P papers: which to choose?

I am regularly asked by students approaching their ACCA professional papers about which option papers they should choose.

Students must select two out of the four professional optional papers: APM Advanced Performance Management; AFM Advanced Financial Management; ATX Advanced Tax; and AAA Advanced Audit and Assurance.

For many, the choice is simple. As one of our students remembers: “My first stage of selection was elimination. I was never going to do AAA. I have no idea how I got through F8 (AA)!”

For some, it’s a question of aligning their studies to their work; for others it’s a matter of choosing subjects that they will enjoy and options where they’ll hopefully achieve exam success.

Some students are worried about the impact of their choices on their CV, but they should rest assured that future employers will be looking for the ACCA badge and be more concerned with their practical experience.

With pass rates dipping as low as 29% and peaking at 41%, these exams are specialist and are not going to be easy. So what to choose?

APM Advanced Performance Management

Exam SittingJun ’18Sep ’18Dec ’18Mar ’19
Global Pass Rate35%33%33%32%

This paper wants students to look at key ways of assessing business performance and to develop skills and techniques relating to strategic performance, management techniques and systems. You should be prepared to address issues at strategic and operational levels and to understand the connections between the two.

You will need to be numerical, comfortable with both PM and FM and possess good written and analytical skills. Passing the exam requires you to write good answers to the ones set and not the ones you wish you had been asked.

Why choose APM? “Strategy is an area I work in,” said one of our students, while another claimed they “loved the subject area and the tutor was brilliant!”

AFM Advanced Financial Management

Exam SittingJun ’18Sep ’18Dec ’18Mar ’19
Global Pass Rate40%35%41%35%

This paper wants you to take FM further and expand on areas you’re familiar with, such as investment appraisal. A large part of the paper centres on risk management, with particular focus on currency and interest rate hedging.

Topics are considered in the overseas and home context; acquisitions and valuations are looked at, with reasons why some acquisitions work and some don’t. Among other areas, AFM will look at how investment is financed, take WACC further and look at how cost of capital is derived for a firm’s credit rating.

Students will need to be very good numerically but not a top mathematician. As our tutor often reminds students, he has a grade C in maths A-level and he can do it. You will need robust written skills, to be comfortable with equations and, very importantly, be aware of current business affairs.

Why choose AFM? “I chose this paper as I wanted to learn more about the commercial aspects of accountancy. I wanted to know how accountancy was used in more than just the traditional roles,” said one AFM student.

ATX Advanced Taxation

Exam SittingJun ’18Sep ’18Dec ’18Mar ’19
Global Pass Rate40%30%40%33%

This paper helps you progress from being a tax comp number-cruncher to an analytical, professional tax adviser. You will need to produce notes, emails and reports for your manager or client, and be able to give practical advice in various real-life scenarios in which several types of interacting taxes must be considered and analysed.

While calculations are not completely abandoned, you will need to be able to clearly explain and justify your computations and, ultimately, provide some robust tax planning advice to both individuals and businesses. You should be numerical, logical, have good written skills and be prepared to learn a large volume of material.

Why choose ATX? “This is seen as a hard exam. I wanted the achievement of passing it on my record,” said one studier. “I weirdly like tax,” admitted another ATX student.

AAA Advanced Audit and Assurance

Exam SittingJun ’18Sep ’18Dec ’18Mar ’19
Global Pass Rate34%30%31%30%

For any students who do not like writing this paper is to be avoided. The only potential use of your calculator is to work out a couple of ratios or perhaps the time allocated to each question. Assessing risk in the three key areas of business, audit and material misstatement is a common feature in the paper.

You will need to challenge every piece of information and make sure you apply your knowledge to the scenario. You will also be required to bring forward both FR and AA knowledge from previous studies and be prepared to communicate concisely, keeping time management in mind at all time.

Why choose AAA? “I wanted to understand the impact and implications of audit from the auditor’s and the business’s perspective,” said one current AAA student.

The option papers remain consistently challenging to pass. You should be prepared to dedicate many hours of study to these papers and so ideally should opt for a subject you vaguely enjoy. If you’ve been doing self-study up to this point, it is now worth considering getting the valuable guidance of a tuition provider. As Alan Hatfield of ACCA said: “The pass rates for students attending approved learning providers, combined with ACCA’s own resources, are much stronger than for those who do not.”

Do not be too overwhelmed with your choice. As one of our recently qualified students said: “P papers are just big F papers and sometimes so big they take a couple of goes to pass!”

• Liz Hulls is a director and tutor at Vale Financial Training