a
treatment and discussion of: project, classifying them into one of the
i) Inflation and specific price real option archetypes.[3]
variation
ii) Taxation including tax allowable c) Assess, calculate and advise on the
depreciation and tax exhaustion value of options to delay, expand,
iii) Capital rationing. Multi-period redeploy and withdraw using the BSOP
capital rationing limited to discussion model.[3]
only
iv) Probability analysis and
3. Impact of financing on investment
sensitivity analysis when
decisions and adjusted present
adjusting for risk and uncertainty
values
in investment appraisal
v) Risk adjusted discount rates
a) Identify and assess the appropriateness
vi) Project duration as a measure of
of the range of sources of finance
risk.
available to an organisation including
equity, debt, hybrids, lease finance,
b) Outline the application of Monte Carlo
venture capital, business angel finance,
simulation to investment appraisal.[2]
private equity, asset securitisation and
Candidates will not be expected to
sale, Islamic finance and security token
undertake simulations in an examination
offerings. Including assessment on the
context but will be expected to
financial position, financial risk and the
demonstrate an understanding of:
value of an organisation.[3]
i) The significance of the
simulation output and the
b) Discuss the role of, and developments
assessment of the likelihood of
in, Islamic financing as a growing
project success
source of finance for organisations;
ii) The measurement and
explaining the rationale for its use, and
interpretation of project value at
identifying its benefits and
risk.
deficiencies.[2]
c) Establish the potential economic return
c) Discuss the role of green finance for
(using internal rate of return (IRR) and
organisations pursuing an
modified internal rate of return) and
environmental/sustainable agenda.[2]
advise on a project’s return margin.
Discuss the relative merits of NPV and
IRR.[3]

d) Calculate the cost of capital of an

organisation, including the cost of equity k) Assess the impact of a significant capital
and cost of debt, based on the range of investment project upon the reported
equity and debt sources of finance. financial position and performance of
Discuss the appropriateness of using the organisation taking into account
the cost of capital to establish project alternative financing strategies.[3]
and organisational value, and discuss
its relationship to such value.[3] 4. Valuation and the use of free cash
flows
e) Calculate and evaluate project specific
cost of equity and cost of capital, a) Apply asset based, income based and
including their impact on the overall cost cash flow based models to value equity.
of capital of an organisation. Apply appropriate models, including term
Demonstrate detailed knowledge of structure of interest rates, the yield curve
business and financial risk, the capital and credit spreads, to value corporate
asset pricing model and the relationship debt.[3]
between equity and asset betas.[3]
b) Forecast an organisation’s free cash flow
f) Assess an organisation’s debt exposure and its free cash flow to equity (pre and
to interest rate changes using the post capital reinvestment).[3]
simple Macaulay duration and modified
duration methods.[3] c) Advise on the value of an organisation
using its free cash flow and free cash
g) Discuss the benefits and limitations of flow to equity under alternative horizon
duration including the impact of and growth assumptions.[3]
convexity.[3]
d) Explain the role of option pricing models,
h) Assess the organisation’s exposure to such as the BSOP model, in the
credit risk, including:[3] assessment of the value of equity, the
i) Explain the role of, and the value of debt and of default risk.[2]
risk assessment models used
by the principal rating
agencies 5. International investment and
ii) Estimate the likely credit spread over financing decisions
risk free
iii) Estimate the organisation’s current a) Assess the impact upon the value of a
cost of debt capital using the project of alternative exchange rate
appropriate term structure of interest assumptions.[3]
rates and the credit spread.
b) Forecast project or organisation free
i) Assess the impact of financing and cash flows in any specified currency and
capital structure upon the organisation determine the project’s net present value
with respect to:[3] or organisation value under differing
i) Modigliani and Miller propositions, exchange rate, fiscal and transaction
before and after tax cost assumptions.[2]
ii) Static trade-off theory
iii) Pecking order propositions c) Evaluate the significance of exchange
iv) Agency effects. controls for a given investment decision
and strategies for dealing with restricted
j) Apply the adjusted present value remittance.[3]
technique to the appraisal of investment
decisions that entail significant
alterations in the financial structure of d) Assess and advise on the costs and
the organisation, including their fiscal benefits of alternative sources of finance
and transactions cost implications.[3]

available within the international equity iii) Cash flow models, including free
and bond markets.[3] cash flows.
Taking into account the changes in the
risk profile and risk exposure of the
acquirer and the target entities
C Acquisitions and mergers
c) Apply appropriate methods, such as:
1. Acquisitions and mergers versus risk-adjusted cost of capital, adjusted net
other growth strategies present values and changing price-
earnings multipliers resulting from the
a) Discuss the arguments for and against acquisition or merger, to the valuation
the use of acquisitions and mergers as a process where appropriate.[3]
method of corporate expansion.[2]
d) Demonstrate an understanding of the
b) Evaluate the corporate and competitive procedure for valuing high growth start-
nature of a given acquisition proposal.[3] ups and loss making companies.[2]
c) Advise upon the criteria for choosing an 3. Regulatory framework and processes
appropriate target for acquisition.[3]
a) Demonstrate an understanding of the
d) Discuss the reasons for the frequent principal factors influencing the
failure of acquisitions to enhance development of the regulatory framework
shareholder value as expected, including for mergers and acquisitions globally
the problem of overvaluation.[3] and, in particular, be able to compare
and contrast the shareholder versus the
e) Evaluate, from a given context, the stakeholder models of regulation.[2]
potential for synergy separately
classified as:[3] b) Identify the main regulatory issues which
i) Revenue synergy are likely to arise in the context of a
ii) Cost synergy given offer and
iii) Financial synergy. i) assess whether the offer is likely
to be in the shareholders’ best
f) Evaluate the use of alternative methods interests
as a way of obtaining a stock market ii) advise the directors of a target
listing; including special purpose entity on the most appropriate
acquisition companies (SPACs), direct defence if a specific offer is to be
listings, dutch auctions and reverse treated as hostile.[3]
takeovers.[3]
4. Financing acquisitions and mergers
2. Valuation for acquisitions and
mergers a) Compare the various sources of
financing available for a proposed cash-
based acquisition.[3]
a) Estimate the potential near-term and
continuing growth levels of a b) Evaluate the advantages and
corporation’s earnings using both disadvantages of a financial offer for a
internal and external measures.[3] given acquisition proposal using pure or
mixed mode financing and recommend
b) Discuss, assess and advise on the value the most appropriate offer to be made.[3]
created from an acquisition or merger of
both quoted and unquoted entities using c) Assess the impact of a given financial
models such as:[3] offer on the reported financial position
i) ’Book value-plus’ models and performance of the acquirer.[3]
ii) Market based models

D Corporate reconstruction and iii) The source of basis risk and how
re-organisation it can be minimised.
iv) Risks such as delta, gamma and
1. Financial reconstruction theta, and how these can be
managed.
a) Assess an organisational situation
and determine whether a financial 2. The use of financial derivatives to
reconstruction is an appropriate hedge against forex risk
strategy for a given business
situation.[3] a) Assess the impact on an organisation to
exposure in translation, transaction and
b) Assess the likely response of the economic risks and how these can be
capital market and/or individual managed.[3]
suppliers of capital to any
reconstruction scheme and the impact b) Evaluate, for a given hedging
their response is likely to have upon the requirement, which of the following is the
value of the organisation.[3] most appropriate strategy, given the
nature of the underlying position and the
2. Business re-organisation risk exposure:[3]
i) The use of the forward exchange
a) Recommend, with reasons, strategies for market and the creation of a money
unbundling parts of a quoted company.[3] market hedge
ii) Synthetic foreign exchange
b) Evaluate the likely financial and other agreements (SAFEs)
benefits of unbundling.[3] iii) Exchange-traded currency futures
contracts
c) Advise on the financial issues relating to iv) Currency swaps
a management buy-out and buy-in.[3] v) FOREX swaps
vi) Currency options.
E Treasury and advanced risk
c) Advise on the use of bilateral and
management techniques multilateral netting and matching as tools
for minimising FOREX transactions costs
1. The role of the treasury function in and the management of market barriers
multinationals to the free movement of capital and
other remittances.[3]
a) Discuss the role of the treasury
management function within:[3] 3. The use of financial derivatives to
i) The short term management of hedge against interest rate risk
the organisation’s financial
resources a) Evaluate, for a given hedging
ii) The longer term maximisation of requirement, which of the following is the
corporate value most appropriate given the nature of the
iii) The management of risk underlying position and the risk
exposure. exposure:[3]
i) Forward Rate Agreements (FRAs)
b) Discuss the operations of the derivatives ii) Interest rate futures
market, including:[3] iii) Interest rate swaps
i) The relative advantages and iv) Interest rate options (including
disadvantages of exchange traded collars).
versus OTC agreements
ii) Key features, such as standard
contracts, tick sizes, margin
requirements and margin trading

F Professional skills of an enquiring mind, beyond what is

immediately apparent.[3]
1. Communication
b) Question opinions, assertions and
a) Inform concisely, objectively and assumptions, by seeking
unambiguously, adopting a suitable justifications and obtaining sufficient
style and format, using appropriate evidence for either their support and
technology.[3] acceptance or rejection.[3]
b) Persuade using compelling and c) Challenge and critically assess the

logical arguments, demonstrating the information presented or decisions
ability to counter argue where made, where this is clearly justified,
appropriate.[3] in the wider professional, ethical,
organisational, or public interest.[3]
c) Clarify and simplify complex issues
to convey relevant information in a 3. Commercial acumen
way that adopts an appropriate tone
and is easily understood by and a) Demonstrate awareness of
reflects the requirements of the organisational and external factors,
intended audience.[3] which will affect the financial
management decisions of an
2. Analysis and evaluation organisation.[3]
a) Investigate relevant information from b) Recognise key issues in a given

a range of sources, using appropriate scenario and use judgement in
analytical techniques to estimate proposing and recommending
outcomes, assist in decision-making commercially viable solutions.[3]
and to identify opportunities or
solutions.[3] c) Show insight and perception in
understanding financial issues and
b) Consider information, evidence and wider organisational matters,
findings carefully, reflecting on their demonstrating acumen in arriving at
implications and how they can be appropriate recommendations.[3]
used in the interests of the wider
organisational goals.[3] G Employability and technology
c) Assess and apply appropriate
skills
judgement when considering
organisational issues, problems or 1. Use computer technology to
when making financial management efficiently access and manipulate
decisions; taking into account the relevant information
implications of such decisions on the
organisation and those affected.[3] 2. Work on relevant response options,
d) Appraise information objectively with technology, as would be required in
a view to balancing the costs, risks, the workplace
benefits and opportunities, before
recommending appropriate solutions 3. Navigate windows and computer
or decisions.[3] screens to create and amend
3. Scepticism using the appropriate tools
a) Explore the underlying reasons for a 4. Present data and information

given situation, applying the attitude effectively, using the appropriate
tools

12. Summary of changes to Advanced Financial

Management (AFM)
providers.
The main changes which have been made to the syllabus are summarised in the table
below.
Table of amendments
A3 Corporate environmental, Section has been reviewed and
social, governance (ESG) amended to incorporate ESG.
and ethical issues
B3c) Discuss the role of green New outcome added reflecting
finance for organisations increased importance of green
pursuing an finance.
environmental/sustainable
agenda
B5 International investment Old outcome B5d deleted and
and financing decisions other outcomes renumbered.
C1d) Discuss the reasons for the Outcome reworded to include
frequent failure of the previous learning outcome
acquisitions to enhance C2a)
shareholder value as
expected, including the
problem of overvaluation
C1f) Evaluate the use of Outcome has been expanded to
alternative methods as a include more alternative
way of obtaining a stock methods which reflect recent
market listing; including trends.
special purpose acquisition
companies (SPACs), direct
listings, dutch auctions and
reverse takeovers
C2 Valuation for acquisitions Old outcome C2a deleted and

and mergers other outcomes renumbered.

C2d) Demonstrate an Outcome expanded to include

understanding of the lossmaking companies which
procedure for valuing are not also start-ups.
high growth start-ups
and loss making
companies

Management Accounting (MA/FMA)
Management
Accounting
(MA/FMA)
September 2023 to August 2024*

examination session
*Please note, any candidate sitting an exam on or before

12:00 GMT on Monday 18 September 2023 will be examined
under the 2022/23 syllabus. After this date, exams will next be
available to sit from 12:00 GMT on Wednesday 20 September
2023. Any candidate sitting an exam from this date onwards
will be examined under the 2023/24 syllabus.

Contents
1. Intellectual levels ..................................... 3
recognition…………………………………… 3
3. Qualification structure ............................. 3
delivery mode ............................................. 4
5. Guide to ACCA examination assessment 4
6. Relational diagram linking Management
Accounting (MA/FMA) with other exams ..... 5
7. Approach to examining the syllabus ........ 5
8. Overall aim of the syllabus ...................... 5
9. Introduction to the syllabus...................... 6
10. Main capabilities ................................... 6
11. The syllabus .......................................... 7
12. Detailed study guide.............................. 8
13. Summary of changes to Management
Accounting (MA/FMA) ............................... 15

2. Learning hours and

1. Intellectual levels education recognition
ACCA qualifications are designed to As a member of the International Federation
progressively broaden and deepen the of Accountants, ACCA seeks to enhance the
knowledge and skills demonstrated by the education recognition of its qualification on
student at a range of levels on their way both national and international education
through each qualification. frameworks, and with educational authorities
Throughout, the study guides assess both aims to ensure that its qualifications are
knowledge and skills. Therefore, a clear recognised and valued by governments and
distinction is drawn, within each subject regulatory authorities and employers across
area, between assessing knowledge and all sectors. To this end, ACCA qualifications
skills and in assessing their application are currently recognised on the educational
within an accounting or business context. frameworks in several countries. Please
The assessment of knowledge is denoted by refer to your national education framework
a superscript K and the assessment of skills regulator for further information about
is denoted by the superscript S. recognition.
3. Qualification structure
The qualification structure requires candidates who wish to be awarded the ACCA Diploma
in Accounting and Business (RQF Level 4) to pass the Business and Technology (BT)/FBT,
Management Accounting (MA)/FMA and the Financial Accounting (FA)/FFA examinations
and successfully complete the Foundations in Professionalism (FiP) module.

5. Guide to ACCA
4. Guide to ACCA
examination structure
and delivery mode ACCA reserves the right to examine
anything contained within any study guide
The Foundations examinations contain within any examination session. This
100% compulsory questions to encourage includes knowledge, techniques, principles,
candidates to study across the breadth of theories, and concepts as specified.
each syllabus.
For specified financial accounting, audit and
All Foundations examinations are assessed tax examinations, except where indicated
by two-hour computer-based examinations. otherwise, ACCA will publish examinable
documents once a year to indicate exactly
The pass mark for all FIA examinations is
50%. what regulations and legislation could
potentially be assessed within identified
examination sessions.
For this examination, regulation issued or

legislation passed on or before 31 August
annually, will be assessed from when the
new syllabus commences in September of
the following year. Please refer to the
examinable documents for the exam (where
relevant) for further information.
Regulation issued or legislation passed in

the future. The terms ‘issued’ or ‘passed’
relate to when regulation or legislation has
been formally approved.


list.

6. Relational diagram linking Management Accounting

(MA/FMA) with other exams
The Foundations in Accountancy suite of qualifications is designed so that a student can

progress through three discrete levels; RQF Level 2, 3, and 4. Students are recommended
to enter Foundations in Accountancy at the level which is most appropriate to their needs
and to take examinations in order, but this is not a mandatory requirement.
The syllabus is assessed by two-hour computer-based examination. Questions will assess

all parts of the syllabus and will test knowledge and some comprehension or application of
this knowledge. The examination will consist of two sections. Section A will contain 35 two-
mark objective test questions (OTs). Section B will contain 3 ten-mark multi-task questions
(MTQs) each of which will examine Budgeting, Standard costing and Performance
measurement sections of the syllabus.
Note: Budgeting MTQs in Section B can also include tasks from B2 Analytical techniques in
budgeting and forecasting. B4 Spreadsheets could be included in any of the MTQs, as either
the basis for presenting information in the question scenario or as a task within the MTQ.
8. Overall aim of the syllabus
To develop knowledge and understanding of management accounting techniques to support

management in planning, controlling and monitoring performance in a variety of business
contexts.

