ACCA P5 has the lowest global pass rate of any ACCA paper. Every year, students make the same mistakes and end up failing the paper. Mistakes, says ACCA specialist Peter Woolley, that could easily have been avoided. The author behind our ACCA P5 course, Peter has 15 years’ experience helping students like you pass ACCA P5. We sat down with him and picked his brains…
If you want to pass the ACCA P5 exams, you need to read this.
Introducing…. ACCA P5 Tutor Peter Woolley
LS: Hi Peter, thanks for making time to have a chat!
P.W: You’re more than welcome; I’m happy to help.
LS: So, P5. Where should we start?
P.W: With the famous Peter Drucker quote… The ACCA p5 examiner really loves this quote and it sums up the paper really well: “What gets measured, gets done”. In other words, if you don’t measure the right things, you won’t do the right things and vice versa. If you incentivize people in a business to make short-term profits, for instance, that’s what they’ll do.
ACCA P5 is focussed on teaching students how to lay the groundwork for a successful business. It’s about first principles – what should a business be measuring if they want to be successful in five years? What are the building blocks? To pass ACCA P5 you need to prove you know how to think from those first principles.
LS: So ACCA P5 calls on a bigger picture understanding of business?
P.W: Exactly. It’s strategic and commercial. To pass ACCA P5, students need to prove they know how to make the right decisions at the outset, to facilitate a healthy business moving forwards. It’s about knowing what a business needs to do to succeed.
…most people think that P5 is just an extension of F5 and F9, and go into the paper thinking it’s going to be all about complicated numbers. It’s not: it’s more similar to P3, Business Analysis…
The closest cousin to ACCA P5 is probably P3 Business Analysis, which most students are really surprised to hear. Most people think that P5 is just an extension of F5 and F9, and go into the paper thinking it’s going to be all about complicated numbers. It’s not: your focus is going to be more on analysis and strategy.
(Source) ACCA P5 focuses on strategic analysis and commercial awareness.
For that reason, if you’re thinking about choosing ACCA P5 as one of your Options, your best bet is to look at how well you did on P3.
LS: What sort of questions should students expect on the ACCA P3 paper?
P.W: They’re going to be positioned in this more strategic way. “Given what this organisation is trying to achieve, what should they be doing?” – that sort of thing.
A common theme for the Section A scenario will be a company who are measuring the wrong things, and students will be expected to assess where they’re going wrong and make recommendations. A classic question will be a financial report that students are asked to analyse.
This is a point worth hammering home, actually, because this is a major mistake students make every single year. The examiner’s sick of seeing it – he writes about this mistake every year in the Examiner’s Report. Don’t analyse the business when you’re being asked to analyse the report.
You’re not being asked to look at the performance of the business, but at how well they’re reporting on it. So, for instance, should we have external benchmarks? Should we be using different metrics? Should we be including more graphs? Should we be doing more competitor research? You’re being asked to spot what’s wrong with the picture.
LS: That makes sense. What other topics seem to come up a lot in the exams?
P.W: Students should be really familiar with the different types of businesses and what that means in terms of their metrics. What does success look like for different enterprises, basically. Not-for-profits come up a lot – ‘what must you get right when setting up a Charity’ – topics along those lines. ‘How might setting up a not-for-profit differ from setting up a commercial business?’
…to pass ACCA P5 students need to be really familiar with the different types of businesses and what their metrics look like. What does success look like for different enterprises, basically…
I always tell my students to make sure they’re hot on the alternative performance frameworks too. Although ACCA P5 is strategic, there are still tangible facts you need to know.
Alternative performance frameworks are important to know for the ACCA P5 exam.
You might be asked something along the lines of, ‘Using the Lynch & Cross Performance Pyramid, identify and justify a complete set of key performance indicators for this business’. Make sure you know Lynch & Cross, the Fitzgerald & Moon Building Block Model and the Kaplan & Norton Balance Scorecard.
LS: Why do students fail the ACCA P5 exam? What are the biggest mistakes people make on this paper?
P.S: There are two main things students need to be better at to pass ACCA P5: thinking strategically, and exam technique. Did you know, ACCA P5 has the lowest global pass rates of any paper? I think students come into it expecting it to be very numerical, and it’s a strategic essay paper: they haven’t prepared in the right way.
L.S: Exam technique is a real problem in every paper.
P.W: Agreed! Students always seem to think they’ve got to this point in their academic career because of their exam technique – but it’s usually in spite of it! Exam technique almost always holds students back, and because P5 is a strategic final level paper, it really shows up poor technique.
L.S: What do students need to know about exam technique for ACCA P5?
P.W: Reading the question is an obvious one! You’ll hear the P5 examiner say, time and again, that students tend to answer the question they wish they’d been asked – not the actual question. That’s a clear way to fail.
The big problem is with students not planning their answers properly. They think as they’re writing which means whatever goes on the page is just reflecting the jumbled thoughts in their head. It’s impossible to mark.
Markers spend about 5 to 7 minutes marking one entire script – they have to be quick. If you make it difficult for them to see your point, they simply won’t award you the mark.
ACCA P5 students should plan first. Take the time to think of a logical structure to your argument and make it clear on the page.
