ACCA FA Free Examiners' Guide
ACCA FA Examiners’ Guide

At Fundamentals level you need to demonstrate a good understanding of the main areas of financial and management accounting. To do this you must demonstrate to the examiner that you have mastered the technical skills of accountancy.

This guide summarises the key issues that examiners have highlighted in recent reports. In particular, it identifies the areas where students have performed poorly and where future students need to give more focus.

We strongly recommend that you take heed of this information as it comes from the people who will decide whether you pass or fail!

Find the full list of Examiners’ Reports on the ACCA website here: ACCA FA Examiners’ Reports


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1.   Format of key financial statements

Much of the most recent criticism provided by the examiners’ reports actually centres around a very simple element of the F3 syllabus: the format of key financial statements. This is the bread and butter of financial reporting, and is something you should be getting a really firm understanding of at this stage in your ACCA studies.

Here are some quotes from examiners:

“Candidates are often unsure of the correct format in which to present their answer…” – FA Examiner’s Report – June 2015

“Overall, many candidates might still be able to improve their marks by learning the format of the key financial statements…” – FA Examiner’s Report – December 2014

“Candidates should also ensure that they are familiar with the layout of the key financial statements.” – FA Examiner’s Report – June 2014

ACCA FA Free Examiners' Guide

It is quite possible that students are overlooking the simple aspect of formats in order to learn the more complex areas of the syllabus, such as consolidations. However, it is far more beneficial to pick up easy marks by getting the format of the key financial statements correct, than to struggle with more complex areas that can be time consuming and still be incorrect!

The key financial statement layouts that you need to know are:

• The Statement of Financial Position

• The Statement of Comprehensive Income

• The Statement of Changes in Equity

• The Statement of Cash Flows

The formats for each of these are set out in IAS 1, and this is absolutely core knowledge for F3 Financial Accounting, as well as in F7 Financial Reporting and P2 Corporate Reporting. Learn the basics now so they aren’t an issue in these later papers too!

2. Application of accounting techniques

Another recent criticism along the same vein is students’ lack of ability to apply core accounting techniques. The examiners’ reports specifically stated:

“Candidates are often unsure […] how to apply various accounting techniques. Neat and logical workings should always be presented so that marks can be awarded for method, even if the final answer is wrong.” – FA Examiner’s Report – June 2015

“Candidates should ensure that they have a good understanding of double entry book-keeping and how an adjustment made in the statement of profit or loss might impact elsewhere.” – FA Examiner’s Report – June 2014

“…candidates […] must also devote appropriate attention to other areas of previously acquired knowledge, such as sales tax, discounts and accounting journals, during their studies and exam preparation time.” – FA Examiner’s Report – June 2013

ACCA FA Free Examiners' Guide

The examiner specifically mentions double-entry bookkeeping, which is another core topic for financial accounting. All techniques involving ledger accounts and maintaining the bookkeeping system form the basis of financial accounting, and so this knowledge will be expected in the exam.

Not only do students overlook the format of key statements, they also overlook how to perform basic accounting techniques for more complex topics such as consolidated accounts.

The problem is that double-entry is one of those things that still trips up even the most qualified accountants, because it is a slightly counter-intuitive technique. However, mastery of this technique at an early stage will make future financial accounting papers much easier to deal with.

Similarly, students should develop a strong knowledge of all the basic accounting techniques, including adjustments, recognitions, measurements, depreciation etc, since everything is built on these foundations. It is really worth taking the time to get to grips with these basic techniques.

3. Consolidation techniques

It has been mentioned a few times already, but consolidation was bound to show up in the Examiner’s Report! The much hated consolidation of accounts for business combinations and associates is something that any accounting student will struggle with at some point in their studies.

Here are some of the examiners’ remarks on the topic:

“A thorough understanding of consolidation techniques is also required, including the calculation of key figures such as goodwillnon-controlling interests and retained earnings.” – FA Examiner’s Report – June 2014

“…candidates clearly need a thorough understanding of the core areas of consolidation, preparation of financial statements and interpretation of accounts…” – FA Examiner’s Report – December 2013

ACCA FA Free Examiners' Guide

The key to answering consolidation questions well is making sure that you understand the concepts which underpin consolidation. Don’t skip the ‘Introduction to Group Accounts’ chapter! In many ways, this is the most important chapter in the Study Text. The key things to grasp are:

• Goodwill – the difference arising between the consideration paid for an entity, and the fair value of the net assets of the entity.

• Non-controlling interest – the remaining interest in a subsidiary under a partial acquisition.

• Retained earnings – the cumulative profits retained by the company over time.