The syllabus for Management Accounting (MA)/FMA, introduces candidates to elements of

management accounting which are used to make and support decisions.
The syllabus starts by introducing the nature, the source and purpose of management
information followed by the statistical techniques used to analyse data. Then the syllabus
addresses cost accounting and the costing techniques used in business which are essential
for any management accountant.
The syllabus then looks at the preparation and use of budgeting and standard costing and
variance analysis as essential tools for planning and controlling business activities. The
syllabus concludes with an introduction to measuring and monitoring the performance of an
organisation.
A Explain the nature, source and purpose of management information

B Explain and apply data analysis and statistical techniques
C Explain and apply cost accounting techniques
D Prepare budgets for planning and control
E Compare actual costs with standard costs and analyse any variances
F Explain and apply performance measurements and monitor business performance.
Relational diagram of main capabilities:

11. The syllabus E Standard costing
A The nature, source and purpose of 1 Standard costing system

management information
2. Variance calculations and analysis
1. Accounting for management
3. Reconciliation of budgeted and actual
2. Sources of data profit
3. Cost classification F Performance measurement
4. Presenting information 1. Performance measurement - overview
B Data analysis and statistical 2 Performance measurement - application

techniques
3 Cost reductions and value enhancement
1. Sampling methods
4. Monitoring performance and reporting
2. Analytical techniques in budgeting and
forecasting
3. Summarising and analysing data
4. Spreadsheets
C Cost accounting techniques.
1. Accounting for material, labour and

overheads
2. Absorption and marginal costing
3. Cost accounting methods
4. Alternative cost accounting principles
D Budgeting
1. Nature and purpose of budgeting
2. Budget preparation
3. Flexible budgets
4. Asset budgeting and investment

appraisal
5. Budgetary control and reporting
6. Behavioural aspects of budgeting

12. Detailed study guide 3. Cost classification
a) Explain and illustrate production and

A The nature, source and non-production costs.[K]
purpose of management
information b) Describe the different elements of non-
production costs - administrative,
1. Accounting for management selling, distribution and finance.[K]
a) Describe the purpose and role of cost c) Describe the different elements of
and management accounting within an production costs - materials, labour and
organisation.[K] overheads.[K]
b) Compare and contrast financial d) Explain the importance of the distinction

accounting with cost and management between production and non-production
accounting.[K] costs when valuing output and
inventories.[K]
c) Outline the managerial processes of
planning, decision-making and control.[K] e) Explain and illustrate with examples
classifications used in the analysis of
d) Explain the difference between product/service costs including by
strategic, tactical and operational function, direct and indirect, fixed and
planning.[K] variable, stepped fixed and semi
variable costs.[S]
e) Distinguish between data and
information.[K] f) Explain and illustrate the use of codes in
categorising transactions.[K]
f) Identify and explain the attributes of
good information.[K] g) Identify and interpret graphical
representations of different types of cost
g) Explain the limitations of management behaviour.[S]
information in providing guidance for
managerial decision-making.[K] h) Explain and illustrate the concept of cost
objects, cost units and cost centres.[S]
2. Sources of data
i) Distinguish between cost, profit,
a) Describe the three main data sources: investment and revenue centres.[K]
machine/sensor, transactional and
human/social.[K] j) Describe the differing needs for
information of cost, profit, investment
b) Describe sources of information from and revenue centre managers.[K]
within and outside the organisation
(including government statistics, 4. Presenting information
financial press, professional or trade
associations, quotations and price a) Prepare written reports representing
lists).[K] management information in suitable
formats according to purpose.[S]
c) Explain the uses and limitations of
published information/data (including b) Use data visualisation to present
information from the internet).[K] information using tables, charts and
graphs (bar charts, line graphs, pie
d) Identify the direct and indirect data charts and scatter graphs).[S]
capture costs of management
accounting information.[K]

c) Interpret information (including tables, price movements.[S]

charts and graphs) presented in
management reports.[S] h) Explain the advantages and
disadvantages of linear regression
analysis.[K]
B Data analysis and statistical
techniques i) Explain the principles of time series
analysis (cyclical, trend, seasonal
1. Sampling methods variation and random elements).[K]
a) Explain sampling techniques (random, j) Calculate moving averages.[S]

systematic, stratified, multistage, cluster
and quota).[K] k) Calculate the trend, including the use of
regression coefficients.[S]
b) Choose an appropriate sampling
method in a specific situation.[S] l) Use trend and seasonal variation
(Note: Derivation of random samples will (additive and multiplicative) to make
not be examined) budget forecasts.[S]
2. Analytical techniques in budgeting m) Explain the advantages and

and forecasting disadvantages of time series analysis.[K]
a) Explain the structure of linear functions n) Explain the purpose of index numbers.[K]
and equations.[S]
o) Calculate simple and multi-item
b) Use the high low method to separate (weighted) index numbers for one or
the fixed and variable elements of total more variables, including Laspeyre and
costs including situations involving semi Paasche indices.[S]
variable and stepped fixed costs and
changes in the variable cost per unit.[S] p) Describe the product life cycle and
explain its importance in forecasting.[K]
c) Explain the advantages and
disadvantages of using the high low 3. Summarising and analysing data
method to estimate the fixed and
variable elements of costing.[K] a) Describe the five characteristics of big
data (volume, variety, velocity, value
d) Construct scatter diagrams and lines of and veracity).[K]
best fit.[S]
b Explain the three types of big data:
e) Analysis of cost data. structured, semi-structured and
(i) Explain the concepts of correlation unstructured.[K]
coefficient and coefficient of
determination.[K] c) Describe the main uses of big data and
(ii) Calculate and interpret the data analytics for organisations.[K]
correlation coefficient and the
coefficient of determination.[S] d) Describe the two types of data:
(iii) Establish a linear function using categorical (nominal and ordinal) and
regression analysis and interpret the numerical (continuous and discrete). [S]
results.[S]
e) Explain the terms descriptive analysis
f) Use linear regression coefficients to and inferential analysis. [K]
make forecasts of costs and revenues.[S]
g) Adjust historical and forecast data for

f) Calculate the mean, mode and median (vii) Produce calculations to minimise
for ungrouped data and the mean for inventory costs when inventory is
grouped data. [S] gradually replenished.[S]
(viii) Describe and apply appropriate
g) Calculate measures of dispersion methods for establishing reorder
including the variance, standard levels where demand in the lead
deviation and coefficient of variation time is constant.[S]
both grouped and ungrouped data.[S] (ix) Calculate the value of closing
h) Calculate expected values for use in inventory and material issues using
decision making.[S] LIFO, FIFO and average
methods.[S]
i) Explain the properties of a normal (x) Explain Just in Time (JIT) as an
distribution.[S] inventory management approach.[K]
j) Interpret normal distribution graphs and
tables.[S] b) Accounting for labour
(i) Calculate direct and indirect costs
4. Spreadsheets of labour.[S]
(ii) Explain the systems used to
a) Explain the role and features of a capture and record labour effort.[K]
computer spreadsheet system.[K] (iii) Prepare the journal and ledger
entries to record labour cost inputs
b) Identify applications for computer and outputs.[S]
spreadsheets and their use in data (iv) Describe different remuneration
analysis, cost and management
methods: time-based systems,
accounting.[S]
piecework systems and individual
and group incentive schemes.[K]
(v) Calculate the level and analyse the
C Cost accounting techniques costs and causes of labour
turnover.[S]
1. Accounting for material, labour and
(vi) Explain and calculate labour
overheads
efficiency, capacity and production
volume ratios.[S]
a) Accounting for materials
(vii) Interpret the entries in the labour
(i) Describe the systems necessary for
account.[S]
the ordering, receiving and issuing
of materials from inventory.[K]
c) Accounting for overheads
(ii) Describe the control procedures
(i) Explain the different treatment of
used to monitor physical and ‘book’
direct and indirect expenses.[K]
inventory and to minimise
(ii) Describe the procedures involved in
discrepancies and losses.[K]
determining production overhead
(iii) Interpret the entries and balances in
absorption rates.[K]
the material inventory account.[S]
(iii) Allocate and apportion production
(iv) Identify, explain and calculate the
overheads to cost centres using an
costs of ordering and holding
appropriate basis.[S]
inventory (including buffer
(iv) Reapportion service cost centre
inventory).[S]
costs to production cost centres
(v) Calculate and interpret optimal
(including using the reciprocal
reorder quantities.[S]
method where service cost centres
(vi) Calculate and interpret optimal
work for each other).[S]
reorder quantities when discounts
(v) Select, apply and discuss
apply.[S]
appropriate bases for absorption
rates.[S]

(vi) Prepare journal and ledger entries (vi) Evaluate the benefit of further
for manufacturing overheads processing.[S]
incurred and absorbed.[S]
(vii) Calculate and explain the under c) Service/operation costing
and over absorption of overheads.[S]
(i) Define the characteristics of service
2. Absorption and marginal costing organisations.[K]
(ii) Identify situations where the use of
a) Explain the importance of, and apply, the service/operation costing is
concept of contribution.[S] appropriate.[K]
(iii) Illustrate suitable unit cost measures
b) Demonstrate and discuss the effect of that may be used in different
absorption and marginal costing on service/operation situations.[S]
inventory valuation and profit (iv) Carry out service cost analysis in
determination.[S] simple service industry situations.[S]
c) Calculate profit or loss under absorption 4 Alternative cost accounting

and marginal costing.[S] principles
d) Reconcile the profits or losses calculated a) Explain activity-based costing (ABC),

under absorption and marginal costing.[S] target costing and life-cycle costing as
alternative cost management
e) Describe the advantages and techniques.[K]
disadvantages of absorption and
marginal costing.[K] b) Differentiate ABC, target costing and life
cycle costing from the traditional costing
3. Cost accounting methods techniques (note: calculations are not
required).[K]
a) Job and batch costing:
(i) Describe the characteristics of job
and batch costing.[K] D Budgeting
(ii) Describe the situations where the
use of job or batch costing would be 1. Nature and purpose of budgeting
appropriate.[K]
(iii) Prepare cost records and accounts in a) Explain why organisations use
job and batch costing situations.[S] budgeting.[K]
(iv) Establish job and batch costs from
given information.[S] b) Describe the planning and control cycle
in an organisation.[K]
b) Process costing
(i) Describe the characteristics of c) Explain the administrative procedures
process costing.[K] used in the budgeting process.[K]
(ii) Describe the situations where the
use of process costing would be d) Describe the stages in the budgeting
appropriate.[S] process (including sources of relevant
(iii) Explain the concepts of normal and data, planning and agreeing draft
abnormal losses and abnormal budgets and purpose of forecasts and
gains.[K] how they link to budgeting).[K]
(iv) Distinguish between by-products and
joint products.[K] 2. Budget preparation
(v) Value by-products and joint products
at the point of separation.[S] a) Explain the importance of the principal
budget factor in constructing a budget.[K]

b) Prepare sales budgets.[S] and between nominal and effective

interest rates.[S]
c) Prepare functional budgets (production,
raw materials usage and purchases, e) Explain and illustrate compounding and
labour, variable and fixed overheads).[S] discounting.[S]
d) Prepare cash budgets.[S] f) Explain the distinction between cash

flow and profit and the relevance of cash
e) Prepare master budgets (statement of flow to investment appraisal.[K]
profit or loss and statement of financial
position).[S] g) Identify and evaluate relevant cash
flows for individual investment
f) Explain and illustrate ‘what if’ analysis decisions.[S]
and scenario planning.[S]
h) Explain and illustrate the net present
g) Describe the impact of the general value (NPV) and internal rate of return
economic environment on costs/revenue (IRR) methods of discounted cash
in budgeting. [K] flow.[S]
h) Explain the importance of considering i) Calculate present value using annuity

sustainability in budget preparation. [K] and perpetuity formulae.[S]
3. Flexible budgets j) Calculate NPV, IRR and payback

(discounted and non-discounted).[S]
a) Explain the importance of flexible
budgets in control.[K] k) Interpret the results of NPV, IRR and
payback calculations of investment
b) Explain the disadvantages of fixed viability.[S]
budgets in control.[K]
5. Budgetary control and reporting
c) Identify situations where fixed or flexible
budgetary control would be a) Calculate simple variances between
appropriate.[S] flexed budget, fixed budget and actual
sales, costs and profits.[S]
d) Flex a budget to a given level of
volume.[S] b) Discuss the relative significance of
variances.[K]
4. Asset budgeting and investment
appraisal c) Explain potential action to eliminate
variances.[K]
a) Discuss the importance of investment
planning and control.[K] d) Define the concept of responsibility
accounting and its significance in
b) Define and distinguish between asset control.[K]
and expense items.[K]
e) Explain the concept of controllable and
c) Outline the issues to consider and the uncontrollable costs.[K]
steps involved in the preparation of an
asset expenditure budget.[K] f) Prepare control reports suitable for
presentation to management (to include
d) Explain and illustrate the difference recommendation of appropriate control
between simple and compound interest, action).[S]

6. Behavioural aspects of budgeting e) Calculate fixed overhead total,

expenditure and, where appropriate,
a) Explain the importance of motivation in volume, capacity and efficiency
performance management.[K] variance.[S]
b) Identify factors in a budgetary planning f) Interpret the variances.[S]

and control system that influence
motivation.[S] g) Explain factors to consider before
investigating variances, explain possible
c) Explain the impact of targets on causes of the variances and
motivation.[K] recommend control action.[S]
d) Discuss managerial incentive h) Explain the interrelationships between

schemes.[K] the variances.[K]
e) Discuss the advantages and i) Calculate actual or standard figures

disadvantages of a participative where the variances are given.[K]
approach to budgeting.[K]
3 Reconciliation of budgeted and
f) Explain top down and bottom up actual profit
approaches to budgeting.[K]
a) Reconcile budgeted profit with actual
profit under standard absorption
E Standard costing costing.[S]
1. Standard costing b) Reconcile budgeted profit or contribution

with actual profit or contribution under
a) Explain the purpose and principles of standard marginal costing.[S]
standard costing.[K]
b) Explain and illustrate the difference F Performance measurement

between standard, marginal and
absorption costing.[K] 1. Performance measurement -
overview
c) Establish the standard cost per unit
under absorption and marginal a) Discuss the purpose of mission
costing.[S] statements and their role in performance
measurement.[K]
2 Variance calculations and analysis
b) Discuss the purpose of strategic,
a) Calculate sales price and volume operational and tactical objectives and
variance.[S] their role in performance
measurement.[K]
b) Calculate materials total, price and
usage variance.[S] c) Discuss the impact of economic and
market conditions on performance
c) Calculate labour total, rate and measurement.[K]
efficiency variance.[S]
d) Explain the impact of government
d) Calculate variable overhead total, regulation on performance
expenditure and efficiency variance.[S] measurement.[K]
e) Explain the impact of sustainability on

performance measurement.[K]

2 Performance measurement - f) Quality

application (i) distinguish performance
measurement issues in service and
a) Discuss and calculate measures of manufacturing industries.[K]
financial performance (profitability, (ii) describe performance measures
liquidity, efficiency and gearing) and appropriate for service industries.[K]
non-financial measures.[S] (iii) Explain total quality management
(TQM) as a quality management
b) Perspectives of the Balanced Scorecard technique.[K]
(i) discuss the advantages and
limitations of the balanced 3. Cost reductions and value
scorecard.[K] enhancement
(ii) describe performance indicators for
financial, customer, internal business a) Compare cost control and cost
process and innovation and reduction.[K]
learning.[K]
(iii) discuss critical success factors and b) Describe and evaluate cost reduction
key performance indicators and their methods.[S]
link to objectives and mission
statements.[K] c) Describe and evaluate value analysis.[S]
(iv) establish critical success factors and
key performance indicators in a 4 Monitoring performance and
specific situation.[S] reporting
c) Economy, efficiency and effectiveness a) Discuss the importance of non-financial

(i) explain the concepts of economy, performance measures.[K]
efficiency and effectiveness.[K]
(ii) describe performance indicators for b) Discuss the relationship between short-
economy, efficiency and term and long-term performance.[K]
effectiveness.[K]
(iii) establish performance indicators for c) Discuss the measurement of
economy, efficiency and performance in service industry
effectiveness in a specific situation.[S] situations.[K]
(iv) discuss the meaning of each of the
efficiency, capacity and activity d) Discuss the measurement of
ratios.[K] performance in non-profit seeking and
public sector organisations.[K]
(v) calculate the efficiency, capacity and
activity ratios in a specific situation.[S]
e) Discuss measures that may be used to
assess managerial performance and the
d) Resource utilisation
practical problems involved.[K]
(i) describe measures of performance
utilisation in service and
f) Discuss the role of benchmarking in
manufacturing environments.[K] performance measurement.[K]
(ii) establish measures of resource
utilisation in a specific situation.[S] g) Produce reports highlighting key areas
for management attention and
e) Profitability recommendations for improvement.[S]
(i) calculate return on investment and
residual income.[S]
(ii) explain the advantages and
limitations of return on investment
and residual income.[K]

13.Summary of changes to Management Accounting

(MA/FMA)
ACCA periodically reviews it qualification syllabuses so that they fully meet the needs of
providers.
The main areas of change to the MA/FMA syllabus are summarised in the table below.
Section and subject area Syllabus content

A2 Sources of data A2d replaced with new learning
outcome covering direct and
indirect data capture costs
A3 Cost classification A3g reworded
A4 Presenting information A4b reworded to include data

visualisation
A4c reworded
B2 Forecasting techniques Heading changed to Analytical
techniques in budgeting and
forecasting
C1 Accounting for material, labour and C1a(i) and C1b(ii) have been
overheads reworded to recognise the move
away from manual systems
towards the assumption of
computerised systems.
C1a(x) new learning outcome
covering Just in Time (JIT)
C3 Cost accounting methods C3b - The calculation of unit costs
using process costing, the
concepts of equivalent units and
work in progress and the
preparation of process accounts
have been removed. Subsequent
learning outcomes have been
renumbered.
New C3b((vi) covering further
processing
C3c(i) new learning outcome

covering the characteristics of
service organisations. Subsequent
learning outcomes have been
renumbered.
C4 Alternative cost accounting C4a reworded to remove total
principles quality management (TQM) which

has been moved to a separate

learning outcome F2f(iii)
D2 Budget preparation D2g/h new learning outcomes
covering the general economic
environment and sustainability in
budgeting.
D4 Capital budgeting and discounted Heading changed to Asset
cash flows budgeting and investment
appraisal.
D4a/c/f wording changes for

consistency with new heading.
F1 Performance measurement - F1e new learning outcome
overview covering the impact of
sustainability on performance
measurement.
F2a small wording change for

consistency across exams. There
are no changes to the examinable
performance measures.
F2d removed and subsequent

sections renumbered
F2g (now F2f) heading changed

and new learning outcome F2f(iii)
covering total quality management
(TQM).

Performance Management (PM)
Performance
Management
(PM)

detailed information on what could be assessed in
any examination session

Contents
...................................................................3
delivery mode .............................................5
6. Relational diagram linking Performance
Management (PM) with other exams...........8
10. The syllabus ........................................12
12. Summary of changes to Performance
Management (PM) ....................................19


qualification.
themselves.
comprehension
assessed.



Essentials:
examination.



Time management


5. Guide to ACCA



the future.

approved.

practices.

list.

6. Relational diagram linking Performance Management

(PM) with other exams
Some exams are directly underpinned by other exams such as Advanced Performance
Management by Performance Management. This diagram indicates where students are
The syllabus is assessed by a three-hour computer-based examination. Prior to the start of

the exam students are given an extra 10 minutes to read the exam instructions.
All questions are compulsory. The exam will contain both computational and discursive
elements.
Some questions will adopt a scenario/case study approach.
Students are provided with a formulae sheet.
Section A of the exam comprises 15 objective test questions of 2 marks each.
Section B of the exam comprises of three case style questions. These each contain five
objective test questions of two marks each which are based around a common scenario.
Section C of the exam comprises two 20 mark constructed response questions. One of the
20-mark questions will come from the performance measurement and control area of the
syllabus and the other will come from the decision-making techniques and/or budgeting and
control areas of the syllabus. These questions may also include requirements related to the
management information systems and data analytics, and accounting for environmental and
sustainability areas of the syllabus. The section A questions and the questions in section B
can cover any areas of the syllabus.
Total 100 marks

The aim of the syllabus is to develop knowledge and skills in the application of management
accounting techniques to quantitative and qualitative information for planning, decision-
making, performance evaluation, and control.
The syllabus for Performance Management (PM), builds on the knowledge gained in
Management Accounting (MA) and seeks to examine students’ understanding of how to
manage the performance of a business. It also prepares students for more specialist
capabilities which are covered in Advanced Performance Management (APM).
The syllabus begins by focusing on the uses and control of information, management
information systems and data analytics required by organisations to manage and measure
performance in the modern, competitive environment. It is vital for an accountant to
understand how information systems and developments in technology influence the
management accounting techniques employed and how vital information systems are in the
mechanisms of managing and controlling an organisation.
The syllabus then introduces more specialised costing and management accounting topics.
There is some knowledge assumed from Management Accounting (MA) – primarily
overhead treatments. The objective here is to ensure students s have a broader background
in management accounting techniques.
The syllabus then considers decision-making. Students s need to appreciate the problems
surrounding scarce resources, pricing and make-or-buy decisions, and how this relates to
the assessment of performance. Risk and uncertainty are a factor of real-life decisions and
students need to understand risk and be able to apply some basic methods to help resolve
the risks inherent in decision-making.
Budgeting is an important aspect of many accountants’ lives. The syllabus explores different
budgeting techniques, including analytical techniques, and the problems inherent in them.
The behavioural aspects of budgeting are important for accountants to understand, and the
syllabus includes consideration of the way individuals react to a budget. The preparation of
fixed, flexible and incremental budgets is assumed knowledge from Management Accounting
(MA).
Standard costing and variances are then built on. All the variances examined in
Management Accounting (MA) are assumed knowledge in Performance Management (PM).
Mix and yield variances and planning and operational variances are explored here, and the
link is made to performance management. It is important for accountants to be able to
interpret the numbers that they calculate and discuss what they mean in the context of
performance.
The syllabus concludes with performance measurement and control. This is a major area of
the syllabus. Accountants should appreciate the importance of both financial and non-
financial performance measures in management and should also appreciate the difficulties in
assessing performance in divisionalised businesses and the problems caused by failing to
consider external influences on performance. This section leads directly to Advanced
Performance Management (APM).
All of the subject areas covered in this syllabus could be examined in either a private sector,
public sector or not-for-profit context.

