Introduction

1 What P5 is about The syllabus for Paper P5 further develops key aspects and skills introduced in Paper F5, and it draws on aspects of the material about strategic and operational planning and performance covered in Paper P3, Business Analysis !owever, whereas Paper P3 only assesses principles of management accounting as part of the wider analysis of a business situation, Paper P5 could e"amine aspects of management accounting # such as budgeting or costing techni$ues # in their own right The stated aim of the P5 syllabus is: %To apply relevant knowledge, skills and e"ercise professional &udgement in selecting and applying strategic management accounting techni$ues in different business conte"ts and to contribute to the evaluation of the performance of an organisation and its strategic development ' (ead this aim carefully )ou are no longer &ust a 'number cruncher' drawing up budgets and producing management reports )ou are e"pected to understand the wider issues that affect organisations These issues are often written about in newspapers and &ournals such as the Financial Times and the *conomist +o you do need to keep up to date with your professional reading and be aware of the world around you At this high level, you also need to see how the sub&ects you previously studied begin to fit together and begin to take a birds,eye view of the organisation -mportantly, P5 will also test your ability to assess different approaches to performance management from a variety of perspectives As well as knowing what the approaches are, you will also need to be able to compare them with one another in the conte"t of a scenario. for e"ample, the comparing the long,term and short,term issues affecting an organisation/s performance +napshot of the syllabus The syllabus e"pects you to understand how organisations set their strategy and the e"ternal influences that affect strategic plans and operational outcomes )ou are e"pected to evaluate different systems of performance management and apply strategic performance measurement techni$ues in evaluating and improving performance )ou are e"pected to advise on strategic performance evaluation and the possibility of corporate failure Finally you are e"pected to be aware of the current developments in management accounting and performance management as these affect organisations There are six parts to the syllabus and we outline these below. 0a1 2se strategic planning and control models to plan and monitor organisational performance 0b1 Assess and identify relevant macro economic, fiscal and market factors and key e"ternal influences on organisational performance 0c1 -dentify and evaluate the design features of effective performance management information and monitoring systems 0d1 Apply appropriate strategic performance measurement techni$ues in evaluating and improving 3

organisational performance 0e1 Advise clients and senior management on strategic business performance evaluation and on recognising vulnerability to corporate failure 0f1 -dentify and assess the impact of current developments in management accounting and performance management on measuring, evaluating and improving organisational performance 4e e"pect most of these capabilities 0if not all1 to be tested to some e"tent in every P5 e"am 2 What skills are re uired! (efer to the syllabus outline in part 3 above 5ook at the action verbs identified there )ou are e"pected to be able to assess, advise and evaluate, as well as to identify and monitor These are the skills that you are e"pected to demonstrate in the e"am )ou have moved beyond merely demonstrating your knowledge of a model or techni$ue For e"ample, the e"aminer e"pects you to know financial ratios already !e is looking at evidence of being able to apply this knowledge and come to intelligent conclusions that you can communicate effectively The $uestions set in P5 e"ams will be based around case study scenarios which describe an organisation, its ob&ectives and its business environment )ou will need to relate your answers specifically to the scenario given in the $uestion, and not simply describe models or theories The paper has a large written element, with well over half the marks in P5 being earned for written answers 0discussion, analysis, evaluation1 rather than calculations 4e have summarised here the skills you are e"pected to demonstrate in P5 0a1 6ore knowledge The contents of Paper F5 Performance 7anagement 0b1 8umerical skills Those skills demonstrated in Paper F5 )ou don't learn any new mathematical techni$ues in this paper but you are e"pected to remember those you learnt previously 0c1 4ritten skills These are key skills on this paper )ou will be e"pected to write reports and notes e"plaining issues you encounter 0d1 Analysis and interpretation of $uestion data or calculations The e"aminer has stressed that candidates will be e"pected to analyse 0not merely calculate1 numerical data given in a scenario 0e1 4ider business awareness or application of skills in a practical conte"t

" #ow to impro$e your chances of passin% The e"aminer provides a lot of useful feedback in his e"aminer's reports This feedback highlights areas where students have struggled in e"ams, and also indicates the skills the e"aminer e"pects candidates to be able to demonstrate 5ooking at the post e"am guidance can also be useful for reminding yourself about essential areas of 9

e"am techni$ue Therefore you are strongly recommended to read these guides which are available on A66A/s website: http:;;www accaglobal com The points highlighted in the post e"am guide include the following: 0a1 (ead $uestions very carefully and answer the $uestion asked, not the $uestion you hoped had been asked -n particular, if a $uestion asks you to %evaluate/ or %assess/ the usefulness of a performance measure for assessing performance in an organisation, this is not asking you to evaluate or assess the organisation/s performance -nstead, the focus of your answer must be on the performance measure itself 0b1 Answers which consist of rote,learned definitions or e"planations with no application to the scenario will score very few marks -t is vital that you apply your knowledge to the conte"t described by the $uestion scenario 0c1 5ook at the mark allocation to help you manage your time allocation and plan your answer 0d1 (ead all the parts of the $uestion before you prepare your answer, so that you avoid repeating the same points in answering different parts of the $uestion 4e recommend you read the article %2pdated e"aminer's approach to Paper P5/ published in February 9<33 and available on A66A/s website This illustrates how some of the skills re$uired to pass P5 have een tested in recent e"am sittings, and provides some useful hints about how to approach the paper -mportantly, the e"aminer/s article also stresses that P5 is a paper about performance management, not simply about performance measurement 4hilst it is important for organisations to measure how well they are performing, this performance measurement takes place within the wider conte"t of strategic planning and control, and is sub&ect to both internal and e"ternal factors which can affect performance -n Paper P5 you need to be aware of this conte"t and simply how an organisation can measure performance considers how the management of an organisation can be informed by the results of e"ample, through the way in which staff are rewarded for its impact on performance, not Performance management also performance measurement. for their performance