P5 - KAPLAN Study Text

Study P5

As the name implies, this exam tests advanced performance management issues and parts and is especially suitable for those candidates who are thinking about their career in management accounting or love to participate in strategic management decisions.

ACCA expects candidates to demonstrate and apply a professional approach to all questions, not only to present information in a professional manner, but also to integrate knowledge, obtain and understand issues and programs throughout the program.

The exam team has suggested that students should not expect the subjects of the P5 exams to be assessed in isolation. One of the main skills that the candidate must demonstrate in the P5 exam is to be able to build, take advantage of the knowledge obtained through their studies to date, in order to present absolute and complete solutions to relatively broad commercial problems or problems.

1 What is P5 about?

The syllabus for this paper P5 further develops the key aspects and skills introduced in exam F5, and builds, builds on aspects of the material and knowledge about strategic, operational planning and performance covered in the SBL exam.

However, while Paper P3 emerged in module SBL, it also evaluates the principles of management accounting as part of the broader analysis of a business situation, Paper P5 is more likely to test aspects of management accounting, such as methods and budgeting or costing techniques in own right.

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The stated main objective of the P5 study program (syllabus) is:
    'Apply knowledge, information, skills, relevant skills and exercise professional judgment when choosing, selecting and applying accounting methods and techniques of strategic management in different types of business contexts and contributing to the evaluation of the performance of an organization and company and its strategic development.'
Read this main objective carefully. Candidates are no longer just a" decisive factor "that prepares budgets and produces a kind of calculation to include management reports. that candidates understand the broader problems that affect companies or organizations. These topics are often written in different newspapers and magazines such as the Financial Times and The Economist, so it is important that candidates read the financial press to help them identify how the problems they are studying in P5 relate to the world real context.

At this level in student studies, candidates must also recognize how the subjects they previously studied begin to fit. Candidates should begin to have a holistic view of the company and an organization and see how different parts of it and the various processes affect overall performance, rather than considering individual problems and problems in isolation.

Importantly, the P5 exam is also likely to assess the ability of candidates to evaluate different approaches to performance management, from a wide variety of perspectives. In addition to knowing what the approaches are, candidates should also be able to compare them to each other in the context of a scenario; for example, compare the long and short term problems that affect the company and the performance of an organization.

Snapshot of the syllabus

The syllabus expects you to apprehend and understand how firms, companies, organisation set their strategy and approach and the external influences that affect strategic plans and operational outcomes. You will be expected to evaluate specific systems of overall performance management and apply strategic performance measurement methods and techniques in evaluating and improving performance. You may also be expected to advice, recommend on strategic performance evaluation and the possibility of corporate failure. Finally, you need to be conscious of the modern and current developments in management accounting and overall performance management, as these have an effect on organisations.
There are 5 parts to the syllabus, as summarised below.
  1. Use strategic planning and control models to grasp and plan and monitor organisational performance
  2. Assess and pick out, identify relevant macroeconomic, fiscal and market factors and key external influences on organisational performance
  3. Identify and evaluate the design elements and features of effective overall performance management information and monitoring systems
  4. Apply appropriate and suitable strategic performance measurement methods and techniques in evaluating and improving organisational performance
  5. Advise customers and clients and senior management on strategic business performance evaluation and on recognising vulnerability to business failure
We assume most of these capabilities and skills (if not all) to be examined to some extent in every P5 exam.

2 What skills are required?

Look at the back of at the action verbs in the six parts of the syllabus outlined above. You are expected to be in a position to assess, advise and suggest and evaluate, as well as to pick out and identify and monitor.

The need for these competencies and skills of assessing, advising and evaluating highlights that, at P5 level, you are expected to have moved beyond simply and merely demonstrating your knowledge and information of a model or technique, and as an alternative you have to apply that knowledge to practical and suitable situations. For example, the examination team will expect that, by way of the time you reach P5, you can already calculate basic financial ratios. In P5, though, the examination team will expect you to be in a position to interpret the data and information provided by these ratios to understand how an organisation and the company is performing, and to make sensible guidlines and suggestions (where appropriate) about how its performance can be be improved.

The questions set in P5 exams will be based totally round case study situations and scenarios which describe an organisation, its objectives and its business environment. You will need to relate your answers mainly to the state of affairs, scenarios given in the question. There will be very few marks available for just simply describing models or theories. Evidence from past exam sittings suggests that candidates who just simply learn models and theories, however then do not apply their knowledge and information to the question scenarios, commonly score between 20-30% in their P5 exams.

The P5 paper has a large written element, with nicely over half of the marks being earned for written answers (discussion, analysis, evaluation) instead than calculations. Again, this is designed to reflect the role and position of a qualified accountant working in a business. The accountant can expect and anticipate a number of the routine calculations and figures to be produced by way of their more junior colleagues, however the accountant need to then expect to discover and identify the problems and issues or implications being identified by means of these figures.