Section F of the syllabus contains outcomes relating to the demonstration of appropriate

digital and employability skills in preparing for and taking the PM examination. This includes
being able to interact with different question item types, manage information presented in
digital format and being able to use the relevant functionality and technology to prepare and
by practicing and preparing for the PM examination, using the learning support content for
computer-based examinations available via the practice platform and the ACCA website and
will need to be demonstrated during the live examination.

On successful completion of this exam, students should be able to:
A Identify and discuss the management information systems, the uses and controls over
information and big data and data analytics used by organisations to manage and
measure performance.
B Explain and apply cost and management accounting techniques.
C Select and appropriately apply decision-making techniques to facilitate business

decisions and promote efficient and effective use of scarce business resources,
appreciating the risks and uncertainty inherent in business and controlling those risks.
D Identify and apply appropriate budgeting techniques, including quantitative techniques,

and methods for planning and control and use standard costing systems to measure and
control business performance and to identify remedial action.
E Assess the performance of private, public and not-for-profit organisations from both a
financial and non-financial viewpoint, appreciating the problems of controlling
divisionalised businesses and the importance of allowing for sustainability and external
aspects.
F Demonstrate required employability and technology skills.
This diagram illustrates the flows and links between the main capabilities (sections) of the
syllabus and should be used as an aid to planning teaching and learning in a structured way.

5. Sales mix and quantity variances

10. The syllabus
6. Planning and operational variances
A Management information systems
and data analytics 7. Performance analysis
1. Management information systems E Performance measurement and

control
2. Uses and control of information
1. Performance analysis in private sector,
3. Big data and data analytics public sector and not-for-profit
organisations
B Specialist cost and management
accounting techniques 2. Divisional performance and transfer
pricing
1. Activity-based costing
3. Specific performance analysis issues in
2. Target costing not-for-profit organisations and the public
sector
3. Life-cycle costing
F Employability and technology skills
4. Throughput accounting
5. Accounting for environmental and access and manipulate relevant
sustainability factors information.
C Decision-making techniques 2. Work on relevant response options, using

available functions and technology, as
1. Relevant cost analysis would be required in the workplace.
2. Cost volume profit analysis (CVP)
3. Navigate windows and computer screens
3. Limiting factors to create and amend responses to exam
requirements, using the appropriate tools.
4. Pricing decisions
5. Make-or-buy and other short-term using the appropriate tools.
decisions
6. Dealing with risk and uncertainty in

decision-making
D Budgeting and control
1. Budgetary systems and types of budget
2. Analytical techniques in budgeting and

forecasting
3. Standard costing
4. Material mix and yield variances

3. Big data and data analytics

11. Detailed study guide
a) Describe the characteristics (volume,
velocity, variety, veracity and value) of
A Management information big data.[2]
systems and data analytics
b) Explain the purpose of the big data
1. Management information systems pyramid (data, information, knowledge,
wisdom). [2]
a) Explain the role of information systems
in organisations.[2] c) Explain the uses and benefits of big
data, data mining and data analytics,
b) Discuss the costs and benefits of e.g., predictive analytics for planning,
information systems.[2] costing, decision-making and
performance management. [2]
c) Explain the uses of the internet, intranet,
wireless technology and networks.[2] d) Discuss the challenges and risks of
implementing and using big data and
d) Identify the accounting information data analytics in an organisation.[2]
requirements and describe the different
types of information systems used for B Specialist cost and
strategic planning, management control
and operational control and decision-
management accounting
making. [2] techniques
e) Define and discuss the main 1. Activity-based costing (ABC)

characteristics of transaction processing
systems; management information a) Identify appropriate cost drivers under
systems; executive information systems; ABC. [1]
enterprise resource planning systems
and customer relationship management b) Calculate costs per driver and per unit
systems.[2] using ABC.[2]
2. Uses and control of information c) Compare ABC and traditional methods

of overhead absorption based on
a) Demonstrate how principal sources of production units, labour hours or
management information might be used machine hours.[2]
for control purposes.[2]
2. Target costing
b) Discuss the principal controls required
in generating and distributing internal a) Derive a target cost in manufacturing
information.[2] and service industries.[2]
c) Discuss the controls and procedures b) Explain the difficulties of using target
which may be necessary to ensure the costing in service industries.[2]
security of highly confidential
information that is not for external c) Suggest how a target cost gap might be
consumption.[2] closed.[2]
d) Discuss the importance of data 3. Life-cycle costing

visualisation in the presentation of
management information.[2] a) Identify the costs involved at different
stages of the life-cycle.[2]

b) Derive a life-cycle cost or profit in 2. Cost volume profit analysis (CVP)

manufacturing and service industries.[2]
a) Explain the nature of CVP analysis.[2]
c) Identify the benefits of life-cycle
costing.[2] b) Calculate and interpret the break-even
point and margin of safety.[2]
4. Throughput accounting
c) Calculate the contribution to sales ratio,
a) Discuss and apply the theory of in single and multi-product situations,
constraints.[2] and demonstrate an understanding of its
use.[2]
b) Calculate and interpret a throughput
accounting ratio (TPAR).[2] d) Calculate target profit or revenue in
single and multi-product situations and
c) Suggest how a TPAR could be demonstrate an understanding of its
improved.[2] use.[2]
d) Apply throughput accounting to a multi- e) Interpret break-even charts and profit-

product decision-making problem.[2] volume charts and interpret the
information contained within each,
5. Accounting for environmental and including multi-product situations.[2]
sustainability factors
f) Discuss the limitations of CVP analysis
a) Discuss the issues organisations face in for planning and decision-making.[2]
the management of environmental
costs.[1] 3. Limiting factors
b) Describe the different methods an a) Identify limiting factors in a scarce

organisation may use to account for its resource situation and select an
environmental costs.[1] appropriate technique.[2]
c) Discuss the issues organisations face in b) Determine the optimal production plan
accounting for environmental and where an organisation is restricted by a
sustainability factors.[1] single limiting factor, including within the
context of make-or-buy decisions.[2]
d) Discuss the role of the management
accountant in supporting the business to c) Formulate and solve multiple scarce
develop sustainable practices.[1] resource problems using both linear
programming graphs and using
C Decision-making techniques simultaneous equations as appropriate.[2]
1. Relevant cost analysis d) Explain and calculate shadow prices

(dual prices) and discuss their
a) Explain the concept of relevant implications for decision-making and
costing.[2] performance management. [2]
b) Identify and calculate relevant costs for e) Calculate slack and explain the
specific decision situations from given implications of the existence of slack for
data.[2] decision-making and performance
management.[2]
c) Explain and apply the concept of (Excluding simplex and sensitivity to
opportunity costs.[2] changes in objective functions)

4. Pricing decisions d) Apply relevant costing principles in

situations involving shut down, one-off
a) Explain the factors that influence the contracts and the further processing of
pricing of a product or service.[2] joint products.[2]
b) Calculate and explain the price elasticity 6. Dealing with risk and uncertainty in
of demand.[1] decision-making
c) Derive and manipulate a straight line a) Suggest research techniques to reduce

demand equation. Derive an equation for uncertainty e.g., focus groups, market
the total cost function (including volume- research.[2]
based discounts).[2]
b) Explain the use of simulation, expected
d) Calculate the optimum selling price and values and sensitivity.[1]
quantity for a product, equating marginal
cost and marginal revenue.[2] c) Apply expected values and sensitivity to
decision-making problems.[2]
e) Evaluate a decision to increase
production and sales levels, considering d) Apply the techniques of maximax,
incremental costs, incremental revenues maximin, and minimax regret to
and other factors.[2] decision-making problems including the
production of profit tables.[2]
f) Determine prices and output levels for
profit maximisation using the demand- e) Interpret a decision tree and use it to
based approach to pricing (both tabular solve a multi-stage decision problem.[2]
and algebraic methods).[2]
f) Calculate the value of perfect and
g) Explain different price strategies, imperfect information.[1]
including:[2]
i) All forms of cost-plus D Budgeting and control
ii) Skimming
iii) Penetration
iv) Complementary product 1. Budgetary systems and types of
v) Product-line budget
vi) Volume discounting
vii) Discrimination a) Explain how budgetary systems fit
viii) Relevant cost within the performance hierarchy.[2]
h) Calculate a price from a given strategy b) Select and explain appropriate

using cost-plus and relevant cost.[2] budgetary systems for an organisation,
including top-down, bottom-up, rolling,
5. Make-or-buy and other short-term zero-based, activity-based, incremental
decisions and feed-forward control.[2]
a) Explain the issues surrounding make-or- c) Describe the information used in budget
buy and outsourcing decisions.[2] systems and the sources of the
information needed.[2]
b) Calculate and compare “make” costs
with “buy-in” costs.[2] d) Indicate the usefulness and problems
with different budget types (including
c) Compare in-house costs and outsource fixed, flexible, zero-based, activity-
costs of completing tasks and consider based, incremental, rolling, top-down,
other issues surrounding this decision.[2] bottom-up, master, functional).[2]

e) Prepare flexed budgets, rolling budgets c) Explain and illustrate the importance of
and activity-based budgets.[2] flexing budgets in performance
management.[2]
f) Explain the beyond budgeting model,
including the benefits and problems that d) Explain and apply the principle of
may be faced if it is adopted in an controllability in the performance
organisation.[2] management system.[2]
g) Discuss the issues surrounding setting 4. Material mix and yield variances
the difficulty level for a budget.[2]
a) Calculate, identify the cause of, and
h) Explain the benefits and difficulties of the explain material mix and yield
participation of employees in the variances.[2]
negotiation of targets.[2]
b) Explain the wider issues involved in
i) Explain the difficulties of changing a changing material mix e.g., cost, quality
budgetary system or type of budget and performance measurement issues.[2]
used.[2]
c) Identify and explain the relationship of
j) Explain how budget systems can deal the material usage variance with the
with uncertainty in the environment.[2] material mix and yield variances.[2]
k) Discuss ethical and sustainability d) Suggest and justify alternative methods

considerations when setting budgets.[2] of controlling production processes.[2]
2. Analytical techniques in budgeting 5. Sales mix and quantity variances

and forecasting
a) Calculate, identify the cause of, and
a) Analyse fixed and variable cost explain sales mix and quantity
elements from total cost data using variances.[2]
high/low method.[1]
b) Identify and explain the relationship of
b) Explain and apply analysis techniques the sales volume variances with the
including correlation, regression and sales mix and quantity variances.[2]
time series.[2]
6. Planning and operational variances
c) Estimate the learning rate and learning
effect.[2] a) Calculate a revised budget.[2]
d) Apply the learning curve model to a b) Identify and explain those factors that
budgetary problem, including could and could not be allowed to revise
calculations on steady states [2] an original budget.[2]
e) Discuss the benefits and limitations of c) Calculate, identify the cause of and
correlation, regression and time series explain planning and operational
techniques, and, also the reservations variances for: [2]
with the learning curve model.[2]
i) sales, including market size and
3. Standard costing market share;
ii) materials;
a) Explain the use of standard costs.[2] iii) labour, including the effect of the
learning curve.
b) Outline the methods used to derive
standard costs and discuss the different d) Explain and discuss the manipulation
types of cost possible.[2] issues involved in revising budgets.[2]

7. Performance analysis model proposed by Fitzgerald and

Moon.[2]
a) Analyse and evaluate past performance
using the results of variance analysis.[2] g) Discuss the difficulties of target setting
in qualitative areas.[2]
b) Use variance analysis to assess how
future performance of an organisation h) Explain the need to allow for
can be improved.[2] external considerations in
performance management,
c) Identify the factors which influence including stakeholders, market
behaviour.[2] conditions and allowance for
competitors.[2]
d) Discuss the effect that variances have
on staff motivation and action.[2] i) Interpret performance in the light of
external considerations and the need to
e) Describe the dysfunctional nature of consider sustainability.[2]
some variances in the modern
environment of JIT and TQM.[2] 2. Divisional performance and transfer
pricing
f) Discuss the behavioural problems
resulting from using standard costs in a) Explain and illustrate the basis for setting
rapidly changing environments.[2] a transfer price using variable cost, full
cost and the principles behind allowing
E Performance measurement for intermediate markets.[2]
and control
b) Explain how transfer prices can distort
1. Performance analysis in private the performance assessment of
sector, public sector and not-for- divisions and decisions made.[2]
profit organisations
c) Explain the meaning of, and calculate,
a) Describe, calculate and interpret Return on Investment (ROI) and
suitable financial performance indicators Residual Income (RI), and discuss their
(FPIs) for example profitability, liquidity, shortcomings.[2]
efficiency and gearing.[2]
d) Compare divisional performance
b) Describe, calculate and interpret and recognise the problems of doing
suitable non-financial performance so.[2]
indicators (NFPIs).[2]
3. Specific performance analysis issues
c) Analyse past performance and suggest in not-for-profit organisations and the
ways for improving financial and non- public sector
financial performance.[2]
a) Comment on the problems of having
d) Explain the causes and problems non-quantifiable objectives in
created by short-termism and performance management.[2]
financial manipulation of results. [2]
b) Comment on the problems of having
e) Discuss the issues organisations face multiple objectives in not-for-profit
by favouring short-term financial gain organisations and the public sector.[2]
over long-term sustainability. [2]
c) Explain how performance could be
f) Explain and interpret the Balanced measured in not-for-profit organisations
Scorecard, and the Building Block and the public sector.[2]

d) Explain Value for Money (VFM) as a

public sector objective and how the 3Es
can be used to achieve VFM.[1]
F Employability and technology

skills


the workplace.


tools.

12. Summary of changes to Performance Management

(PM)
providers.
The main areas of change to the PM syllabus are summarised in the table below.

A Information, technologies and Heading changed to Management
systems for organisational information systems and data
performance analytics
A1 Managing information Heading changed to Management
information systems
A1d/e moved to A2b/c
New A1d/e (were A3a/b)

A2 Sources of information Heading changed to Uses and
control of information
A2a/c/d removed, and subsequent

learning outcomes renumbered
A1a (was A1b) small rewording
A1d new learning outcome

covering data visualisation
A3 Information systems and data Heading changed to Big data and
analytics data analytics
A3a/b moved to A1d/e and

subsequent learning outcomes
renumbered
B5 Environmental accounting Heading changed to Accounting for
environmental and sustainability
factors
B5c/d new learning outcomes

covering sustainability
D1 Budgetary systems and types of D1k new learning outcome
budget covering ethical and sustainability
factors in budgeting
D2 Quantitative techniques Heading changed to Analytical
techniques in budgeting and
forecasting

E1 Performance analysis in private Heading changed to Performance

sector organisations analysis in private sector, public
sector and not-for-profit
organisations
E1a small wording change for

consistency across exams. There
are no changes to the examinable
performance measures.
E1b small wording change
E1e new learning outcome

covering the issues faced when
considering sustainability
E1e/f renumbered to E1f/g
E1h (was E4a)
E1i new learning outcome covering

considerations of sustainability
E3 Performance analysis in not-for-profit Heading changed to Specific

organisations and the public sector performance analysis issues in not-
for-profit organisations and the
public sector
E2d expanded to specifically

include 3Es
E3e/f/g/h combined with E1b/f/c/d

E4 External considerations and the This section has been removed as
impact on performance all topics are covered within other
learning outcomes

Advanced Performance Management (APM)
Advanced
Performance
Management
(APM)

examination session

Contents
recognition ............................................... 3
................................................................ 7
Performance Management (APM) with
other exams ............................................. 8
10. The syllabus ..................................... 12
12.Summary of changes to Advanced
Performance Management (APM) .......... 20


qualification.
levels:
find themselves.
comprehension
assessed.
each area.
levels.



4. Guide to ACCA
Essentials:

Applied Skills
demonstrate their ability to use marks.
spreadsheets and word processing tools in


Time management


5. Guide to ACCA



documents.

approved.


list.

6. Relational diagram linking Advanced Performance

Management (APM) with other exams
Some exams are directly underpinned by other exams such as Advanced Performance
Management by Performance Management. This diagram indicates where students are
The Advanced Performance Management exam builds upon the skills and knowledge
examined in the Performance Management exam. At this stage candidates will be expected
to demonstrate an integrated knowledge of the subject and an ability to relate their technical
understanding of the subject to issues of strategic and operational importance to the
organisation. The study guide specifies the wide range of contextual understanding that is
required to achieve a satisfactory standard at this level.
• Communication
• Scepticism
The syllabus is assessed by a three-hour 15 minutes examination.

