ACCA-PM – Performance Management

Teacher

Course description:

ACCA PM – Performance Management is one of the six skill level papers of ACCA which aims to develop knowledge and skills in the application of management accounting techniques to quantitative and qualitative information for planning, decision-making, performance evaluation, and control.

The syllabus for Paper PM, Performance Management, builds on the knowledge gained in Paper MA, Management Accounting and seek to examine candidates’ understanding of how to manage the performance of a business. It also prepares candidates for more specialist capabilities which are covered in APM Advanced Performance Management.

The syllabus begins by introducing more specialized management accounting topics. There is some knowledge assumed from Paper MA – primarily overhead treatments. The objective here is to ensure candidates have a broader background in management accounting techniques.

The syllabus then considers decision-making. Candidates need to appreciate the problems surrounding scarce resource, pricing and make-or-buy decisions, and how this relates to the assessment of performance. Risk and uncertainty are a factor of real-life decisions and candidates need to understand risk and be able to apply some basic methods to help resolve the risks inherent in decision-making.

Budgeting is an important aspect of many accountants’ lives. The syllabus explores different budgeting techniques and the problems inherent in them. The behavioral aspects of budgeting are important for accountants to understand, and the syllabus includes consideration of the way individuals react to a budget. The preparation of fixed, flexible and incremental budgets is assumed knowledge from MA.

Standard costing and variances are then built on. All the variances examined in Paper MA are assumed knowledge in PM. Mix and yield variances, and planning and operational variances are explored here and the link is made to performance management. It is important for accountants to be able to interpret the numbers that they calculate and ask what they mean in the context of performance.

The syllabus concludes with performance management systems, measurement and control. This is a major area of the syllabus. Accountants need to understand how a business should be managed and controlled and how information systems can be used to facilitate this. They should appreciate the importance of both financial and non-financial performance measures in management. Accountants should also appreciate the difficulties in assessing performance in divisionalised businesses and the problems caused by failing to consider external influences on performance. This section leads directly to Paper APM.

All of the subject areas covered in this syllabus could be examined in either a public sector or private sector context. This papers is assessed by 3 hours computer based examination (Session CBE) and examines both computational and interpretational skills. The pass mark is 50%.

Learning outcomes:

On successful completion of this paper, candidates should be able to:

Explain and apply cost accounting techniques
Select and appropriately apply decision-making techniques to facilitate business decisions and promote efficient and effective use of scarce business resources, appreciating the risks and uncertainty inherent in business and controlling those risks
Identify and apply appropriate budgeting techniques and methods for planning and control and use standard costing systems to measure and control business performance and to identify remedial action
Identify and discuss performance management information and measurement systems and assess the performance of an organization from both a financial and nonfinancial viewpoint, appreciating the problems of controlling divisionalised businesses and the importance of allowing for external aspects

Certification:

Students are awarded “Advanced Diploma in Accounting and Business” when they have successfully completed (either passed or exempt) Papers LA-FM. A positive result is required for all nine BT to FM papers in order for the Advanced Diploma in Accounting and Business certificate to be awarded.