Nick Craggs provides an overview of the content of the new AAT L4PAT qualification.
AAT’s new level 4 qualification (called L4PAT) has some of the biggest changes to the AAT qualification in many years. There are no written tasks at level 4 anymore and that means you get your results within 24 hours – well, you will when there have been enough assessments taken. Initially, there will be a delay on the release of results.
However, do not mistake the lack of written tasks for the exams being easier. It is still a level 4 qualification. The other big change is that there are no optional units. All students will do the following five mandatory units:
Financial Accounting (FNAC)
This unit focuses on the skills required to prepare the financial statements for a single limited company. Students will be able to prepare a statement profit and loss, statement of financial position, statement of cashflows and statement of changes in equity. Students will also gain an understanding of international accounting standards.
This unit will give students the tools required to analyse financial statements through ratio analysis. The unit follows on from the level 3 Financial Accounting: Preparing Financial Statements. As such, you need to be comfortable with adjustments such as accruals, prepayments and depreciation, as these are assumed knowledge at level 4.
Management Accounting (MNAC)
In this unit students will understand the creation of budgets and be able to assess business performance against budget.
Students will also be able to assess both short-term and long-term decision-making in a variety of methods. It also looks at how a business might manage its cashflow. The unit follows on from Management Accounting Techniques at level 3, so you need to be comfortable with things such as cost behaviour and budgeting. However, spreadsheets are not assessable at level 4, so you don’t need to use that knowledge from level 3.
Audit and Internal controls (ATIC)
This unit brings together the Audit and Internal Controls unit from Q22. Students will learn about the purpose of control procedures and how to evaluate and test these controls effectively.
This unit also covers the entire audit procedure from planning and risk assessment, both tests of controls and substantive testing, to the final production of the audit report. Students will then be able to review and report in the audit findings.
This unit doesn’t follow on from any other unit at level 3. While there isn’t a set order to study the units on the L4PAT qualification, I would suggest you study this unit after the Financial Accounting one. This means that you will understand what the accounts that you are auditing look like.
Principles of Taxation (PTAX)
This unit combines the current Personal Tax and Business Tax units from the previous Q22 syllabus. Students will be able to calculate a taxpayer’s income from employment, self- employment, property and investments.
Students will then be able to calculate the tax and national insurance due on this income.
This unit also introduces students to calculating capital gains and losses and the capital gains tax due on them. Students will also learn to calculate the taxable profit for a limited company and the corporation tax due on it. You may be thinking this is where I tell you this unit follows on from the Tax Processes for Business unit at level 3.
Well, it doesn’t really. That unit mainly focuses on VAT, whereas this unit covers the previously mentioned income tax and corporation tax.
Advanced Business Awareness (AVBA)
This unit prepares students for the real business world and the challenges and opportunities they will face. Students will learn how businesses define their strategies, visions and objectives.
They will also learn the difference between ethics and law, and how to deal with ethical and legal issues. They will learn how to manage data and use it to make better decisions.
Students will also get an understanding of the need for sustainability and EDI in the workplace.
The unit also covers economic factors facing businesses such as interest rates, inflation, supply and demand and international trade.
This will probably come as no surprise, but this follows on from Business Awareness at level 3.
You will need to brush up on your knowledge on the Fundamental Principles and money laundering.
There are some subjects that were in the Q22 qualification which are no longer assessable, as AAT have mapped the new qualification to what accounting technicians are doing in the workplace in today’s world. Personally, I am sad to see inheritance tax go, as I am no longer able to bring in my inheritance tax example of Richard Burton and encourage students to watch the classic 1960s war film ‘Where Eagles Dare’. However, I am not so sorry to see transfer pricing and linear regression being no longer assessable.
- Nick Craggs, AAT distance learning director, First Intuition