Section A
Section A of the exam will always be a 50-mark case study based on an organisation in a
particular business context. The 50 marks will comprise of 40 technical marks and 10
professional skills marks. All of the professional skills will be examined in Section A.
It is likely to include the organisation’s mission statement and strategic objectives and
candidates will be expected to be able to assess the methods by which the organisation is
controlling, managing and measuring performance in order to achieve its objectives. This
assessment could include an evaluation of the organisation’s performance report, its
information systems, new strategies or projects and its performance management and
measurement systems. Candidates should understand that they will be expected to
undertake calculations, draw comparison against relevant information where appropriate and
be prepared to offer alternative recommendations as needed.
Management accountants are required to look across a range of issues which will affect
organisational performance, the achievement of objectives and impact on operations and so
candidates should expect to see Section A of the exam focus on a range of issues from
across syllabus sections A, B and C. These will vary depending on the business context the
case study in Section A is based on.
Section A questions will ask candidates to produce a response in a specific format, for
example a report to the Board of Directors.
Section B
Candidates will be required to answer a further two 25-mark questions in Section B of the
exam, which will normally comprise of scenario based questions. The 25 marks will comprise
of 20 technical marks and 5 professional skills marks. Section B questions will examine a
combination of professional skills appropriate to the question. Each question will examine a
minimum of two professional skills from Analysis and Evaluation, Scepticism and
Commercial Acumen.
One of the Section B questions will come mainly from syllabus section D, however the other
Section B question can come from any other syllabus section.
Section B questions will also require candidates to address a range of issues influencing
performance of organisations in specific business situations.
Total 100 marks
The aim of the syllabus is to apply relevant knowledge, skills and exercise professional
judgement in selecting and applying strategic management accounting techniques in
different business contexts to contribute to the planning, control and evaluation of the
performance of an organisation and its strategic and operational development.
The Advanced Performance Management syllabus further develops key aspects introduced
in Performance Management at the Applied Skills level.

The syllabus introduces candidates to the strategic role of management accounting as a

discipline for planning and controlling performance so that strategic objectives can be set,
monitored and controlled. It recognises the impact of external factors on strategic
management issues and covers the risks these factors present and how they can be
measured and managed. From appreciating the strategic context of performance
management and the impact of wider factors, the syllabus examines the issues relating to
performance management information systems and their design. It also addresses the
impact which developments in technology will have on the performance management and
measurement systems used by organisations.
The syllabus then moves from performance management systems to the scope and
application of high-level performance measurement techniques in a variety of contexts,
including not-for-profit organisations and multi-national businesses. Having covered the
strategic aspects of performance management and operational systems for the
measurement and control of performance in a wide range of organisational contexts, ,
candidates are then expected to synthesise this knowledge in the role of an advisor to senior
management or independent clients on how to assess and control the performance of an
entity.
The syllabus concludes with outcomes relating to the demonstration of appropriate digital
and employability skills in preparing for and taking the APM examination. This includes being
able to access and open exhibits, requirements and response options from different sources
and being able to use the relevant functionality and technology to prepare and present
response options in a professional manner. These skills are specifically developed by
practising and preparing for the APM exam, using the learning support content for computer-
based exams available via the practice platform and the ACCA website, and will need to be
demonstrated during the live exam.

A Use strategic planning and control models to plan and monitor organisational
performance
B Identify and evaluate the design features of effective performance management
information and monitoring systems and recognise the impact of developments in
technology on performance measurement and management systems.
C Apply appropriate strategic performance measurement techniques in evaluating and
improving organisational performance
D Advise clients and senior management on strategic business performance
evaluation
E Apply a range of professional skills in addressing requirements within the Advanced
Performance Management exam, and in preparation for, or to support, current work
experience

10. The syllabus 7. Other behavioural aspects of

performance measurement
A Strategic planning and control
1. Strategic management accounting D Performance evaluation
2. Performance hierarchy 1. Alternative views of performance

3. Performance management and control measurement and management
of the organisation
2. Strategic performance issues in complex
4. Changes in business structure and
business structures
management accounting
5. Environmental, social and governance E Professional skills
factors
B Performance management 1. Communication
information systems and
developments in technology
1. Performance management information
systems 3. Scepticism
2. Sources of management information
3. Recording and processing systems
and technologies F Employability and technology skills
4. Data analytics
5. Management reports access and manipulate relevant
information.
C Strategic performance 2. Work on relevant response options,

measurement using available functions and
workplace.
1. Strategic performance measures in the
private sector
2. Divisional performance and transfer
to exam requirements, using
pricing issues
appropriate tools.
3. Strategic performance measures in
not-for-profit organisations
4. Non-financial performance indicators
5. The role of quality in management

information and performance
measurement systems
6. Performance measurement and strategic

human resource management issues

b) Discuss how strategic objectives are

11. Detailed study guide cascaded down the organisation via
the formulation of subsidiary
performance objectives.[2]
A Strategic planning and
control c) Apply critical success factor analysis
in developing performance metrics
1. Strategic management accounting from business objectives.[3]
a) Explain the role of strategic d) Identify and discuss the

performance management in characteristics of operational
strategic planning and control.[2] performance.[2]
b) Discuss the role of performance e) Discuss the relative significance of

measurement in checking progress planning activities as against
towards the corporate objectives.[2] controlling activities at different levels
in the performance hierarchy.[3]
c) Compare planning and control
between the strategic and f) Explain the performance ‘planning
operational levels within a business gap’ and evaluate alternative
entity.[2] strategies to fill that gap.[3]
d) Discuss the scope for potential 3. Performance management and

conflict between strategic business control of the organisation
plans and short-term localised
decisions.[2] a) Evaluate the strengths and
weaknesses of alternative budgeting
e) Evaluate how models such as SWOT models and compare such
analysis, PEST, Boston Consulting techniques as fixed and flexible,
Group, balanced scorecard, Porter’s rolling, activity based, zero based
generic strategies and 5 Forces may and incremental.[3]
assist in the performance
management process.[3] b) Evaluate different types of budget
variances and how these relate to
f) Apply and evaluate the methods of issues in planning and controlling
benchmarking performance.[3] organisations.[3]
g) Evaluate how risk and uncertainty c) Evaluate the increased use of non-
play an important role in planning, traditional profit-based performance
decision-making and reporting of measures in controlling organisations
performance at all levels of an (e.g. beyond budgeting). [3]
organisation, including the impact of
the different risk appetites of 4. Changes in business structure
stakeholders'. [3] and management accounting
2. Performance hierarchy a) Identify and discuss the particular

information needs of organisations
a) Discuss how the purpose, structure adopting a functional, divisional or
and content of a mission statement network form and the implications for
impacts on performance performance management.[2]
measurement and management.[2]
b) Assess the changes to management
accounting systems to reflect the

needs of modern service orientated lifecycle costing, input-output

businesses compared with the needs analysis and activity-based costing.[3]
of a traditional manufacturing
industry.[3]
B Performance management
c) Assess the influence of Business
Process Re-engineering on systems
information systems and
development and improvements in developments in
organisational performance.[3] technology
d) Analyse the role that performance 1. Performance management
management systems play in information systems
business integration using models
such as the value chain and a) Discuss, with reference to
McKinsey’s 7S’s.[3] performance management, ways in
which the information requirements
e) Discuss how changing an of a management structure are
organisation’s structure, culture and affected by the features of the
strategy will influence the adoption of structure.[2]
new performance measurement
methods and techniques.[3] b) Evaluate the compatibility of
management accounting objectives
f) Assess the need for businesses to and the management accounting
continually refine and develop their information systems.[3]
management accounting and
information systems if they are to c) Discuss the issue of data silos and
maintain or improve their the problems they present for the
performance in an increasingly accounting function. [2]
competitive and global market.[3]
d) Discuss the integration of
5. Environmental, social and management accounting information
governance factors within an overall information system,
for example the use of enterprise
a) Discuss the ways in which resource planning systems.[2]
stakeholder groups operate and how
they influence an organisation and its e) Evaluate whether the management
performance measurement and information systems are lean and the
performance management systems value of the information that they
(e.g. using Mendelow’s matrix).[3] provide (e.g. using the 5 Ss).[3]
b) Discuss the social and ethical issues f) Evaluate the external and internal
that may impact on strategy factors (e.g. anticipated human
formulation and evaluate the role of behaviour) which will influence the
the management accountant in the design and use of a management
collection of data, measurement and accounting system.[3]
reporting of social and environmental
factors, such as are used to 2. Sources of management
demonstrate a wider view of information
performance in reporting, for
example, sustainability.[3] a) Discuss the principal internal and
external sources of management
c) Discuss, evaluate and apply accounting information, their costs
environmental management and limitations.[2]
accounting using for example

b) Demonstrate how the information image, video and voice analytics and
might be used in planning and sentiment analysis. [2]
controlling activities e.g.
benchmarking against similar e) Discuss the ethical issues related to
activities.[3] information collection and processing
(e.g. the use of ‘black box’ algorithms
3. Recording and processing and large-scale data collection and
systems and technologies mining.[2]
a) Demonstrate how the type of 5. Management reports

business entity will influence the
recording and processing methods.[2] a) Evaluate the output reports of an
information system in the light of.[3]
b) Discuss how IT developments may i) best practice in presentation;
influence management accounting ii) the objectives of the
systems (e.g. unified corporate report/organisation;
databases, process automation, the iii the needs of the readers of
internet of things, RFIDs, cloud and the report; and
network technology.[3] iv) avoiding the problem of
information overload
c) Explain how information systems v) the use of presentation
provide instant access to previously techniques such as data
unavailable data that can be used for visualisation
benchmarking and control purposes
and help improve business b) Advise on common mistakes and
performance (e.g., through the use of misconceptions in the use of
artificial intelligence (AI), enterprise numerical data used for performance
resource planning, knowledge measurement.[3]
management and customer
relationship management systems c) Explore the role of the management
and also, data warehouses).[3] accountant in providing key
performance information for
d) Discuss the difficulties associated integrated reporting to
with recording and processing data stakeholders.[2]
of a qualitative nature.[2]
C Strategic performance
4. Data analytics
measurement
a) Discuss the development of big data
1. Strategic performance measures
and its impact on performance
in private sector
measurement and management,
including the risks and challenges it
a) Demonstrate why the primary
presents.[3]
objective of financial performance
should be primarily concerned with
b) Discuss the impact of big data and
the benefits to shareholders.[2]
data analytics on the role of the
management accountant.[3]
b) Discuss the appropriateness of, and
apply different measures of
c) Demonstrate and evaluate different
performance, including:[3]
methods of data analysis (e.g.
i) Gross profit and operating profit
descriptive, diagnostic and predictive
ii) Return on Capital Employed
analytics). [3]
(ROCE)
iii) Return on Investment (ROI)
d) Discuss the use of alternative
iv) Earnings Per Share (EPS)
methods of data analytics (e.g. text,

v) Earnings Before Interest, Tax, b) Discuss the difficulties in measuring

Depreciation and Amortisation outputs when performance is not
(EBITDA) judged in terms of money or an
vi) Residual Income (RI) easily quantifiable objective.[2]
vii) Net Present value (NPV)
viii) Internal rate of return and c) Discuss the use of benchmarking in
modified internal Rate of Return public sector performance (league
(IRR, MIRR) tables) and its effects on operational
ix) Economic Value Added (EVATM) and strategic management and client
behaviour.[3]
c) Discuss why indicators of liquidity
and gearing need to be considered in d) Discuss how the combination of
conjunction with profitability.[3] politics and the desire to measure
public sector performance may result
d) Compare and contrast short and long in undesirable service outcomes e.g.
run financial performance and the the use of targets.[3]
resulting management issues.[3]
e) Assess ‘value for money’ service
e) Assess the appropriate benchmarks provision as a measure of
to use in assessing performance.[3] performance in not-for-profit
organisations and the public sector.[3]
2. Divisional performance and
transfer pricing issues 4. Non-financial performance
indicators
a) Describe, compute and evaluate
performance measures relevant in a a) Discuss the interaction of non-
divisionalised organisation structure financial performance indicators with
including ROI, RI and Economic financial performance indicators.[3]
value added (EVATM). [3]
b) Identify and discuss the significance
b) Discuss the need for separate of non-financial performance
measures in respect of managerial indicators in relation to employees
and divisional performance.[2] and product/service quality e.g.
customer satisfaction reports, repeat
c) Discuss the circumstances in which a business ratings, customer loyalty,
transfer pricing policy may be access and availability.[3]
needed and discuss the necessary
criteria for its design.[2] c) Discuss the difficulties in interpreting
data on qualitative issues.[2]
d) Demonstrate and evaluate the use of
alternative bases for transfer d) Discuss the significance of brand
pricing.[3] awareness and company profile and
their potential impact on business
e) Explain and demonstrate issues that performance.[3]
require consideration when setting
transfer prices in multinational 5. The role of quality in management
companies.[2] information and performance
measurement systems
3. Strategic performance measures
in not-for-profit organisations a) Discuss and evaluate the application
of Japanese business practices and
a) Highlight and discuss the potential management accounting techniques,
for diversity in objectives depending including:[3]
on organisation type.[3] Kaizen costing,
Target costing,

Just-in-time, and measurement system (e.g.

Total Quality Management. Hopwood’s management styles).[3]
b) Assess the relationship of quality D Performance evaluation

management to the performance
management strategy of an 1. Alternative views of performance
organisation including the costs of measurement and management
quality.[3]
a) Apply and evaluate the ‘balanced
c) Justify the need and assess the scorecard’ approach as a way in
characteristics of quality in which to improve the range and
management information systems.[3] linkage between performance
measures.[3]
d) Discuss and apply Six Sigma as a
quality improvement method using b) Apply and evaluate the ‘performance
tools such as DMAIC for pyramid’ as a way in which to link
implementation.[2] strategy, operations and
performance.[3]
6. Performance measurement and
strategic Human Resource c) Apply and evaluate the work of
Management issues Fitzgerald and Moon that considers
performance measurement in
a) Advise on the relationship of HR business services using building
management to performance blocks for dimensions, standards and
measurement (performance rating) rewards.[3]
and suitable remuneration
methods.[3] d) Discuss and evaluate the application
of activity-based management.[3]
b) Advise on the link between
achievement of the corporate e) Evaluate and apply the value-based
strategy and the management of management approaches to
human resources (e.g. through the performance management.[3]
Building Block model).[2]
2. Strategic performance issues in
c) Discuss and evaluate different complex business structures
methods of reward practices,
including the potential beneficial and a) Discuss the problems encountered in
adverse consequences of linking planning, controlling and measuring
reward to performance performance levels, e.g. productivity,
measurement.[3] profitability, quality and service
levels, in complex business
7. Other behavioural aspects of structures.[3]
performance measurement
b) Discuss the impact on performance
a) Discuss the accountability issues that management of the use of business
might arise from performance models involving strategic alliances,
measurement systems.[3] joint ventures and complex supply
chain structures.[3]
b) Assess the statement; ‘What gets
measured, gets done’ in the context
of performance management.[3]
c) Demonstrate how management style

needs to be considered when
designing an effective performance

E Professional skills 3. Scepticism
1. Communication a) Explore the underlying reasons for

key organisational plans, issues and
a) Inform concisely, objectively and decisions, applying the attitude of an
unambiguously, adopting a suitable enquiring mind, beyond what is
style and format, using appropriate immediately apparent.[3]
technology.[3]
b) Question opinions, assertions and
b) Advise using compelling and logical assumptions, by seeking
arguments, demonstrating the ability justifications and obtaining sufficient
to counter argue where evidence for either their support and
appropriate.[3] acceptance or rejection.[3]
c) Clarify and simplify complex issues c) Challenge and critically assess the
to convey relevant information in a information presented or decisions
way that adopts an appropriate tone made, where this is clearly justified,
and is easily understood by and in the wider professional, ethical,
reflects the requirements of the organisational, or public interest.[3]
intended audience.[3]
a) Demonstrate awareness of
a) Investigate relevant information from organisational and external factors,
a range of sources, using appropriate which will affect the measurement
analytical techniques, to establish and management of an
reasons and causes of issues, assist organisation’s strategic objectives
in decision-making and to identify and operational activities.[3]
opportunities or solutions.[3]
b) Recognise key issues in determining
b) Consider information, evidence and how to address or resolve problems
findings carefully, reflecting on their and use judgement in proposing and
implications and how they can be recommending commercially viable
used in the interests of the individual, solutions.[3]
business function, division and the
wider organisational goals.[3] c) Show insight and perception in
understanding behavioural
c) Assess and apply appropriate responses, process and system-
judgement when considering related issues and wider
organisational plans, initiatives or organisational matters,
issues when making decisions; demonstrating acumen in offering
taking into account the implications advice and arriving at appropriate
of such decisions on the organisation recommendations.[3]
and those affected.[3]
F Employability and
d) Appraise information objectively with technology skills
a view to balancing the costs, risks,
benefits and opportunities, before 1. Use computer technology to
advising on or recommending efficiently access and manipulate
appropriate solutions or decisions.[3] relevant information



the workplace


tools

12.Summary of changes to Advanced Performance

Management (APM)
stakeholders such as employers, students, regulatory and advisory bodies and education
providers.
The main areas of change to the syllabus are summarised in the table below.
A Strategic planning control A1g - this learning outcome has been

expanded upon.
A2f - this learning outcome has been

added

Audit and Assurance (AA)
Audit and
Assurance (AA)

detailed information on what could be assessed in
any examination session

Contents
...................................................................3
delivery mode .............................................5
6. Relational diagram linking Audit and
Assurance (AA) with other exams ...............8
10. The syllabus ........................................11
12. Summary of changes to Audit and
Assurance (AA) .........................................19


qualification.
themselves.
comprehension
assessed.



Essentials:
examination.



Time management


5. Guide to ACCA



the future.

approved.

practices.

list.