…the PERT mnemonic is a really important exam technique for ACCA P5. Point, Explain, Relate, Time. Use the ‘So What?” principle too…
I tell all my students to use the PERT mnemonic: Point, Explain, Relate, Time. You make your point, you explain to the examiner why it’s relevant and relate it to the question, and do so as concisely as possible.
Explain and Relate are really important in ACCA P5 – that’s about telling the examiner what the implication of your point is. It’s the ‘so what?’ Say you write, “cash flow is tight”. The examiner is thinking, “yes, but so what?”.
You need to write, “Cash flow is tight which matters because the organization are looking to invest in a new project which will involve significant new funds up front. With cash flow limitation this will be impossible.”
One of the biggest mistakes ACCA P5 students make is to be fluffy instead of concise. I think because it’s a strategic paper, people think they have to write a highfalutin strategic essays.
Students think they have to make everything flowery and turn it into essay speak, but that’s what loses you marks. It all comes back to putting yourself into the examiner’s shoes: if you make it difficult for them, you won’t get the mark and you won’t pass ACCA P5.
(Source) If your paper is difficult to understand, you’ll lose marks.
…if you ever read a prize-winning script you’ll see it’s short, sharp, clinical. Every word counts…
There are no points for volume – you can get 15 marks for a side of writing, or 2 marks for a side of writing: it’s about what you say. Make your point, move on. If you ever read a prize-winning script you’ll see it’s short, sharp, clinical. Every word counts.
LS: How much should students write?
P.W: As much as you need to make your point, in as few words as possible! I advise students to take the mark allocation for each question, divide it by two, and add a few back on: that should tell you how many points you need. For example, say you’ve got a ten-mark question. Divide it by two to get 5, then add a few on – you’ll need 7 or 8 points to get 10 marks.
LS: What are marks awarded for? I assume there aren’t black-and-white right answers?
P.W: It’s about the quality of your thought process, and no, it’s not at all black and white. There will obviously be wrong answers, but there are tens of possible right answers. As much as anything it’s about justification.
… the majority of ACCA P5 marks are awarded for your thought process; your ability to justify your point in a reasoned, sensible way…
The all-important ER in PERT is about selling the point to the marker – about how well you justify yourself. There are some facts in there but it’s all about application; about how you think.
There’s no shortcut if you want to pass ACCA P5 – you can’t just learn and regurgitate. The examiner has said explicitly that anyone who goes into the exam and successfully regurgitates everything they know could expect to get 20% – 30%. It’s all application. It’s about having an opinion, having real expertise.
I think you have to be confident, almost a little bit cocky, to pass ACCA P5. Put yourself in the position of advising a client – you don’t want to show self-doubt. You want them to think you’re an expert.
LS: It sounds like professional experience would be really helpful then?
P.W: Yes, it can really help. That’s not to say you can’t do really well in the paper without professional experience – some people just naturally grasp commercial implications and strategy – but many students find it helpful.
LS: Professional experience aside, what can students do to prepare better for ACCA P5?
P.W: The best way to prepare for the ACCA P5 exam is by doing as much question practice as you possibly can. The more you do, the better you’ll get at seeing the angles in a given scenario, and explaining your points in a convincing way.
Doing practice questions is also really important because it‘s an efficient way to refresh your knowledge of other parts of the ACCA. ACCA P5 has a lot of assumed knowledge, so it’s taken for granted that you remember everything you’ve learnt up until this point.
Students hear that and their first instinct seems to be to go back and re-learn all of F5 and F9. I always worry when I see that… it’s not a good strategy because it’s so inefficient. You’re just cramming things into your head; it’s information overload. Instead, students should answer practice questions and it’ll be immediately clear if there are any areas you need to refresh.
…force yourself to engage in the business world in order to train yourself to think in the way ACCA P5 expects you to…
I also think all students should be reading the paper and listening to the news, and thinking about real-world scenarios.
(Source) Staying abreast of business news will help you pass ACCA P5.
Challenge yourself constantly: why is this company doing that? Why is BHS going into administration at the moment? What could they have done differently? What’s gone wrong for them? Force yourself to engage in the business world around you and you’ll be training yourself to think in the way ACCA P5 expects you to.
LS: Thanks Peter, it’s fantastic to be able to share your insight with our members. We’ve got one final question for you before we let you go…
P.W: Fire away!
LS: As one of our most experienced tutors, it goes without saying that you’re a big fan of LearnSignal. What would you say to any ACCA students considering signing up?
P.W: I’m somewhat bias towards the ACCA P5 course, because I wrote it! Seriously though, all the courses are fantastic.
The thing with online learning is that it’s really different from traditional learning. The same things don’t work – but the vast majority of online course providers just try and replicate what they’re doing offline. It’s just not that effective. I rate LearnSignal because it uses the online medium to its full effect, so students are learning more effectively. The more effectively you learn, the more likely you are to pass the ACCA.
Peter Woolley was in Practice with a Big 4 firm for nearly a decade before moving into professional education. He’s been helping ACCA students pass their exams for more than 15 years, making him an incredibly valuable addition to the LearnSignal team. If you want to study for the ACCA P5 paper with Peter, sign up for a 7-day free trial HERE.