One of the reasons the ACCA Advanced Financial management (AFM) is a challenging exam is that the overall pitch of the syllabus is at a master's level or a postgraduate level.
The pass rates for the AFM exams range between 36% to 42%
So it is expected that you will be able to perform various calculations and give serious value-adding advice as expected of a senior financial advisor.
So although this builds on financial management, which you may have done earlier in your studies, it's very different. It expects much more from you, and the syllabus will contain little. That's completely new but will take things you've studied before to a much higher level.
What skills are tested in the AFM exams?
AFM tests you on the following four professional sills
What foundational knowledge is required for the AFM exams?
You must have a good foundation in financial management—paper from the skill level. AFM builds on the assumption that you have strong knowledge of the basic calculations, learning materials and concepts from the Financial management paper. Strong knowledge in FM would imply an easy 30-35% mark already built in your AFM paper.
The ACCA examination regularly points out that the students who are unsuccessful in the exam fail because they don't have some of the basic capabilities that come forward from FM. Like being able to inflate cash flows, deal with capital allowances, taxation payable etc. For example, the following topics get covered in more detail from the FM paper to AFM.
- Investment appraisal: Students would have learnt concepts of net present value, internal rate of return & sensitivity testing.
- Treasury management: In FM, students learn the basics of currency and interest rate risk. In AFM, the concepts are built in more detail, where you got to be able to use derivative products to be able to use against risk exposures.
Before attempting the AFM, students must brush up on their knowledge from the Financial Management papers.
How different is the AFM paper from the FM
One of the significant differences at the strategic professional level is the expectation that you will be able to apply your knowledge to a given scenario. So when you're doing the FM exam, there will be specific requirements regarding what the examiner wants you to do. While in the AFM, the needs of the question leave it up to you to decide what techniques are appropriate for you to come up with calculations.
In AFM, you're advising a company, so instead of asking you to calculate NPV, you might be asked to evaluate a scenario. Then, it's up to you to decide which evaluation technique might be most appropriate.
The other difference you will find at the AFM level is that they use case studies or scenario-based questions. You will be required to answer using various appropriate techniques and justify them.
Five essential tips for scoring high on your AFM
- From Sep 2022 exams, 20 per cent of the marks are available for demonstrating professional skills. Focus on this area to score high
- Don't only treat it as a maths exam; nearly 50% of your marks are for explaining concepts. Focus equally on both numerical and explanation elements of the exam
- Time management is critical. Practice a minimum of 50 questions prior to the exam dates.
- Refrain from doing question spotting from prior exams. Go through the entire syllabus.
- Refer to the AFM technical articles and practice from ACCA-approved books before the exams.
Which are the best study resources for the AFM exams?
We recommend the following critical study resources.
- ACCA AFM Technical articles. These are written by the ACCA exam teams and are a handy revision guide.
- Examining team guidance reports: This gives you feedback on mistakes that students make in prior exams.
- AFM Online course: Take the AFM online course from BPP. These powerful pre-recorded lectures from BPP UK Faculty give you complete syllabus coverage, revision lectures and CBE software with a mock exam to practice.
- AFM past papers: Practice these for revision and time management.
ACCA Exams are held four times a year for skill level and strategic level exams. These are held every quarter
March, June, September and December
The CA (Chartered Accountant) qualification is offered by the Institute of Chartered Accountants of India (ICAI). The ACCA qualification is offered by the Association of Chartered Certified Accountants (ACCA).
The CA qualification has been in existence for over 150 years, and is a globally recognised qualification. The ACCA qualification has been in existence for over 100 years, and is also a globally recognised qualification.
The CA qualification is available in India only, while the ACCA qualification is available in over 180 countries.
The ACCA subjects are assessed on a 100-point scale. The pass mark is 50 points. A score of 60 or more is required to achieve the grades of distinction, credit, and merit.
Yes. Passing all exams with a high percentage is an excellent accomplishment and demonstrates that you have a high level of understanding of the material. Employers will see this as evidence of your competence and be likely to consider you for a position if you are looking for work in the accounting field.
The hardest ACCA paper is the F5 performance management paper. This is because it requires a detailed knowledge of financial accounting and management accounting in order to pass.
Other papers that are difficult include the F7 financial reporting paper and the P2 advanced auditing and assurance paper. However, all of the ACCA papers are challenging, so it is important to thoroughly prepare for each one before sitting the exam.