6. Relational diagram linking Audit and Assurance (AA)

with other exams
Some exams are directly underpinned by other exams such as Advanced Audit and
Assurance by Audit and Assurance. This diagram indicates where students are expected to
have underpinning knowledge and where it would be useful to review previous learning
before undertaking study.
The syllabus is assessed by a three-hour computer based examination. All questions are
compulsory. The exam will contain both computational and discursive elements. Some
questions will adopt a scenario/case study approach. Prior to the start of the exam
candidates are given an extra 10 minutes to read the exam instructions.
Section A
Section A of the exam comprises three 10 mark case-based questions. Each case has five
objective test questions worth 2 marks each.
Section B
Section B of the exam comprises one 30 mark question and two 20 mark questions.
Section B of the exam will predominantly examine one or more aspects of audit and
assurance from planning and risk assessment, internal control or audit evidence, although
topics from other syllabus areas may also be included.
Total 100 marks

The Audit and Assurance syllabus is essentially divided into six areas. The syllabus starts
with the nature, purpose and scope of assurance engagements, including the statutory audit,
its regulatory environment, and introduces governance and professional ethics relating to
audit and assurance.
It then leads into planning the audit and performing risk assessment.
The syllabus then covers a range of areas relating to an audit of financial statements
including the scope of internal control and the role and function of internal audit. These
include, evaluating internal controls, audit evidence, and a review of the financial statements.
In addition to final review procedures, the syllabus concentrates on reporting, including the
form and content of the independent auditor’s report.
Finally, the syllabus contains outcomes relating to the demonstration of appropriate digital
and employability skills in preparing for and taking the AA examination. This includes being
format and being able to use the relevant functionality and technology to prepare and
by practicing and preparing for the AA exam, using the learning support content for
computer-based exams available via the practice platform and the ACCA website and will

A Explain the concept of audit and assurance and the functions of audit, corporate
governance, including ethics and professional conduct.
B Demonstrate how the auditor obtains and accepts audit engagements, obtains an
understanding of the entity and its environment, assesses the risk of material
misstatement (whether arising from fraud or other irregularities) and plans an audit of
financial statements
C Describe and evaluate internal controls, techniques and audit tests, including IT systems
to identify and communicate control risks and their potential consequences, making
appropriate recommendations. Describe the scope, role and function of internal audit.
D Identify and describe the work and evidence obtained by the auditor and others required
to meet the objectives of audit engagements and the application of the International
Standards on Auditing (ISAs)
E Explain how consideration of subsequent events and the going concern principle can
inform the conclusions from audit work and are reflected in different types of auditor’s
report, written representations and the final review and report.
F Demonstrate employability and technology skills

D Audit evidence
10. The syllabus
1. Assertions and audit evidence
A Audit framework and regulation
2. Audit procedures
1. The concept of audit and other
assurance engagements 3. Audit sampling and other means of
testing
2. External audits
4. The audit of specific items
3. Corporate governance
5. Automated tools and techniques
4. Professional ethics and ACCA’s Code of
Ethics and Conduct 6. The work of others
B Planning and risk assessment 7 Not-for-profit organisations
1. Obtaining, accepting and continuing E Review and reporting

audit engagements
1. Subsequent events
2. Objective and general principles
2. Going concern
3. Assessing audit risks
3. Written representations
4. Understanding the entity and its
environment and the applicable financial 4. Audit finalisation and the final review
reporting framework
5. The Independent Auditor’s Report
5. Fraud, laws and regulations
6. Audit planning and documentation
C Internal control access and manipulate relevant
information
1. Systems of internal control
2. The use and evaluation of systems of technology, as would be required in the
internal control by auditors workplace
3. Tests of controls 3. Navigate windows and computer

4. Communication on internal control to exam requirements, using the
appropriate tools
5. Internal audit and governance and the
differences between external audit and 4. Present data and information effectively,
internal audit using the appropriate tools
6. The scope of the internal audit function,

outsourcing and internal audit
assignments

11. Detailed study guide f) Explain the development and status of

International Standards on Auditing
(ISAs).[1]
A Audit framework and
g) Explain the relationship between ISAs
regulation and national standards.[1]
1. The concept of audit and other 3. Corporate governance
assurance engagements
a) Discuss the objectives, relevance and
a) Identify and describe the objective and importance of corporate governance.[2]
general principles of external audit
engagements.[2] b) Discuss the provisions of international
codes of corporate governance (such as
b) Explain the nature and development of OECD) that are most relevant to
audit and other assurance auditors.[2]
engagements.[1]
c) Describe good corporate governance
c) Discuss the concepts of accountability, requirements relating to directors’
stewardship and agency.[2] responsibilities (e.g. for risk
management and internal control) and
d) Define and provide the objectives of an the reporting responsibilities of
assurance engagement.[1] auditors.[2]
e) Explain the five elements of an d) Evaluate corporate governance

assurance engagement.[2] deficiencies and provide
recommendations to allow compliance
f) Describe the types of assurance with international codes of corporate
engagement[2] governance.[2]
g) Explain the level of assurance provided e) Analyse the structure and roles of audit
by an external audit and other review committees and discuss their benefits
engagements and the concept of true and limitations.[2]
and fair presentation.[1]
f) Explain the importance of internal
2. External audits control and risk management.[1]
a) Describe the regulatory environment 4. Professional ethics and ACCA’s Code

within which external audits take of Ethics and Conduct
place.[1]
a) Define and apply the fundamental
b) Discuss the reasons and mechanisms principles of professional ethics of
for the regulation of auditors.[1] integrity, objectivity, professional
competence and due care,
c) Explain the statutory regulations confidentiality and professional
governing the appointment, rights, behaviour.[2]
removal and resignation of auditors.[1]
b) Define and apply the conceptual
d) Explain the regulations governing the
framework, including the threats to the
rights and duties of auditors[1]
fundamental principles of self-interest,
self-review, advocacy, familiarity, and
e) Describe the limitations of external
intimidation.[2]
audits.[1]

c) Discuss the safeguards to offset the 3. Assessing audit risks

threats to the fundamental principles.[2]
a) Explain the components of audit risk.[1]
d) Describe the auditor’s responsibility with
regard to auditor independence, b) Describe the audit risks in the financial
conflicts of interest and confidentiality.[1] statements and explain the auditor’s
response to each risk.[2]
B Planning and risk
assessment c) Define and explain the concepts of
materiality and performance
materiality.[2]
1. Obtaining, accepting and continuing
audit engagements d) Explain and calculate materiality levels
from financial information.[2]
a) Discuss the requirements of
professional ethics and ISAs in relation 4. Understanding the entity and its
to the acceptance / continuance of audit environment and the applicable
engagements.[2] financial reporting framework
b) Explain the preconditions for an audit.[2] a) Explain how auditors obtain an initial
understanding of the entity and its
c) Explain the process by which an auditor
environment and the applicable financial
obtains an audit engagement.[2]
reporting framework.[2]
d) Discuss the importance and purpose of
b) Describe and explain the nature, and
engagement letters and their contents.[1]
purpose of, analytical procedures in
planning.[2]
e) Explain the overall objectives and
importance of quality management
c) Compute and interpret key ratios used in
procedures in conducting an audit.[2]
analytical procedures.[2]
f) Explain the quality management
5. Fraud, laws and regulations
procedures which should be in place
over engagement resources, a) Discuss the effect of fraud and
engagement performance, monitoring misstatements on the audit strategy and
and remediation and compliance with extent of audit work.[2]
ethical requirements.[2]
b) Discuss the responsibilities of internal
g) Evaluate quality management
and external auditors for the prevention
deficiencies and provide
and detection of fraud and error.[2]
recommendations to allow compliance
with quality management requirements.
[2] c) Explain the auditor’s responsibility to
2. Objective and general principles consider laws and regulations.[2)
a) Identify the overall objectives of the 6. Audit planning and documentation

auditor and the need to conduct an audit
a) Identify and explain the need for,
in accordance with ISAs.[2]
benefits of and importance of planning
an audit.[2]
b) Explain the need to plan and perform
audit engagements with an attitude of
b) Identify and describe the contents of the
professional scepticism, and to exercise overall audit strategy and audit plan.[2]
professional judgment.[2]

c) Explain and describe the relationship 2. The use and evaluation of systems of
between the overall audit strategy and internal control by auditors
the audit plan.[2]
a) Explain how auditors record systems of
d) Explain the difference between an internal control including the use of
interim and final audit.[1] narrative notes, flowcharts and
questionnaires.[2]
e) Describe the purpose of an interim
audit, and the procedures likely to be b) Evaluate internal control components,
adopted at this stage in the audit.[2] including deficiencies and significant
deficiencies in internal control.[2]
f) Describe the impact of the work
performed during the interim audit on c) Discuss the limitations of internal control
the final audit.[2] components.[2]
g) Explain the need for, and the 3. Tests of controls
importance of, audit documentation.[1]
a) Describe computer systems controls
h) Describe the form and contents of including general IT controls and
working papers and supporting information processing controls.[2]
documentation.[2]
b) Describe control objectives, control
i) Explain the procedures to ensure safe
procedures, control activities, direct
custody and retention of working
controls, indirect controls and tests of
papers.[1]
controls in relation to:[2]
C Internal control i) The sales system;

ii) The purchases system
1. Systems of internal control iii) The payroll system
iv) The inventory system
a) Explain why an auditor needs to obtain v) The bank and cash system
an understanding of the components of vi) Non-current assets
internal control relevant to the
preparation of the financial 4. Communication on internal control
statements.[1]
a) Discuss the requirements and methods
b) Describe and explain the five of how reporting significant deficiencies
components of a system of internal in internal control are provided to
control[2] management and those charged with
governance.[2]
i) control environment
ii) the entity’s risk assessment b) Explain, in a format suitable for inclusion
process, in a report to management, significant
iii) the entity’s process to monitor the deficiencies within a system of internal
system of internal control control and provide control
iv) the information system and recommendations for overcoming these
communication deficiencies to management.[2]
v) control activities
c) Discuss the need for auditors to
communicate with those charged with
governance.[2]

5. Internal audit and governance and the

differences between external audit b) Describe audit procedures to obtain
and internal audit audit evidence, including inspection,
observation, external confirmation,
a) Discuss the factors to be taken into recalculation, re-performance, analytical
account when assessing the need for procedures and enquiry.[2]
internal audit.[2]
c) Discuss the quality and quantity of audit
b) Discuss the elements of best practice in evidence.[2]
the structure and operations of internal
audit.[2] d) Discuss the relevance and reliability of
audit evidence.[2]
c) Compare and contrast the role of
external and internal audit.[2] 2. Audit procedures
6. The scope of the internal audit a) Discuss substantive procedures for

function, outsourcing and internal obtaining audit evidence.[2]
audit assignments
b) Discuss and provide examples of how
a) Discuss the scope of internal audit and analytical procedures are used as
the limitations of the internal audit substantive procedures.[2]
function.[2]
c) Discuss the problems associated with
b) Explain outsourcing and the associated the audit and review of accounting
advantages and disadvantages of estimates.[2]
outsourcing the internal audit function.[1]
d) Describe why smaller entities may have
c) Discuss the nature and purpose of different control environments and
internal audit assignments including describe the types of evidence likely to
value for money, IT, financial, regulatory be available in smaller entities.[1]
compliance, fraud investigations and
customer experience.[2] e) Discuss the difference between tests of
controls and substantive procedures.[2]
d) Discuss the nature and purpose of
operational internal audit assignments. 3. Audit sampling and other means of
[2] testing
e) Describe the format and content of a) Define audit sampling and explain the
internal audit review reports and make need for sampling.[1]
appropriate recommendations to
management and those charged with b) Identify and discuss the differences
governance.[2] between statistical and non-statistical
sampling.[2]
D Audit evidence
c) Discuss and provide relevant examples
of the application of the basic principles
1. Assertions and audit evidence of statistical sampling and other
selective testing procedures.[2]
a) Explain the assertions contained in the
financial statements about:[2] d) Discuss the results of statistical
(i) Classes of transactions and events sampling, including consideration of
and related disclosures; whether additional testing is required.[2]
(ii) Account balances and related
disclosures at the period end.

4. The audit of specific items ii) depreciation and

iii) profit/loss on disposal.
For each of the account balances stated in
this sub-capability: f) Non-current liabilities, provisions and
contingencies:[2]
Explain the audit objectives and the audit i) evidence in relation to non-current
procedures to obtain sufficient, appropriate liabilities and
evidence in relation to: ii) provisions and contingencies.
a) Receivables: [2] g) Share capital, reserves and directors’

i) direct confirmation of accounts emoluments: [2]
receivable i) evidence in relation to share capital,
ii) other evidence in relation to reserves and directors’ emoluments.
receivables and prepayments
iii) other evidence in relation to current 5. Automated tools and techniques
assets and
iv) completeness and occurrence of a) Explain the use of automated tools and
revenue. techniques in the context of an audit,
including the use of audit software, test
b) Inventory: [2] data and other data analytics tools.[1]
i) inventory counting procedures in
relation to year-end and continuous b) Discuss and provide relevant examples
inventory systems of the use of automated tools and
ii) cut-off testing technqiues including test data, audit
iii) auditor’s attendance at software and other data analytics
inventory counting tools.[2]
v) direct confirmation of inventory held
by third parties 6. The work of others
vi) valuation and
vii) other evidence in relation to a) Discuss why auditors rely on the work of
inventory. others.[2]
c) Payables and accruals: [2] b) Discuss the extent to which external
i) supplier statement reconciliations auditors are able to rely on the work of
and direct confirmation of accounts experts, including the work of internal
payable audit.[2]
ii) obtain evidence in relation to
payables and accruals
c) Explain the audit considerations relating
iii) other evidence in relation to current
to entities using service organisations.[2]
liabilities and
iv) purchases and other expenses,
d) Explain the extent to which reference to
including payroll.
the work of others can be made in the
independent auditor’s report.[1]
d) Bank and cash: [2]
i) bank confirmation reports used in
7. Not-for-profit organisations
obtaining evidence in relation to
bank and cash a) Apply audit techniques to not-for-profit
ii) other evidence in relation to bank organisations.[2]
and
iii) other evidence in relation to cash.
e) Tangible and intangible non-current

assets [2]
i) evidence in relation to non-current
assets

E Review and reporting 4. Audit finalisation and the final review
1. Subsequent events a) Discuss the importance of the overall

review in ensuring that sufficient,
a) Explain the purpose of a subsequent appropriate evidence has been
events review.[1] obtained.[2]
b) Explain the responsibilities of auditors b) Describe procedures an auditor should

regarding subsequent events.[1] perform in conducting their overall
review of financial statements.[2]
c) Discuss the procedures to be
c) Explain the significance of uncorrected
undertaken in performing a subsequent
misstatements.[1]
events review.[2]
d) Evaluate the effect of dealing with
2. Going concern
uncorrected misstatements.[2]
a) Define and discuss the significance of
the concept of going concern.[2] 5. The Independent Auditor’s Report
b) Explain the importance of and the need a) Identify and describe the basic elements
for going concern reviews.[2] contained in the independent auditor’s
report.[1]
c) Explain the respective responsibilities of
auditors and management regarding b) Explain unmodified audit opinions in the
going concern.[1] auditor’s report.[2]
d) Identify and explain potential indicators c) Explain the circumstances in which a

that an entity is not a going concern.[2] modified audit opinion may be issued in
the auditor’s report.[2]
e) Discuss the procedures to be applied in
performing going concern reviews.[2] d) Explain the impact on the auditor’s
report when a modified opinion is
f) Discuss the disclosure requirements in issued. [2]
relation to going concern issues.[2]
e) Describe the format and content of key
g) Discuss the reporting implications of the audit matters, emphasis of matter and
findings of going concern reviews.[2] other matter paragraphs.[2]
3. Written representations F Employability and technology

skills
a) Explain the purpose of and procedure
for obtaining written representations.[2] 1. Use computer technology to
b) Discuss the quality and reliability of relevant information.
written representations as audit
evidence.[2] 2. Work on relevant response options,
c) Discuss the circumstances where technology, as would be required in
written representations are necessary the workplace.
and the matters on which
representations are commonly 3. Navigate windows and computer
obtained.[2] screens to create and amend


tools.

12. Summary of changes to Audit and Assurance (AA)
providers.
There have not been any significant additions, deletions or amendments to the 2023/24
study guide from the 2022/23 study guide.

Advanced Audit and Assurance (AAA) (INT)
Advanced Audit
and Assurance
(AAA-INT)

examination session
Advanced Audit & Assurance – (AAA-INT)
Contents
recognition ............................................... 3
................................................................ 7
Audit and Assurance (AAA-INT) with other
exams ...................................................... 8
8. Introduction to the syllabus................. 10
10. The syllabus ..................................... 12
12. Summary of changes to Advanced
Audit and Assurance (AAA-INT) ............. 22

1.Intellectual levels 2.Learning hours and

qualification.
levels:
find themselves.
comprehension
assessed.
each area.
levels.

3.The structure of ACCA qualification


4. Guide to ACCA
Essentials:

Applied Skills
demonstrate their ability to use marks.
spreadsheets and word processing tools in


Time management


Advanced Audit and Assurance – (AAA-INT)
5.Guide to ACCA



documents.

approved.


list.

6. Relational diagram linking Advanced Audit and

Assurance (AAA-INT) with other exams
Some exams are directly underpinned by other exams such as Advanced Audit and
Assurance (AAA) by Audit and Assurance (AA) and Strategic Business Reporting (SBR).
This diagram indicates where students are expected to have underpinning knowledge and
where it would be useful to review previous learning before undertaking study.
The Advanced Audit and Assurance exam builds upon the skills and knowledge examined in
the Audit and Assurance exam. At this stage candidates will be expected to demonstrate an
integrated knowledge of the subject. The study guide specifies the wide range of contextual
understanding that is required to achieve a satisfactory standard at this level.
• Communication
• Professional Scepticism and Judgement
The syllabus is assessed by a three-hour 15 minute examination
The examination is constructed in two sections. Questions in both sections will be largely
discursive. However, candidates will be expected, for example, to be able to assess
materiality and calculate relevant ratios where appropriate.

Section A
Section A will comprise a Case Study, worth 50 marks, set at the planning stage of the audit,
for a single company, a group of companies or potentially several audit clients. Candidates
will be provided with detailed information, which will vary between examinations, but is likely
to include extracts of financial information, strategic, operational, and other relevant financial
information for a client business, as well as extracts from audit working papers, including
results of analytical procedures. The 50 marks will comprise of 40 technical marks and 10
professionals skills marks. All professional skills with be examined in Section A.
Candidates will be required to address a range of requirements, predominantly from syllabus

sections A, B, C and D, thereby tackling a real world situation where candidates may have to
address a range of issues simultaneously in relation to planning, risk assessment, evidence
gathering and ethical and professional considerations. Please note that other syllabus
areas, excluding E, may also be drawn on as part of the Case Study.
Section B
Section B will contain two compulsory 25 mark questions, with each being predominately
based around a short scenario which may relate to more than one client. The 25 marks will
comprise of 20 technical marks and 5 professional skills marks. Section B questions will
examine a combination of professional skills appropriate to the question. Each question will
examine a minimum of two professional skills from analysis and evaluation, professional
scepticism and judgement and commercial acumen
One question will always predominantly come from syllabus section E, and consequently
candidates should be prepared to answer a question relating to completion, review, and
reporting. There are a number of formats this question could adopt, including, but not limited
to, requiring candidates to assess going concern, the impact of subsequent events,
evaluating identified misstatements and the corresponding effect on the auditor’s report.
Candidates may also be asked to critique an auditor’s report or evaluate the matters to be
included in a report which is to be provided to management or those charged with
governance.
The other Section B question can be drawn from any other syllabus section, including A, B,
C, D and F.
Quality management and ethics
The auditor’s assessment of effective quality management procedures and consideration of

ethical issues are fundamental to all stages of the audit and therefore these concepts could
be examined in any section of the exam.
Current issues
Syllabus section G on current issues may be examined in Section A or B as appropriate.

