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From Russia with Love…to ACCA AFM students!

13 August 2018

The England football team had a brilliant World Cup. For an avid football supporter like me, I was expecting very little from them. However, their performances and positive attitude was refreshing to watch and excited the nation. It’s almost like the poor performances of the past were banished from our memories.
A very similar, but obviously less well reported situation, also occurred in 2018. One that will have great benefit to ACCA students taking their option papers from September 2018 onwards. What was this event? Well, it was that the ACCA P4 paper, now called Advanced Financial Management (AFM), transformed its image from being the so called impossible paper to one that is the exam YOU MUST DO if you want the best chance to qualify.
Let me explain how I have arrived at my view. ACCA P4 has had a reputation of being a paper for students to avoid when choosing the option papers to sit to complete their ACCA studies. This is based partially upon fact and partially on fiction. Yes, the early exams from 2007 to 2010 were very challenging including the infamous paper of June 2009. That paper can best be described as being like the students were a Sunday League amateur football team and the examiner/exam team was the great Brazil side of 1970 (check YouTube!). Only one result possible!
Things improved from December 2010 when a new examiner (now its an examining team) was appointed. The exam questions were better and the requirements were clearer and less ambiguous. In addition, a series articles appeared on the ACCA website giving students extra guidance (for the record, I have written six of these and four are still on the ACCA website). Topics contained in these articles were then tested in the following papers which is still true today as you will see below.
The move to a one x 50-mark compulsory question and two from three x 25-mark questions format from 2013 removed some of the time pressure. However, the global pass rates were still very low averaging approximately 34% up to and including the December 2017 sitting. There are many reasons for this including students not being properly prepared and a lack of courses/ support being provided by specialist experienced P4 tutors.
Two points regularly mentioned by candidates post the exam were that the exam was too lengthy and they were asked to do far more than the time allowed. Also, there was an imbalance in the mark allocation between the computational (more difficult) and written (easier) elements within the paper. To be fair, these criticisms are valid.
So, what has happened this year to change this? Why did the pass rate for the March 2018 session increase by a full 8 percentage points compared to the December 2017 paper and have the highest option paper pass rate? I expect the latter to repeat when the June pass rates are published next week. The answer is simple. The questions on the last two papers have been very fair and given students a really good chance to pass.
For the March exam, three questions are in the latest published sample paper including the Q1 from that exam. All three questions were relatively straightforward in comparison to the previous tests. The exam topics came from the ‘five cores’ of P4. More importantly, the balance between the computational and written elements allowed candidates a far better chance to finish the paper which has not applied in the past. Did this pattern continue for the June exam?
Well, I am happy to say it did. You can simply ditto my positive comments above when referring to all four questions on the published June 2018 exam. In addition, the June paper had two questions which would have benefitted those candidates who had read the published articles on Real Options and Interest Rate Risk Management. The latter article only came out in the quarter leading up the June exam.
Reading between the lines, I get the feeling that there had been a definite change of style in these two papers compared to those set in the past. Maybe they were written by a new member to the examining team – their equivalent to England’s Gareth Southgate?
The omens are good for those sitting the new AFM exam in September. There is no reason to expect the recent trend not to continue. Add to this that the one change is to the paper format (1 x 50 marks and 2 x 25 marks) can be considered as a positive one. No choice means no regrets that you chose the wrong question on the day.
So just the England team surprised us on how well they played in Russia, the two ACCA P4 papers set this year have given us positive vibes for the forthcoming new AFM exam. Be properly trained for the AFM paper and you will score that winning goal.

Sunil Bhandari
Freelance Tutor – |ACCA FM|ACCA AFM|CIMA F3|

Check out https://www.fmelearnonline.com

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