We have summarised here the competencies and skills you are expected to demonstrate in P5.
  1. Core knowledge. The contents of Paper F5 Performance Management – assumed knowledge and understanding brought forward for Paper P5.
  2. Numerical skills. Those skills demonstrated and tested in Paper F5. You only learn a small wide variety of new mathematical methods and techniques in this paper but, alongside these, you are also expected to take into account those you learnt previously.
  3. Written skills. These are key skills, abilities, capabilities and competencies on this paper. You will be expected to write reports and notes explaining problems and issues you encounter.
  4. Analysis and interpretation of question data and information or calculations. The examination team has stressed that candidates will be expected to analyse (not only calculate) numerical data and information given in a scenario.
  5. Wider business awareness and focus or application of skills in a practical and suitable context.

    3 Passing the P5 exam

    The examination team offers a lot of beneficial feedback in the 'Examiner's reports' to past exams. This feedback highlights areas the place students have struggled in exams, and also indicates the abilities the examination crew expects candidates to be in a position to demonstrate.

    Looking at the submit examination instruction can additionally be useful for reminding your self about necessary areas of examination technique. Therefore you are strongly encouraged to read these guides which are accessible in the 'Qualification resources' part of ACCA's website:

    The points highlighted in the put up examination instruction include the following.
    1. Read questions very cautiously and reply the question asked, not the query you hoped had been asked. In particular, if a question asks you to 'evaluate' or 'assess' the usefulness of a performance measure for assessing performance in an organisation, this is now not asking you to consider or assess the organisation's performance. Instead, the focal point of your reply ought to be on the performance measure itself.
    2. Answers which consist of rote-learned definitions or explanations with no software to the situation will rating very few marks. It is crucial that you observe your expertise to the context described with the aid of the question scenario.
    3. Look at the mark allocation to assist you manipulate your time allocation and layout your answer.
    4. Read all the components of the question before you prepare your answer, so that you avoid repeating the equal points in answering different parts of the question.

    We endorse you study the 'Examiner's strategy to P5' article posted in October 2012 and accessible on ACCA's website. This illustrates how some of the abilities required to bypass P5 have been tested in latest examination sittings, and gives some useful hints about how to approach the paper.

    Approach to the examination – In the article, the Examining group counseled that the excellent strategy to the exam can be summarised as:
    1. Cover the complete syllabus – Candidates regularly appear to over-concentrate on Section D of the syllabus (strategic performance measurement). However, it is important to recognize how, for example, the choice of performance measures matches with planning and manipulate structures (Section A of the syllabus) or how properly the measures chosen relate to external drivers of overall performance (Section B of the syllabus).
    2. Be prepared to apply your understanding of syllabus topics to a enterprise scenario – answers which furnish lists of rote-learned factors (or rote-learned advantages and negative aspects for special methods and approaches) will no longer earn enough marks to ignore a question. Candidates will be anticipated to tailor their knowledge especially to the situation given in the query scenario.
    3. Read and reply the query set – Candidates earn marks the place their solutions are technically right and relevant to the question asked. However, candidates have a tendency to write answers to the query they wish had been asked, instead than the question the analyzing group genuinely set. This approach ratings little or no credit score though.
    4. Add fee to the company that is being advised – Candidates need to reveal their potential to add value by using taking facts already produced and identifying and analysing the key problems in that statistics and the business implications of it. Candidates want to be organized to analyse numerical records given in a scenario, now not basically to operate calculations on it.
    Importantly, the article also stresses that P5 is a paper about performance management, not absolutely about performance measurement. While it is vital for an organization to measure how properly it is performing, this overall performance measurement takes location inside the wider context of strategic planning and control, and is subject to both interior and exterior elements which can have an effect on performance. In Paper P5 you need to be aware of this context and its have an impact on on performance, not absolutely how an corporation can measure performance. Performance management additionally considers how the management of an employer can be informed by means of the consequences of performance measurement; for example, thru the way in which staff are rewarded for their performance.

    Question practice

    The significance of tailoring your answer to the question absolutely set, rather than clearly rote-learning models and theories, additionally highlights the significance of question exercise in making ready for your P5 exam.

    You can enhance application skills by means of attempting questions in the BPP Learning Media Practice & Revision Kit.

    4 Brought forward knowledge

    You will be expected to construct on the skills and information you received when you studied Paper F5 Performance Management. That paper introduces matters such as budgeting and pricing that continue into the greater stage syllabus. Paper F5 additionally covers cost and management accounting techniques along with activity-based costing that you will encounter in this paper. You will also be anticipated to draw on your know-how of performance dimension and control strategies that had been introduced in this until now paper, because candidates sitting P5 will be expected to have a thorough appreciation of the F5 syllabus.

    In addition, you may be predicted to draw on subjects protected in Paper P3, Business Analysis, particularly in relation to components of strategic planning and control, and overall performance measurement.

    ACCA technical article: 'Bringing forward Paper F5 understanding and skills in Paper P5'

    There is an article in the P5 technical articles part of ACCA's internet site referred to as 'Bringing ahead Paper F5 know-how and skills in Paper P5'. The article highlights the core competencies from Paper F5 you will need to carry ahead into Paper P5, but also the differences in the depth and software of understanding required in P5 in contrast with F5. For example, instead of truly understanding the motive of the Balanced Scorecard, in P5 you would possibly be asked to consider its usefulness to an organization in a precise scenario.

    You are strongly suggested to study the article as part of your studies for your P5 exam.
    P5 (APM) - KAPLAN Study Text

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