Current issues is unlikely to form the basis of any question on its own but instead will be
incorporated into the Case Study or either of the Section B questions dependent on question
content and the topical issues affecting the profession at the time of writing.
Total 100 marks

The aim of the syllabus is to analyse, evaluate and conclude on the assurance engagement
and other audit and assurance issues in the context of best practice and current
developments .
The Advanced Audit and Assurance (AAA-INT) syllabus further develops key skills
introduced in Audit and Assurance at the Applied Skills level.
The syllabus starts with the legal and regulatory environment including money laundering,
and professional and ethical considerations, including the Code of Ethics and professional
liability. This then leads into procedures in practice management, including quality
management and the acceptance and retention of professional engagements.
The syllabus then covers the audit of financial statements, including planning and evidence
gathering. It then covers the completion, evidence evaluation and review and reporting on an
audit of historical financial information. The next section moves onto other assignments
including prospective financial information, due diligence and forensic audit as well as the
reporting of these assignments.
The next section covers current issues and developments relating to the provision of audit-
related and assurance services.
The final section of the syllabus contains outcomes relating to the demonstration of
appropriate digital and employability skills in preparing for and taking the AAA examination.
This includes being able to access and open exhibits, requirements and response options
from different sources and being able to use the relevant functionality and technology to
prepare and present response options in a professional manner. These skills are
specifically developed by practicing and preparing for the AAA exam, using the learning
support content for computer-based exams available via the practice platform and the ACCA
website and will need to be demonstrated during the live exam.

A Recognise the legal and regulatory environment and its impact on audit and assurance
practice
B Demonstrate the ability to work effectively on an assurance or other service engagement

within a professional and ethical framework
C Assess and recommend appropriate quality management policies and procedures in

practice management and recognise the auditor’s position in relation to the acceptance
and retention of professional appointments
D Identify and formulate the work required to meet the objectives of audit assignments and
apply the International Standards on Auditing
E Evaluate findings and the results of work performed and draft suitable reports on
assignments
F Identify and formulate the work required to meet the objectives of non-audit assignments
G Understand the current issues and developments relating to the provision of audit-related
and assurance services
H Apply a range of professional skills in addressing requirements within the Advanced

Audit and Assurance exam, and in preparation for, or to support current work experience
I Demonstrate employability and technology skills

10. The syllabus 4. Reports to those charged with

governance and management
A Regulatory Environment F Other assignments
1. International regulatory frameworks for 1. Audit-related and assurance services

audit and assurance services
2. Specific assignments
2. Money laundering
3. The audit of social, environmental,
3. Laws and regulations sustainability and integrated reporting
B Professional and Ethical 4. The audit of performance information

Considerations (pre-determined objectives) in the public
sector
1. Code of Ethics for Professional
Accountants 5. Reporting on other assignments
2. Fraud and error G Current Issues and Developments
3. Professional liability 1. Professional and ethical developments
C Quality Management and Practice 2. Other current issues

Management
H Professional skills
1. Quality management (firm-wide)
1. Communication
2. Advertising, tendering, and obtaining
professional work and fees 2. Analysis and evaluation
3. Professional appointments
3. Professional Scepticism and Judgement
D Planning and conducting an audit of
historical financial information 4. Commercial acumen
1. Planning, materiality and assessing the
I Employability and technology skills
risk of material misstatement
2. Evidence and testing considerations
3. Audit procedures and obtaining evidence information.
4. Using the work of others 2. Work on relevant response options, using

5. Group audits required by the workspace.
E Completion, review, and reporting 3. Navigate windows and computer screens

to create and amend responses to exam
1. Subsequent events and going concern requirements, using the appropriate tools
2. Completion and final review 4. Present data and information effectively,
3. Auditor’s reports

e) Explain the importance of customer due

11. Detailed study guide diligence (CDD) also referred to as Know
Your Customer (KYC) and recommend
the information which should be
A Regulatory environment gathered as part of CDD/KYC.[2]
1. International regulatory frameworks f) Recognise potentially suspicious

for audit and assurance services transactions and assess their impact on
reporting duties.[2]
a) Explain the need for laws, regulations,
standards, and other guidance relating to g) Describe, with reasons, the basic
audit, assurance and related services.[2] elements of an anti-money laundering
program.[2]
b) Outline and explain the need for the
legal and professional framework 3. Laws and regulations
including:[2]
i) public oversight of audit and a) Compare and contrast the respective
assurance practice responsibilities of management and
ii) the impact of corporate auditors concerning compliance with
governance principles on audit laws and regulations in an audit of
and assurance practice financial statements.[2]
c) Discuss the role of the audit committee b) Describe the auditors’ considerations of
and its impact on audit and assurance compliance with laws and regulations
practice in relation to: [2] and plan audit procedures, when
i) the relationship with the external possible, non-compliance is discovered.
auditor, including the appointment, [2]
removal, and monitoring of
effectiveness; and c) Discuss how and to whom non-
ii) the oversight and approval of the compliance should be reported.[2]
provision of non-audit services.
d) Recognise and recommend when
2. Money laundering withdrawal from an engagement is
necessary.[2]
a) Define ‘money laundering’ and discuss
international methods for combatting
money laundering.[2]
B Professional and ethical
considerations
b) Explain the scope of criminal offences of
money laundering and how professional 1. Code of Ethics for Professional
accountants may be protected from Accountants
criminal and civil liability.[2]
a) Explain the fundamental principles and
c) Explain the need for ethical guidance in the conceptual framework approach.[1]
this area.[2]
b) Identify, evaluate, and respond to threats
d) Describe how accountants meet their to compliance with the fundamental
obligations to help prevent and detect principles.[3]
money laundering including record
keeping and reporting of suspicion to the c) Discuss and evaluate the effectiveness
appropriate regulatory body.[2] of available safeguards.[3]

d) Recognise and advise on conflicts in the and discuss the auditor’s potential
application of fundamental principles.[3] liability in given situations.[2]
e) Discuss the importance of professional c) Compare and contrast liability owed to

scepticism in planning and performing an client with liability owed to third parties
audit.[2] (ie contract vs establishing duty of
care).[3]
f) Consider the ethical implications of the
external auditor providing non-audit d) Evaluate the practicability and
services to a client including an internal effectiveness of ways in which liability
audit service.[2] may be restricted including the use of
liability limitation agreements.[3]
g) Assess whether an engagement has
been planned and performed with an e) Discuss and appraise the principal
attitude of professional scepticism and causes of audit failure and other factors
evaluate the implications.[3] that contribute to the ‘expectation gap’
(e.g. responsibilities for fraud and error)
2. Fraud and error and recommend ways in which that gap
may be bridged.[3]
a) Identify and develop an appropriate
response to circumstances which
indicate a high risk of error, irregularity,
C Quality management
fraud or misstatement in the financial
1. Quality management (firm and
statements or a given situation.[2]
engagement level)
b) Compare and contrast the respective
a) Explain the principles and purpose of
responsibilities of management and
quality management of audit and other
auditors for fraud and error.[2]
assurance engagements.[1]
c) Describe the matters to be considered
b) Describe the elements of a system of
and recommend procedures to be
quality management relevant to a given
carried out to investigate actual and/or
firm.[2]
potential misstatements in a given
situation.[2]
c) Evaluate the firm’s system of quality
management (SoQM) and whether this
d) Explain how, why, when and to whom
is effective in the proactive prevention
fraud and error should be reported and
and identification of deficiencies .[3]
the circumstances in which an auditor
should withdraw from an engagement.[2]
2. Advertising, tendering, and obtaining
professional work and fees
e) Consider the current and possible future
role of auditors in preventing, detecting,
a) Evaluate the appropriateness of publicity
and reporting error and fraud.[2]
material including the use of the ACCA
logo and reference to fees.[2]
3. Professional liability
b) Outline the determinants of fee-setting
a) Recognise circumstances in which
and justify the bases on which fees and
professional accountants may have legal
commissions may and may not be
liability and the criteria that need to be
charged for services.[3]
satisfied for legal liability to be
recognised.[2]
c) Discuss the ethical and other
professional problems, for example,
b) Describe the factors to determine
lowballing, involved in establishing and
whether or not an auditor is negligent

negotiating fees for a specified information and assessment of risks of

assignment.[3] material misstatement.[3]
d) Recognise and explain the matters to be e) Evaluate the results of planning and risk
considered prior to tendering for an audit assessment procedures to determine the
or other professional engagement and relevant audit strategy, including the
explain the information to be included in auditor’s responses .[3]
the proposal.[2]
f) Explain the planning procedures specific
3. Professional appointments to an initial audit engagement.[2]
a) Explain the professional and ethical g) Discuss the importance of the auditor
matters to be considered and the gaining an understanding of the entity
procedures that an audit including the applicable financial
firm/professional accountant should reporting framework, its accounting
carry out before accepting a specified policies, significant classes of
new client/engagement or continuing transactions, balances and disclosures
with an existing engagement, including:[3] and the entity’s system of internal control
i) client acceptance and recommend additional information
ii) engagement acceptance (new which may be required in gaining that
and existing engagements) understanding.[2]
iii) establishing whether the
preconditions for an audit are h) Discuss how transnational audits may
present differ from other audits of historical
iv) agreeing the terms of engagement. financial information (e.g. in terms of
applicable financial reporting and
b) Recognise the key issues that underlie auditing standards, listing requirements
the agreement of the scope and terms of and corporate governance
an engagement with a client.[2] requirements).[2]
i) Recognise matters which are not

D Planning and conducting an relevant to the planning of an
audit of historical financial assignment.[2]
information
2. Evidence and testing considerations
1. Planning, materiality and assessing
the risk of material misstatement a) Identify and describe audit procedures
(including substantive procedures and
a) Define materiality and performance tests of controls (for both direct and
materiality and demonstrate how it indirect controls)) to obtain sufficient
should be applied in financial reporting appropriate audit evidence from
and auditing.[2] identified sources to support the relevant
assertions and disclosures.[2]
b) Discuss and demonstrate the use of
analytical procedures in the planning of b) Assess and describe how IT can be
an assignment.[3] used to assist the auditor, and
recommend the use of automated tools
c) Evaluate and prioritise business risks, and techniques, such as audit software,
audit risks and risks of material test data and other data analytics tools
misstatement for a given assignment.[3] where appropriate.[2]
d) Interpret the results of analytical c) Evaluate and interpret the results of data
procedures, in an unbiased manner and analytics tools when used during
apply professional scepticism to support planning or evidence collection.[2]
the identification of contradictory

d) Recommend additional information xxii) the effects of foreign exchange

which may be required to effectively rates
carry out a planned engagement or a xxiii) segmental reporting
specific aspect of an engagement.[2] xxiv) financial statement notes and
related disclosures
e) Apply the further considerations and xxv) earnings per share
audit procedures relevant to initial xxvi) changes in accounting policy
engagements.[2] xxvii) payroll and other expenses
f) Apply analytical procedures to financial b) Explain how the auditor’s responsibilities

and non-financial data.[2] for corresponding figures, comparative
financial statements, and ‘other
g) Explain the specific audit problems and information’, are discharged.[3]
procedures concerning related parties
and related party transactions.[2] c) Explain the auditor’s main considerations
in respect of social and environmental
h) Recognise circumstances that may matters and how they impact on entities
indicate the existence of unidentified and their financial statements (e.g.
related parties and recommend impairment of assets, provisions, and
appropriate audit procedures.[2] contingent liabilities).[2]
3. Audit procedures and obtaining 4. Using the work of others

evidence
a) Recognise when it is justifiable to place
a) Design appropriate audit procedures reliance on the work of an expert (e.g. a
relating to:[3] surveyor employed by the audit client or
i) inventory (including standard costing audit firm).[2]
systems)
ii) non-current assets b) Evaluate the potential impact of an
iii) intangible assets internal audit department on the
iv) biological assets planning and performance of the
v) investment properties external audit.[2]
vi) assets held for sale and
discontinued operations c) Assess the appropriateness and
vii) financial instruments sufficiency of the work of internal
viii) accounting estimates including
auditors and the extent to which reliance
fair values
can be placed on it. [2]
ix) government grants
x) leases
d) Recognise and evaluate the impact of
xi) impairment
xii) provisions, contingent liabilities, outsourced functions, such as payroll,
and contingent assets on the conduct of an audit.[3]
xiii) borrowing costs
xiv) employee benefits 5. Group audits
xv) share-based payment
transactions a) Recognise the specific matters to be
xvi) taxation (including deferred tax) considered before accepting
xvii) related parties appointment as group auditor to a group
xviii) revenue from contracts with in a given situation.[3]
customers
xix) statement of cash flows b) Identify, assess and respond to the risks
xx) business combinations associated with the audit of group
xxi) events after the end of the financial statements, including:
reporting period i) assessment of group and component
performance materiality;

ii) assessment of aggregation risk in a E Completion, review, and

given scenario; reporting
iii) the impact of non-coterminous year
ends; 1. Subsequent events and going
iv) changes in group structure or a concern
complex group structure
a) Design audit procedures to identify
c) Identify and describe the procedures to subsequent events which may require
be performed at the planning stage of adjustment to, or disclosure in, the
an audit of group financial statements, financial statements of a given entity.[2]
including consideration of the role and
work of component auditors.[3] b) Evaluate indicators that the going
concern basis of accounting may be in
d) Recommend and discuss the doubt and recognise mitigating factors.[2]
communications between the group
auditor and the component auditor in a c) Recommend audit procedures or
given situation.[3] evaluate the evidence that might be
expected to be available and assess the
e) Recognise the audit problems and appropriateness of the going concern
describe audit procedures specific to: basis of accounting in given situations.[3]
a business combination, including
i) the classification of investments; d) Assess the adequacy of disclosures in
ii) the determination and impairment of financial statements relating to going
goodwill; concern and explain the implications for
iii) group accounting policies; the auditor’s report with regard to the
iv) intra-group trading; going concern basis of accounting.[3]
v) equity accounting for associates and
joint ventures 2 Completion and final review
vi) changes in group structure, including
a) Apply analytical procedures for the
acquisitions and disposals
purposes of evaluation and review and
vii) accounting for a foreign subsidiary.[3]
evaluate the results in the context of
other audit evidence.[3]
f) In respect of the consolidation process
identify and explain the relevant audit b) Assess whether an engagement has
risks and audit procedures necessary to been planned and performed in
obtain sufficient appropriate evidence.[3] accordance with professional
standards.[3]
g) Evaluation of the quality of work
performed by a component auditor and c) Evaluate whether reports issued are
assess the sufficiency and quality of the appropriate in the relevant
audit evidence obtained. circumstances.[3]
h) Explain the responsibilities of the d) Evaluate as part of the final review the
component auditor before accepting matters (e.g. materiality, risk, relevant
appointment, and the procedures to be accounting standards) and audit
performed in a group situation.[2] evidence to confirm if sufficient and
appropriate evidence has been obtained.
i) Justify the situations where a joint audit [3]
would be appropriate, including

identification of additional risks and e) Evaluate the use of written
challenges associated with the representations from management to
engagement in a given scenario.[2] support other audit evidence.[2]

f) Justify the review procedures which appropriate and recommend and justify
should be performed in a given the content of each.[3]
assignment, including the need for an
engagement quality review and the h) Discuss the courses of action available
appropriateness of the review to an auditor if a material inconsistency
performed. or material misstatement exists in
relation to other information such as
g) Recommend appropriate additional contained in the integrated report.[2]
procedures or actions required following
review of the assurance work.[2] 4. Reports to those charged with
governance and management
h) Describe the importance of the role of
the engagement quality reviewer. a) Critically assess the quality of a report to
those charged with governance and
i) Evaluate the appropriateness of the management.[3]
engagement quality reviewer in a given
scenario, recommending further actions b) Advise on the content of reports to those
which may be taken within the firm. charged with governance and
management in a given situation.[3]
3 Auditor’s reports
F Other assignments
a) Determine the form and content of an
auditor’s report and assess the 1. Audit-related and assurance services
appropriateness of the contents of an
auditor’s report containing an unmodified a) Describe the nature of audit-related
opinion.[3] services, the circumstances in which
they might be required, and the
b) Recognise and evaluate the factors to be comparative levels of assurance
considered when forming an audit provided by professional accountants
opinion in a given situation, including the and distinguish between:[2]
effect of uncorrected misstatements, and i) audit-related services and an
justify audit opinions which are audit of historical financial
consistent with the results of audit statements
procedures.[3] ii) an attestation engagement and a
direct engagement.
c) Critically appraise the form and content
of an auditor’s report in a given b) Describe the main categories of
situation.[3] assurance services that audit firms can
provide and assess the benefits of
d) Assess whether or not a proposed audit providing these services to management
opinion is appropriate.[3] and external users.[3]
e) Advise on the actions which may be c) Describe the level of assurance
taken by the auditor in the event that a (reasonable, high, moderate, limited,
modified auditor’s opinion is issued.[3] negative) for an engagement depending
on the subject matter evaluated, the
f) Explain the implications for the auditor’s criteria used, the procedures applied,
report on the group financial statements and the quality and quantity of evidence
of an entity where the opinion on a obtained.[3]
component is modified in a given
situation.[2] 2. Specific assignment
• Due Diligence
g) Recognise when the use of an emphasis • Review of interim financial
of matter paragraph, other matter information
paragraph and KAM disclosure would be

• Prospective financial of socio-environmental and sustainability

information matters.[2]
• Forensic audits
d) Discuss the form and content of an
For each of the other assignments listed independent verification statement of an
above: integrated report or sustainability
information. [2]
a) Define and describe the purpose of each
type of assignment and analyse the 4 The audit of performance information
appropriate level of assurance which (pre-determined objectives) in the
may be offered by a professional firm in public sector
relation to these assignments. [3]
a) Describe the audit of performance
b) Evaluate the matters to be considered information (pre-determined objectives)
before accepting the engagement, and differentiate from performance
including any ethical and professional auditing. [2]
considerations. [3]
b) Plan the audit of performance
c) Plan the assignment, applying information (pre-determined
professional scepticism, to gather objectives), and describe
suitable evidence and provide an examination procedures to be used
appropriate level of assurance in line in the audit of this type of
with the objectives of the assignment. [2] information.[3]
d) Discuss the level of assurance that the c) Discuss the audit criteria of reported
auditor may provide and explain the performance information, namely
other factors to be considered in compliance with reporting requirements,
determining the nature, timing, and usefulness, measurability and
extent of examination procedures.[1] reliability.[3]
e) Describe and recommend appropriate d) Discuss the form and content of a report
substantive, examination or investigative on the audit of performance information.
[2]
procedures which can be used to gather
sufficient and appropriate evidence in
the circumstances.[2] e) Discuss the content of an audit
conclusion on an integrated report of
3. The audit of social, environmental, performance against pre-determined
sustainability and integrated objectives. [3]
reporting
5. Reporting on other assignments
a) Plan an engagement to provide
assurance on integrated reporting a) Analyse the form and content of the
(performance measures and professional accountant’s report for an
sustainability indicators).[2] assurance engagement as compared
with an auditor’s report.[2]
b) Describe the difficulties in measuring
and reporting on economic, b) Discuss the content of a report for an
environmental, social and sustainability examination of prospective financial
information and give examples of information.[2]
performance measures and
sustainability indicators.[2] c) Discuss the effectiveness of the
‘negative assurance’ form of reporting
c) Describe substantive procedures to and evaluate situations in which it may
detect potential misstatements in respect be appropriate to modify a conclusion.[3]

