The beginner’s guide for ACCA fundamentals

The accounting qualification offered by the Association of Chartered Certified Accountants is one of the most prestigious certifications in the world. Not only does it have global recognition, but it also opens up a variety of career avenues for professionals with the qualification. As more and more students are leaning towards acquiring this certification, universities are offering preparatory courses for ACCA to help students successfully complete the qualification. However, before you commit to a career in accounting, it is important that you understand the various ACCA course components. While the previous ACCA course structure was made up of two parts – the fundamental level and professional level, the qualification was recently redesigned to consists of three elements, namely:

  • ACCA exams;
  • Ethics and professional skills module;
  • Professional Experience Requirement (PER).

The ACCA exams are further divided into three categories – applied knowledge, applied skills and strategic professional exams. The previous fundamental exams have been divided into the categories of applied knowledge and applied skills exam. Let’s delve deeper into the components of these categories.

What does the ACCA fundamental exam entail?

The Applied Knowledge exams comprise of the following papers:

  • Accountant in Business (AB);
  • Management Accounting (MA);
  • Financial Accounting (FA)

The Applied Skills exams comprise of the following papers:

  • Corporate and Business Law (LW);
  • Performance Management (PM);
  • Taxation (TX);
  • Financial Reporting (FR);
  • Audit and Assurance (AA);
  • Financial Management (FM).

Accountant in Business (AB): Previously called the ACCA F1 paper, this component familiarises students with the business world and helps them understand how accounting works within a global business structure. The exam focuses on evaluating students’ knowledge of accounting systems, fundamental business legislation, leadership and communication, internal control principles, governance and the environment.
Duration: 2 hours
Format: Paper-based exam (PBE) or Computer-based exam (CBE)

Management Accounting (MA): This module of the applied knowledge exams introduces students to business management and management accounting principles such as costing techniques, budget management, variance analysis and cost control.
Duration: 2 hours
Format: PBE or CBE

Financial Accounting (FA): This module emphasizes preparing financial statements, helping students to prepare single entity as well as consolidated financial statements. The statements covered will include cash flow statements, financial positions statements and financial performance statements.
Duration: 2 hours
Format: PBE or CBE

Corporate and Business Law (LW): In this module, students learn about the functioning of legal systems, especially within the context of business-related laws. In addition to understanding the general legal framework, students will also develop skills to identify situations when specialist legal advice must be sought.
Duration: 2 hours
Format: PBE, CBE (only for F4 English and Global)

Performance Management (PM): This section builds on the knowledge acquired in the applied knowledge module of Management Accounting (MA), helping students develop skills for better business management.
Duration: 2 hours
Format: PBE

Taxation: This module helps students understand the underlying principles of taxation and its technical areas. It covers concepts such as value added tax, corporate tax, income tax and inheritance tax.
Duration: 3 hours
Format: PBE

Financial Reporting (FR): In this module, students learn in depth about the skills and knowledge they acquired in the Financial Accounting module of applied knowledge exams. This paper helps students prepare consolidated financial statements and tests students’ ability to assess business performance through those financial statements.
Duration: 3 hours
Format: PBE

Audit and Assurance (AA): The focus of this module is on the objective, process and results of auditing. The paper covers areas such as audit objectives, ethical issues that businesses might encounter in the process of an audit, as well as looking at the complete audit process and audit reports. During this module, students will implement this knowledge to practical use, for instance, in identifying audit risks and understanding the after effects of audit findings.
Duration: 3 hours
Format: PBE

Financial Management (FM): This paper analyses the financial aspects of a business such as discounted cash flow and inventory control. It equips students with skills to assess a business situation, as well as the influence of financial decisions on the efficiency of business operations.
Duration: 3 hours
Format: PBE

How to prepare for the ACCA exams:

Step 1: Before you sit your ACCA exams, it is important to have a well-structured plan in hand. Ask yourself about the number of papers you are going to take and the amount of time you would like to allocate to prepare for each of the papers.

Step 2: Once you have decided the number of papers are going to sit, design a timetable or study plan. Allocate more time to subjects you think you need to work on, making sure not to completely forget to look at the subjects you are good at too. Ensure that you have enough time to revise all the subjects before the actual exams.

Step 3: Look into what the course entails to ensure you have a vivid idea about the syllabus and the course structure.

Step 4: A good timekeeping tip is to set daily goals for yourself. This will leave you with the feeling of accomplishment which is a great motivation for students.

Step 5: Refer to and study from only ACCA-approved study material. The resources made available by ACCA are perfectly organized to suit the study needs of students. Moreover, the syllabus is well-defined and well-planned.

Step 6: In order to successfully complete the ACCA exams, it is essential that you develop a deep understanding of the underlying concepts. Having a clear idea of the logic behind each concept within the modules will help you answer better in the exams.

Step 7: To get a better idea of how difficult the exam papers will be and what kind of questions will be asked in the exam, practice the mock test papers. This will also help you in improving your time management skills.

The ACCA exams are conducted in four sittings across the year. Students are allowed to take up to eight ACCA papers within one year. Within one exam sitting, a student can only take four ACCA papers. It is therefore important to plan your schedule carefully before you start preparing for the papers you are going to sit. If you want to take up a preparatory course to help you gain the ACCA qualification, you have come to the right place. Toronto School of Management (TSOM) offers a Preparatory Course for ACCA Examination to help students easily crack the ACCA qualification.

Read also: What are the last-minute study tips for ACCA?