There is no getting around it! Consolidation is part of the syllabus, and you are likely to get a question on some area of it. The trick is to understand the basics, and then the more complicated aspects will not be so difficult.

4. Show your working

As I’m sure you were told in your maths class in secondary school, “Always show your workings.” The same applies to your ACCA FA exams as it is an easy way to pick up marks. Here is what the examiner had to say about it:

“Neat and logical workings should always be presented so that marks can be awarded for method, even if the final answer is wrong.” – FA Examiner’s Report – June 2015

“Candidates’ answers often lacked clear logical workings. Therefore, candidates are reminded that, if they show their workings and get the answer wrong they can still gain some marks. However, when the answer is wrong and there are no workings then no credit can be given for the method applied.” – FA Examiner’s Report – June 2014

ACCA FA Free Examiners' Guide

So the first thing here is to be systematic in your approach to answering questions. In most cases you can break a question down into steps, and this is especially the case if you are asked to produce financial statements. If you  set out your workings in a logical way, then you may get marks for using the right method even if you miscalculate the numbers.

If you are not showing your workings, then not only will you not show the examiner that you got to your answer in a logical way, but you may also get the answer wrong and there will be nothing the examiner can do other than give you no marks!

5. Apply your knowledge

Being able to do well in the exam does not only mean learning core syllabus topics, but being able to apply principles of accounting to new scenarios based on your acquired knowledge.

This it what the examiners had to say about it:

“Question practice of objective test questions and longer questions to test understanding are vital in helping candidates to learn and understand topics and to enable them to apply their knowledge to any questions presented to them.”  ACCA FA Examiner’s Report – December 2013

“In preparation for this exam, it is essential that students do not try and rote learn syllabus/subject areas and that they practise questions which will help them understand the topics and enable them to apply their knowledge to any questions presented to them.”  ACCA FA Examiner’s Report – December 2012

ACCA FA Free Examiners' Guide

The issue appears to be that students are using up too much of their study time learning from specific examples. The problem is that the student can answer this one question really well, but has failed to grasp the underlying principle that will help them answer similar questions on the same topic.

Therefore, as a student you should ask yourself the following questions:

“Do I really understand the principles of this topic, or do I just know how to answer this specific question?”

If your answer is the latter, then you need to make sure you can apply your knowledge to new scenarios!

6. Manage your time

In recent reports, examiners have encouraged students to focus on improving their time management skills. It is vital that students attempt all questions in the exam to ensure they maximise their chances of passing.

This is what the examiners had to say:

“Overall, many candidates might still be able to improve their marks by […] focusing on their exam technique. Candidates should carefully manage their time to ensure that all questions are answered.”  ACCA FA Examiner’s Report – June 2015

“Candidates should carefully manage their time to ensure that all questions are answered.” – ACCA FA Examiner’s Report – June 2015

Overall, many candidates might still be able to improve their marks by […] focusing on their exam technique so that all questions are answered.” – ACCA FA Examiner’s Report – December 2014

ACCA FA Free Examiners' Guide

As with all exams, good time management is directly correlated with good performance. Leave yourself too little time and you will either fail to give a question the time it needs, or worse, not answer it at all!

Do not spend too much of your time on early exam questions. This can often result in rushed answers towards the end of your exam.

One strategy might be to ‘sweep’ the exam paper and quickly answer all the questions where the answer is known straight away. Then go back and focus more time on those questions requiring greater thought.

There is no substitute for practise to improve your time management skills. It’s recommended that you attempt at least three exam papers against the clock prior to the exam. Don’t leave it until the real exam to test your time management – a big mistake!

7. Read the question carefully

Students must take care to read the question carefully in the exam. This is the easiest way to lose marks. Examiners have identified this as an ongoing issue across a number of sittings:

“Candidates should read the question carefully and follow the instructions contained therein. For example, some questions will tell you to use $’000 or $m. Others will give you instructions to ignore brackets or signs when entering negative numbers. Note also that where a pro-forma answer shows headings such as “Less: cost of sales”, that no minus sign or brackets should be put round the figure as the heading already indicates that the figure is negative. In questions requiring the preparation of statements of cash flows, all figures should be entered as positive and there are drop down lists for candidates to indicate whether the figure is positive or negative.” – ACCA FA Examiner’s Report – June 2014

“Candidates need to read the questions carefully to determine if the figures are inclusive or exclusive of sales tax. It also involves realising that the cash payments to suppliers would not have any sales tax accounted for at that point in time…” – ACCA FA Examiner’s Report – December 2013

ACCA FA Free Examiners' Guide

So, as you can see, this is a vital but obvious issue to consider in your preparations for the exam. Take time to read the question slowly and at least twice. Identify the key words as this will help you to understand what answer the examiner is looking for.

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