G Current issues and H Professional skills

developments
1. Communication
Discuss the relative merits and the
consequences of different standpoints a) Inform concisely, objectively and
taken in current debates and express unambiguously, adopting a suitable
opinions supported by reasoned style and format, using appropriate
arguments. technology.[3]
1. Professional and ethical b) Advise using compelling and logical

developments arguments, demonstrating the ability to
counter argue where appropriate.[3]
a) Discuss emerging ethical issues and
evaluate the potential impact on the c) Clarify and simplify complex issues to
profession, firms and auditors.[3] convey relevant information in a way
that adopts an appropriate tone and is
b) Discuss the content and impact of easily understood by, and reflects the
exposure drafts, consultations and other requirements of the intended
pronouncements issued by IFAC and its audience.[3]
supporting bodies (including IAASB,
IESBA and TAC).[2] 2. Analysis and Evaluation
2. Other current issues a) Investigate relevant information from a

range of sources, using appropriate
a) Discuss current developments in analytical techniques to establish
auditing standards including the need for reasons and causes of issues,
new and revised standards and evaluate connections between different sources
their impact on the conduct of audits. [3] of information and to determine
significant risks and appropriate
b) Discuss current developments in responses.[3]
business practices, practice
management, audit methodology and b) Consider information, evidence, and
evaluate the potential impact on the findings carefully, reflecting on their
conduct of an audit and audit quality. [3] implications and how they impact the
engagement, audit firm or audit client.[3]
c) Discuss the proposed changes to the
audit profession and critically evaluate c) Assess and apply appropriate
the implications of these changes for judgement when considering ethical and
companies and audit firms and their professional issues, audit matters and
impact on audit process and quality.[3] when making conclusions or
recommendations, taking into account
d) Discuss current developments in the implications of such decisions on the
emerging technologies, including big audit firm, engagement and audit
data and the use of automated tools and client.[3]
techniques such as data analytics, and
sustainability reporting and the potential d) Appraise information objectively, in
impact on the conduct of an audit and order to effectively prioritise audit
audit quality.[3] issues, explore suitable audit responses
and when making decisions, devising
e) Discuss the impact of significant global courses of action or determining audit
events on audit practice.[3] conclusions.[3]

3. Professional scepticism and acumen in arriving at suitable

judgement conclusions.[3]
a) Explore the underlying reasons for I Employability and technology

issues, applying an attitude of a
questioning mind, beyond what is
skills
immediately apparent from the usual
sources and opinions available and 1. Use computer technology to efficiently
demonstrate the ability to be to alert to, access and manipulate relevant
and identify, conditions which might information.
indicate misstatements or the existence
of fraud or error.[3] 2. Work on relevant response options, using
b) Question contradictory information or required by the workspace.
facts, opinions, assertions and the
reliability or inherent bias of information 3. Navigate windows and computer screens
presented, by seeking corroboratory or to create and amend responses to exam
additional information to either support requirements, using the appropriate tools
or reject its acceptance.[3]
c) Challenge and critically assess the
information and evidence presented, or
decisions made, to reach a conclusion
on whether sufficient and appropriate
evidence has been obtained on which to
base the audit opinion.[3]
d) Demonstrate appropriate professional

judgement, including the application of
appropriate auditing, accounting and
ethical standards, to draw conclusions
and make informed decisions about the
courses of action which are appropriate
in the context of the engagement.[3]
4. Commercial Acumen
a) Demonstrate awareness of any wider

external factors or implications, in a
given scenario, for the audit
engagement, audit firm or audit client.[3]
b) Recognise key issues and limitations,

and consider the plausibility, and the
practical or commercial implications, of
recommendations made in the context
of the engagement and audit firm.[3]
c) Show insight and perception in

understanding the wider implications
and impact of implementing relevant
recommendations and demonstrate

12. Summary of changes to Advanced Audit and

Assurance (AAA-INT)
providers.
The main changes which have been made to the syllabus are summarised in the table
below.
Table of amendments
22/23 LO Section and subject Syllabus content changes (referring to

reference area the 23/24 LO)
C1c Quality management LO amended to reflect the proactive

nature and terminology of the revised
quality management standards (C1c)
C3a Quality management Additional emphasis placed on the
professional and ethical issues which
should be considered by the assurance
firm. This is in line with the revised quality
management standards
D1e Planning and risk Actions required by the candidate
assessment amended to reflect the professional skills
required at the planning and risk
assessment stage
D2b Automated tools and Wording changed to clarify the learning
techniques outcome
D5b Group audits LO updated to reflect the terminology with
the revised auditing standard, including
emphasis on consideration of aggregation
risk and group performance materiality.
Separate elements of key areas for
consideration added from prior year
syllabus point D5c (D5c)
D5c Group audits Change of order of LO as risks to be
considered before procedures. Separate
key risk areas moved to D5c. (D5b)
D5d Group audits LO amended to reflect the two way
emphasis of communication between the
group auditor and the component auditors
in a group engagement following revision
of ISA 600.
D5e Group audits LO updated for clarity.

D5g Group audits LO updated to reflect the revisions to the

quality standards and ISA 600.
D5i Group audits Wording updated to clarify the LO and
revisions to ISA 600.
E2e Completion and final LO amended to reflect the professional
review skills expected to be demonstrated by the
candidates when considering the relevant
scenario and appropriate response by the
assurance team. LO split into two to form
E2f and E2g for clarity.
E2g Completion and final LO becomes E2e

review
- Completion and final New LO to reflect the importance of the
review role of the engagement quality reviewer
(E2h, E2i)
E3b Auditor’s reports Minor wording change for clarity

Strategic Business Leader (SBL)
Strategic
Business Leader
(SBL)

examination session

1
Contents
recognition ............................................... 3
assessment.............................................. 7
6. Relational diagram linking Strategic
Business Leader (SBL) with other exams. 8
8. Introduction to the syllabus................. 10
10. The syllabus ..................................... 13
12. Summary of changes to Strategic
Business Leader (SBL) .......................... 22

2

qualification.
levels:
find themselves.
comprehension
assessed.
with Applied Knowledge, level 2 equates
each area.
to Applied Skills and level 3 to Strategic
levels.

3

4

Essentials:
contain 100% compulsory questions to contextual details in order for candidates to
assessed by a two-hour computer based and the industry in which it operates.
examination.
The Corporate and Business Law exam is a exhibits and candidates are required to

are assessed by a three hour computer-
(excluding Corporate and Business Law) All the option examss contain a total of 80

5

Time management
ACCA encourages students to read
questions carefully and to plan answers but
once the exam time has started, there are
no additional restrictions as to when
candidates may start producing their
answer.


6
5. Guide to ACCA


issued or legislation passed on or before
31 August annually, will be examinable from
1 September of the following year to 31

the future.

approved.


list.

7
6. Relational diagram linking Strategic Business Leader

(SBL) with other exams
This diagram shows links between this exam and other exams preceding or following it. This
diagram indicates where students are expected to have underpinning knowledge and where
it would be useful to review previous learning before undertaking study.
The Strategic Business Leader syllabus is examined using a 100% integrated case study,
examining across a breadth of organisational functions.
The examination assesses the technical and digital capabilities that potential leaders need to
demonstrate in senior positions within organisations but will also be focused on the following
professional skills and behaviours:
• Communication
• Commercial acumen
• Analysis
• Scepticism
• Evaluation
Each exam will therefore assess both technical skills and the above professional skills.
Whilst marks will be awarded for the relevant technical points that candidates make, up to
20% of the total marks within each exam will be allocated to these professional skills, as
determined by the requirements.
The examination requires the demonstration of appropriate digital and employability skills in
accessing relevant sources of information to carry out various tasks and being able to use
the relevant functionality and technology to prepare and present answers in a professional
manner.

These skills are specifically developed by practicing and preparing for the SBL exam, using
the learning support content for computer-based exams available via the practice platform
and the ACCA website.
Pre-seen information will be released two weeks before the exam sitting. The pre-seen
contains background and contextual information on the fictious organisation that the exam
will be based on and the industry in which it operates.
Students are expected to familiarise themselves with the pre-seen information in advance of
the exam, making sure that they understand the terms and concepts that are included within
the pre-seen. Students are not expected to conduct further research into the industry that is
covered in the pre-seen.
The examination is based on an integrated case study. The exam itself will contain further
information relating to the fictiuous organisation in the pre-seen. The information could be
from a range of sources, such as extracts of meetings, board reports and spreadsheets.
Each exam will contain three tasks with a varying number of marks. These tasks may
require the candidate to take on different roles, depending on the situation.
The number of marks allocated to all these tasks will add up to 100 in total. Within the total
marks available, there are 20 professional skills marks. Most tasks will contain professional
skills marks. All tasks must be completed.
The examination is of 3 hours and 15 minutes duration, but this includes Reading, Planning
and Reflection time (RPRT). This time can be used flexibly at any time during the exam.
Guidance on learning hours
The ACCA qualification does not prescribe or recommend any particular number of learning
hours for examinations because study and learning patterns and styles vary greatly between
people and organisations. This also recognises the wide diversity of personal, professional
and educational
circumstances in which ACCA students find themselves.
However, the Strategic Business Leader examination has a broad syllabus and the
assessment style as a fully integrated exam requires more teaching and learning time than
in the other exams at this level. This includes direct contact time and guided learning time
where a taught programme is delivered, or self-study and revision time where the student is
self-taught or uses distance-learning programmes.
The additional time is required for the following:
1. To cover the broader syllabus content.

2. To allow adequate practice time for case study assessment and revision.
3. To encourage and develop the demonstration of professional skills to support the
award of professional skills marks.
4. To become familiar with and understand the information contained within the pre-
seen document.

The aim of the syllabus is to demonstrate organisational leadership and senior consultancy
or advisory capabilities and relevant professional skills, through the context of an integrated
case study.
The syllabus for Strategic Business Leader acts as the key leadership syllabus at the
Strategic Professional level and is a substantial integrated examination. The examination
requires candidates to demonstrate a range of professional skills demanded by effective
leaders or in advising or supporting senior management in directing organisations. The
syllabus therefore combines the main functions of organisations in the context of leadership
capability.
The main capabilities of the Strategic Business Leader syllabus assume essential technical
skills and knowledge have been acquired in the Applied Knowledge and Applied Skills
examinations where some of the core capabilities of Strategic Business Leader will have
been introduced in a subject-specific context, such as governance, internal audit, control,
risk, finance, and management. The examination also draws upon a range of ethical and
professional skills acquired in the Ethics and Professional Skills module, which should be
completed before attempting any of the Strategic Professional examinations.
The Strategic Business Leader syllabus is covered in ten main sections with leadership,
professionalism and ethics and corporate governance used as the initial focus for the rest of
the syllabus.
Excellent leadership involves having a team of capable and responsible directors, setting an
appropriate ‘tone from the top’ and embedding appropriate corporate and cultural values
within the organisation.
This is supported by a sound governance structure and effective management structures.
The syllabus begins by examining leadership and having in place responsible and ethical
leaders, having an awareness of who they are responsible to. This section also covers
personal and professional ethics, ethical frameworks – and professional values – as applied
to a senior manager or adviser’s role and as a guide to appropriate behaviour and conduct
in a variety of situations.
Clearly linked to organisational leadership is the existence of an effective governance

structure within organisations in the broad context of the agency relationship. This aspect of
the syllabus focuses on the respective roles and responsibilities of directors, the relevant
committee structures and the effective scrutiny of the performance of senior management,
demonstrating their accountability by reporting more widely and holistically to stakeholders
under an integrated reporting <IR> framework.
It is only after the fundamental organisational leadership and governance structures and
values are in place that strategy can be determined and the strategic position of the
organisation can be assessed and strategic options evaluated and implemented.
Evaluating strategic options, making strategic choices and implementing strategy requires
the organisation’s leaders, or their advisers, to fully understand the risks involved so the
syllabus then examines the identification, assessment, and control of risk as a key aspect of
responsible leadership and management.
The syllabus also includes a section relating to and applying IT and security controls at all
levels of the organisation from strategic considerations including big data, machine learning,
e-business, cloud computing and smart technology through to using IT in the management

of information, controlling organisations, and in financial and organisational operations. This

section also focuses on the growing importance of ‘cyber security’.
To support the management of risk the syllabus also addresses organisational control in its
wider context, including internal audit, review, internal control, and appropriate reporting to
implement and support effective governance, including compliance issues related to the
safeguard of assets including data security, and decision-support functions.
The syllabus includes financial aspects of managing an organisation, including evaluating

available sources of finance and key financial and management accounting techniques to
analyse performance and to support decision-making. Candidates need to be aware of legal
issues and of the financial reporting and taxation implications of strategic and investment
decisions.
The syllabus then focuses on enabling success and change management. The syllabus
includes organisational changes, talent management, performance excellence, IT solutions
and project management, including the role of new and disruptive technologies in
transforming the nature of business analysis and transactions.
professional skills that the candidate must demonstrate in the exam which will make them
more employable, or if already in work, will enhance their opportunities for advancement.
The last section, which closely links to the professional skills section, is the demonstration of
appropriate digital and employability skills in preparing for and taking the examination. This
includes being able to use computer functionality and technology to access information and
present responses in a professional manner during live examinations.

A Apply excellent leadership and ethical skills to set the ‘tone from the top’ and promote
a positive culture within the organisation, adopting a whole organisation perspective
in managing performance and value creation.
B Evaluate the effectiveness of the governance and agency system of an organisation
and recognise the responsibility of the board or other agents towards their
stakeholders, including the organisation’s social responsibilities and the reporting
implications.
C Evaluate the strategic position of the organisation against the external environment
and the availability of internal resources, to identify feasible strategic options.
D Analyse the risk profile of the organisation and of any strategic options identified,
within a culture of responsible risk management.
E Select and apply appropriate information technologies and data analytics, to
analyse factors affecting the organisation’s value chain to identify strategic
opportunities and implement strategic options within a framework of robust IT
security controls.
F Evaluate management reporting and internal control and audit systems to ensure
compliance and the achievement of organisation’s objectives and the
safeguarding of organisational assets
G Apply high level financial techniques from the Applied Skills exams in the planning,
implementation and evaluation of strategic options and actions.
H Enable success through innovative thinking, applying best in class strategies and
disruptive technologies in the management of change; initiating, leading and
organising projects,while effectively managing talent and other business resources.
I Apply a range of professional skills in addressing requirements within the Strategic
Business Leader examination and in preparation for, or to support, current work
experience.
J Demonstrate other employability and digital skills in preparing for and taking the
Strategic Business Leader examination.

G Finance in planning and

10. The syllabus decision-making
A Leadership 1. Finance transformation

2. Financial analysis and decision- making
1. Qualities of leadership techniques
2. Leadership and organisational culture 3. Cost and management accounting
3. Professionalism, ethical codes and the
public interest H Enabling success and change
management
B Governance
1. Enabling success: organising
1. Agency 2. Enabling success: disruptive
2. Stakeholder analysis and organisational technologies
social responsibility 3. Enabling success: talent
3. Governance scope and approaches management
4. Reporting to stakeholders 4. Enabling success: performance
5. The board of directors excellence
6. Public sector governance 5. Managing strategic change
6. Leading and managing projects
C Strategy
I Professional skills
1. Concepts of strategy
2. Environmental issues 1. Communication
3. Competitive forces 2. Commercial acumen
4. The internal resources, capabilities and 3. Analysis
competences of an organisation 4. Scepticism
5. Strategic choices 5. Evaluation
D Risk J Other employability and digital skills
1. Identification, assessment and 1. Use computer technology to efficiently

measurement of risk access and manipulate relevant
2. Managing, monitoring and mitigating risk information.
E Technology and data analytics using available functions and
1. Cloud, mobile and smart technology workplace.
2. Big data and data analytics 3. Navigate windows and computer
3. Machine learning, AI and robotics screens to create and amend responses
4. E- business: value chain to exam requirements, using
5. IT systems security and control appropriate tools.
F Organisational control and audit using the appropriate tools.
1. Management and internal control

systems
2. Audit and compliance
3. Internal control and management
reporting

11. Detailed study guide c) Analyse the reasons for conflicts of

interest and ethical conflicts in
organisations and recommend
A Leadership resolutions.[3]
1. Qualities of leadership d) Assess the nature and impact of different
ethical threats and recommend
a) Explain the role of effective leadership appropriate safeguards to prevent or
and identify the key leadership traits mitigate such threats.[3]
effective in the successful formulation
and implementation of strategy and e) Recommend best practice for reducing
change management.[3] and combating fraud, bribery and
corruption to increase public confidence
b) Apply the concepts of entrepreneurship and trust in organisations.[3]
and ‘intrapreuneurship’ to exploit
strategic opportunities and to innovate
successfully.[3] B Governance
c) Apply, in the context of organisation 1. Agency

governance and leadership qualities, the
key ethical and professional values a) Discuss the nature of the principal-agent
underpinning governance.[3] relationship in the context of
governance.[3]
2. Leadership and organisational culture
b) Analyse the issues connected with the
a) Discuss the importance of leadership in separation of ownership of an
defining and managing organisational organisation from control over its
culture.[3] activities.[3]
b) Advise on the style of leadership 2. Stakeholder analysis and social

appropriate to manage strategic responsibility
change.[2]
a) Discuss, and critically assess, the
c) Analyse the culture of an organisation, to concept of stakeholder power and
recommend suitable changes, using interest using the Mendelow model and
appropriate models such as the cultural apply this to strategy and governance.[3]
web.[3]
b) Evaluate the stakeholders’ roles, claims
d) Assess the impact of culture on and interests in an organisation and how
organisational purpose and strategy. [3} they may conflict and be resolved.[3]
3. Professionalism, ethical codes and c) Explain social responsibility and viewing

the public interest the organisation as a ‘corporate citizen’
in the context of governance and
a) Critically evaluate the concept of sustainability.[2]
responsible leadership and the creation
of public value by acting in the public 3. Governance scope and approaches
interest.[3]
a) Analyse and discuss the role and
b) Assess management behaviour against influence of institutional investors in
the codes of ethics relevant to governance systems and structures.[2]
accounting professionals including the
IESBA (IFAC) or professional body
codes.[3]

b) Compare rules versus principles-based 5. The board of directors

approaches to governance and advise
when they may each be appropriate.[3] a) Assess the duties and roles of directors
and functions of the board (including
c) Discuss different models of setting a responsible ‘tone’ from the top
organisational ownership that influence and being accountable for the
different governance regimes (family performance and impact of the
firms versus joint stock company-based organisation):[3]
models) and explain how they work in
practice.[2] b) Evaluate the case for and against unitary
and two-tier board structures.[3]
d) Apply the general principles of the
International Corporate Governance c) Describe and assess the purposes,
Network (ICGN)’s Global Governance responsibilities and performance of Non-
Principles to organisations’ corporate Executive Directors (NEDs).[3]
governance.[2]
d) Describe and assess the importance of
4. Reporting to stakeholders induction, performance appraisal and the
continuing professional development of
a) Discuss the factors that determine directors on the board.[3]
organisational policies on reporting to
stakeholders, including stakeholder e) Explain the meaning of ‘diversity’ and
power and interests.[3] critically evaluate issues relating to
diversity on the board of directors.[3]
b) Assess the role and value of integrated
reporting <IR> and evaluate the issues f) Assess the importance, roles, purposes
concerning accounting for and accountabilities of the main board
sustainability.[2] committees in respect of effective
governance:[3]
c) Advise on the guiding principles, the
typical content elements and the six g) Describe and assess the general
capitals of an integrated report <IR>, and principles of remunerating directors and
discuss the usefulness of this modifying directors’ behaviour to align
information to stakeholders.[3] with stakeholder interests: [3]
d) Describe and assess the social and h) Explain and analyse the regulatory,
environmental impacts that economic strategic and labour market issues
activity can have (in terms of social and associated with determining directors’
environmental ‘footprints’ and remuneration.[3]
environmental reporting).[3]
6. Public sector governance
e) Describe the main features of internal
management systems for underpinning a) Discuss public sector, private sector,
environmental and sustainability charitable status and non-governmental
accounting such as EMAS and ISO (NGO and quasi-NGOs) forms of
14000.[2] organisation, including agency
relationships, stakeholders’ objectives
f) Examine how the audit of integrated and performance criteria.[2]
reports <IR> can provide adequate
assurance of the relevance and reliability b) Assess and evaluate the strategic
of <IR> to stakeholders.[2] objectives, leadership and governance
arrangements that are specific to public
sector organisations as contrasted with
the private sector.[3]

c) Explain democratic control, political c) Apply Porter’s value chain to assist

influence and policy implementation in organisations to identify value adding
public sector organisations.[3] activities in order to create and sustain
competitive advantage.[2]
d) Discuss obligations of public sector
organisations to meet the economy, d) Advise on the role and influence of value
effectiveness and efficiency (the 3 E’s) networks.[3]
criteria and promote public value.[3]
e) Evaluate the opportunities and threats
posed by the competitive environment of
C Strategy an organisation.[2]
1. Concepts of strategy
4. The internal resources, capabilities
and competences of an organisation
a) Explain the fundamental importance of
strategy and strategic decisions within
a) Identify and evaluate an organisation’s
different organisational contexts.[2]
strategic capability, its threshold
resources, threshold competences,
b) Apply the Johnson, Scholes and
unique resources and core
Whittington model of strategic
competences.[3]
management –strategic analysis,
strategic choices and strategic
b) Discuss the capabilities required to
implementation.[3]
sustain competitive advantage.[2]
2. Environmental issues
c) Discuss the contribution of
organisational knowledge to the strategic
a) Assess the macro-environment of an
capability of an organisation.[2]
organisation using appropriate models
such as PESTEL.[3]
d) Identify and evaluate the strengths and
weaknesses of an organisation and
b) Assess the implications of strategic
formulate an appropriate SWOT
drift.[3]
analysis.[2]
c) Evaluate the external key drivers of
5. Strategic choices
change likely to affect the structure of a
sector or market.[3]
a) Assess and advise on the different
strategic options available to an
d) Apply Porter’s Diamond to explore the
organisation.[3]
influence of national competitiveness on
the strategic position of an
b) Assess the opportunities and potential
organisation.[3]
problems of pursuing different strategies
of product/market diversification from a
e) Assess scenarios reflecting different
national, multinational and global
assumptions about the future
perspective.[3]
environment of an organisation.[3]
c) Advise on how the 7 P’s, price-based
3. Competitive forces
strategies, differentiation and lock-in can
help an organisation sustain its
a) Evaluate the sources of competition in
competitive advantage.[3]
an industry or sector using Porter’s Five
Forces framework.[3]
d) Apply the Boston Consulting Group
(BCG) and public sector portfolio matrix
b) Analyse customers and markets
models to assist organisations in
including market segmentation.[2]
managing their portfolios.[3]

e) Recommend generic development b) Evaluate a risk register and use heat

directions using the Ansoff growth vector maps when identifying or monitoring
matrix.[2] risk.[3]
f) Assess how internal development, c) Evaluate the concept of embedding risk

business combinations, strategic in an organisation’s culture and values.[3]
alliances and partnering can be used to
achieve business growth.[3] d) Explain and analyse the concepts of
spreading and diversifying risk and
D Risk when this would be appropriate.[2]
1. Identification, assessment and e) Advise on risk management strategies,

measurement of risk including the use of the TARA model.[3]
a) Discuss the relationship between f) Explain and assess the benefits of

organisational strategy and risk incurring or accepting some risk as part
management strategy.[3] of competitively managing an
organisation referring to the ‘as low as
b) Apply the enterprise risk management reasonably practical’ (ALARP)
(ERM) approach to risk management and principle.[3]
for establishing risk management
systems.[2] g) Apply the concept of assurance mapping
to modern risk management using the
c) Identify and evaluate key risks, including 'four lines of defence' [3]
environmental and climate related risks,
and their impact on organisations and E Technology and data analytics
projects.[3]
1. Cloud, mobile and smart technology
d) Distinguish between strategic and
operational risks.[2] a) Discuss, from a strategic perspective,
the need to explore opportunities for
e) Assess attitudes towards risk and adopting new technologies such as
risk appetite and how this can affect cloud, mobile and smart technology
risk policy.[2] within an organisation.[3]
f) Discuss the dynamic nature of risk b) Discuss key benefits and risks of cloud,
and the ways in which risk varies in mobile and smart technology.[2]
relation to the size, structure, industry,
sector and development of an c) Assess and advise on using the cloud as
organisation.[2] an alternative to owned hardware and
software technology to support
g) Assess the severity and probability of risk organisation information system needs.[3]
events.[2]
2. Big data and data analytics
i) Explain and evaluate the concepts of
related and correlated risk factors.[3] a) Discuss how information technology and
data analysis can effectively be used to
2. Managing, monitoring and mitigating inform and implement organisational
risk strategy.[3]
a) Explain and assess the role of a risk b) Describe big data and discuss the
manager.[3] opportunities and threats big data
presents to organisations.[2]

c) Identify and analyse relevant data for safeguard of information technology

strategic decisions on new product assets, to ensure the organisation meets
developments, marketing and pricing.[3] its business objectives.[3]
3. Machine learning, AI and robotics F Organisational control and

audit
a) Explain the potential benefits of using
artificial intelligence (AI), robotics and
1. Management and internal control
other forms of machine learning to
systems
support strategic decisions and the
pursuit of corporate objectives.[2]
a) Evaluate the key features of effective
internal control systems such as those
b) Assess the risk, control and ethical
included in the COSO framework.[3]
implications of using AI, robotics and
other forms of machine learning.[3]
b) Assess whether information flows to
management are adequate for the
4. E- business: value chain
purpose of managing internal control
and risk.[3]
a) Assess the organisation’s approach to
delivering e-business.[3]
c) Evaluate the effectiveness and potential
weaknesses of internal control
b) Assess and advise on the potential
systems.[3]
application of information technology to
support e- business.[3]
d) Discuss and advise on the importance of
sound internal control and legal and
c) Explore the characteristics of e-
regulatory compliance and the
marketing using the 6 I’s of interactivity,
consequences to an organisation of poor
intelligence, individualisation, integration,
control and non-compliance.[2]
industry structure and independence of
location.[2]
e) Recommend new internal control
systems or changes to the components
d) Assess the importance of online
of existing systems to help prevent fraud,
branding in e-marketing and compare it
error, waste or harmful environmental
with traditional branding.[2]
impacts.[2]
e) Explore different methods of acquiring
2. Audit and compliance
and managing suppliers and customers
through exploiting e-business
a) Examine the need for an internal audit
technologies.[2]
function in the light of regulatory and
organisational requirements.[3]
5. IT systems security and control
b) Justify the importance of auditor
a) Discuss, from a strategic perspective,
independence in all client-auditor
the continuing need for effective
situations (including internal audit) and
information systems control within an
the role of internal audit in compliance.[3]
organisation.[3]
b) Assess and advise on the adequacy of
c) Justify the importance of having an
information technology and systems
effective internal audit committee
security controls for an organisation.[3]
overseeing the internal audit function.[2]
c) Evaluate and recommend ways to
d) Assess the appropriate responses to
promote cyber security.[3]
auditors’ recommendations.[3]
d) Evaluate and recommend improvements
or changes to controls over the

3. Internal control and management f) Assess organisational performance and

reporting position using appropriate performance
management techniques, key
a) Justify the need for reports on internal performance indicators (KPIs) and
controls to shareholders.[3] ratios.[3]
b) Discuss the typical contents of a report 3. Cost and management accounting

on internal control and internal audit
including environmental and a) Discuss, from a strategic perspective,
sustainability audits .[2] the continuing need for effective cost
management and control systems within
c) Assess how internal controls underpin organisations.[3]
and provide information for reliable
financial and sustainable reporting.[3] b) Evaluate methods of forecasting,
budgeting, standard costing and
G Finance in planning and variance analysis in support of strategic
planning and decision making.[3]
decision-making
1. Finance transformation H Enabling success and change
management
a) Discuss how advances in technology are
transforming the finance sector and the 1. Enabling success: organising
role and structure of the finance function
within organisations.[2] a) Advise on how organisational structure
and internal relationships can be re-
b) Evaluate alternative structures for organised to deliver a selected
the finance function using business strategy.[3]
partnering, outsourcing and shared
or global business services.[3] b) Advise on the implications of
collaborative working and partnering,
2. Financial analysis and decision- including franchising, process
making techniques outsourcing, shared services and global
business services.[3]
a) Determine the overall investment
requirements of the organisation.[2] 2. Enabling success: disruptive
technology
b) Assess and advise on alternative
sources of short and long term finance a) Identify and assess the potential impact
available to the organisation to support of disruptive technologies such as
strategy and operations.[3] Fintech, including cryptocurrencies.[3]
c) Review and justify decisions to select or b) Assess the impact of new
abandon competing investments. products,processes, service
applying suitable investment appraisal developments and innovation in
techniques.[3] supporting organisation strategy.[2]
d) Justify strategic and operational 3. Enabling success: talent management
decisions taking into account risk and
uncertainty.[3] a) Discuss how talent management can
contribute to supporting organisational
e) Assess the broad financial reporting and strategy.[3]
tax implications of taking alternative
strategic or investment decisions.[2] b) Analyse opportunities for organisational
improvement using the four view POPIT

(people, organisation, processes and d) Analyse, assess and classify the costs
information technology) model.[3] and benefits of a project investment.[3]
4. Enabling success: performance e) Establish the role and responsibilities of

excellence the project manager and the project
sponsor.[2]
a) Apply the Baldrige model for world class
organisations to achieve and maintain f) Assess the importance of developing a
business performance excellence.[3] project plan and its key elements.[3]
b) Assess and advise on how an g) Monitor and control project risks and
organisation can be empowered to reach slippages, recommending
its strategic goals, improve its results improvements.[2]
and be more competitive, focusing on its
critical success factors (CSF).[3] h) Discuss the benefits of a post-
implementation and a post-project
5. Managing strategic change review.[2]
a) Evaluate the effectiveness of current I Professional skills

organisational processes.[3)
1. Communication
b) Evaluate different types of strategic
change and assess their implications.[2] a) Inform concisely, objectively, and
unambiguously, while being sensitive to
c) Establish an appropriate scope and cultural differences, using appropriate
focus for organisational process change media and technology.[3]
using Harmon’s process-strategy
matrix.[3] b) Persuade using compelling and logical
arguments demonstrating the ability to
d) Assess and advise on possible redesign counter argue when appropriate.[3]
options for improving the current
processes of an organisation.[3] c) Clarify and simplify complex issues to
convey relevant information in a way that
e) Recommend a process redesign adopts an appropriate tone and is easily
methodology for an organisation.[2] understood by the intended audience.[3]
f) Manage change in the organisation 2. Commercial acumen
using models such as Lewin’s three
stage model.[2] a) Demonstrate awareness of
organisational and wider external factors
g) Assess implications of change in an affecting the work of an individual or a
organisation using Balogun and Hope team in contributing to the wider
Hailey’s contextual features.[3] organisational objectives.[3]
6. Leading and managing projects b) Use judgement to identify key issues in
determining how to address or resolve
a) Determine the distinguishing features of problems and in proposing and
projects and the constraints they operate recommending the solutions to be
in.[2] implemented.[3]
b) Discuss the implications of the triple c) Show insight and perception in
constraints of scope, time and cost.[2] understanding work-related and
organisational issues, including the
c) Prepare a business case document and management of conflict, demonstrating
project initiation document.[2]

acumen in arriving at appropriate

solutions or outcomes.[3] b) Estimate trends or make reasoned
forecasts of the implications of external
3. Analysis and internal factors on the organisation,
or of the outcomes of decisions available
a) Investigate relevant information from a to the organisation.[3]
wide range of sources, using a variety of
analytical techniques to establish the c) Appraise facts, opinions and findings
reasons and causes of problems, or to objectively, with a view to balancing the
identify opportunities or solutions.[3] costs, risks, benefits and opportunities,
before making or recommending
b) Enquire of individuals or analyse solutions or decisions.[3]
appropriate data sources to obtain
suitable evidence to corroborate or J Other employability and
dispute existing beliefs or opinion and
come to appropriate conclusions.[3]
digital skills
c) Consider information, evidence and
findings carefully, reflecting on their
implications and how they can be used
in the interests of the department and
wider organisational goals.[3]
4. Scepticism
the workplace.
a) Probe deeply into the underlying
reasons for issues and problems,
beyond what is immediately apparent
from the usual sources and opinions
available.[3]
b) Question facts, opinions and assertions,
by seeking justifications and obtaining
tools.
sufficient evidence for their support and
acceptance.[3]
c) Challenge information presented or

decisions made, where this is clearly
justified, in a professional and courteous
manner; in the wider professional,
ethical, organisational, or public
interest.[3]
5. Evaluation
a) Assess and use professional judgement

when considering organisational issues,
problems or when making decisions;
taking into account the implications of
such decisions on the organisation and
those affected.[3]

12. Summary of changes to Strategic Business Leader (SBL)
stakeholders such as employers, students, regulatory and advisory bodies and learning providers.
There have been a number of changes to the study guide, many of these are minor wording changes
aimed at improving the clarity of the syllabus. Details of the more substantial changes which have
been made are summarised below:

B2 Stakeholder analysis and social responsibility B2b - reworded to include conflict resolution
B5 The board of directors B5a - reworded to include the roles of directors
B5c - reference to roles of non-executives
removed as now covered in B5a
C1 Concepts of strategy C1b - reworded to reflect wording used in model
C5 Strategic choices C5a - specific reference to SAF removed as this
can be examined in a number of ways
C5d- clarification of model name
C5e - clarification of model name
D1 Identification, assessment and measurement D1g - reference to models removed as this can be
of risk examined in a number of ways
D2 Managing, monitoring and mitigating risk D2e -reworded for clarity
E4 E-business: value chain E4a - reworded for clarity
F1 Management and internal control systems F1e - reference to metrics removed as this can be
examined in a number of ways
G2 Financial analysis and decision-making G2b - specific reference to SAF removed as this
techniques can be examined in a number of ways
G3 Cost and management accounting G3c - removed as this is covered by C5a

H3 Enabling success: talent management H3b - reworded for clarity
H5 Managing strategic change H5d - reworded for clarity
H5e - removed as now covered by H5d
H5f to H5h - renumbered as H5e to H5g

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Financial Accounting (FA/FFA)

September 2023 to August 2024

Designed to help with planning study and to provide

1 © ACCA 2023-2024 All rights reserved

2 © ACCA 2023-2024 All rights reserved

2. Learning hours and

3 © ACCA 2023-2024 All rights reserved

4. Guide to ACCA 5. Guide to ACCA

For this examination, regulation issued or

Regulation issued or legislation passed in

The term ‘effective’ relates to when

The study guide offers more detailed

4 © ACCA 2023-2024 All rights reserved

6. Relational diagram linking Financial Accounting

The Foundations in Accountancy suite of qualifications is designed so that a student can

7. Approach to examining the syllabus

The syllabus is assessed by a two-hour computer-based examination. Questions will assess

8. Overall aim of the syllabus

5 © ACCA 2023-2024 All rights reserved

9. Introduction to the syllabus

10. Main capabilities

On successful completion of this exam, candidates should be able to:

A Explain the context and purpose of financial reporting

Relational diagram of main capabilities:

6 © ACCA 2023-2024 All rights reserved

7. Accruals expenses (accruals), prepaid

A The context and purpose of financial 8. Receivables and payables

2. Stakeholders’ needs E Reconciliations

3. The main elements of financial reports 1. Bank reconciliations

4. The regulatory framework 2. Trade payables account reconciliations

5. Duties and responsibilities of those F Preparing a trial balance

1. Key principles and concepts of 3. Suspense accounts

C The use of double-entry and 2. Statement of profit or loss and other

1. Double-entry book-keeping principles 3. Disclosure notes

2. General ledger accounts and journal 5. Statement of cash flows (excluding

D Recording transactions and events 6. Incomplete records

1. Sales and purchases H Preparing basic consolidated

3. Analysis of financial statements

7 © ACCA 2023-2024 All rights reserved

12. Detailed study guide i) IFRS Foundation®

8 © ACCA 2023-2024 All rights reserved

iv) Verifiability a) Describe the main types of general

b) Describe how financial data is initially

f) Identify the main types of business 2. Cash

9 © ACCA 2023-2024 All rights reserved

3. Inventories g) Record the revaluation of a tangible

f) Calculate the value of closing 5. Depreciation

10 © ACCA 2023-2024 All rights reserved

6. Intangible non-current assets and

b) Identify types of intangible assets.[K] a) Identify and explain examples of

b) Calculate the adjustments needed for i) Illustrate how to include movements in

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c) Illustrate the different methods of k) Identify the components of the

d) Calculate provisions and changes in E Reconciliations

e) Define a bonus (capitalisation) issue a) Explain the purpose of the trade

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reconciliation of the trade payables

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a) Apply techniques used in incomplete Fair value of consideration X

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b) Explain the interrelationships between

b) Describe the key features of a parent-

c) Describe the principle of the equity