February 2021
Where are the missing exam topics? Sunil Bhandari explains how the CBEs are changing, and what your response to these changes should be.
The ACCA Strategic Professional Level CBE’s are now approaching their first anniversary. For my paper, ACCA AFM, the advent of the new CBE format has made a significant change to the way students must prepare to sit this exam.
The most obvious of these is how to answer questions using the ACCA CBE ‘Spreadsheet’ and ‘Word Processor’, but that is a subject matter for a later article. What is less obvious, but equally important, is to know which ACCA AFM topics seem to have gone ‘AWOL’, at least temporarily, and why? Knowing what happened with the 2020 AFM exams is a good starting point.
In March 2020, the initial cohort of students sat the ACCA AFM CBE. The questions set were identical to the paper version of the exam that the majority of students attempted. The June 2020 exam was delayed until July, for understandable reasons. Once again, the CBE and paper versions contained exactly the same questions.
However, for the September 2020 sitting a material change came into play. The ACCA AFM examining team adopted a five-question approach. The morning sitting of the CBE and the paper exam were identical. The afternoon sitting of the CBE had one common question taken from the earlier exam, plus two different questions. This approach was dittoed for the recent December 2020 exams.
There is no doubt that the ACCA AFM examining team are ensuring that there is a level playing field. There is no advantage or disadvantage to a candidate that is sitting the paper test or the CBE (morning or afternoon).
This is only fair and equitable. When it comes to the theory/written elements of a question, this is easy to achieve. Whether you handwrite your answer or type, it makes no difference.
For the calculation elements, the examiners have to be commended for ensuring that all is fair in terms of CBE or paper exams. The CBE spreadsheet functions such as ‘copy & paste’ and ‘sum’ do save time for the CBE candidate.
The ‘NPV’ and ‘IRR’ commands are even more time efficient, but as long as the calculations can be completed within the allocated time by the paper exam candidate, then there not an issue. From the questions seen to date, this has been the case.
However, there are certain calculations where the CBE software, in my opinion, has a material advantage over the paper-based approach:
1. Ratio analysis: the facility to copy & paste the accounting information from the question’s exhibit to the response area, and then to use this data to compute repeat ratios, using the same copy & paste function, is very time efficient.
2. Multilateral netting: the table solution for a foreign currency hedging question is easier to prepare with the CBE spreadsheet than pen, paper and the calculator.
3. MIRR: taking a set of forecast project cashflows and using the ‘MIRR’ command is definitely quicker than using the equation provided in the paper exam.
4. BSOP model: this is the topic where the CBE spreadsheet short cuts are significantly beneficial, as can be seen below.
So it is not a surprise that the above topics were left out of the 2020 AFM exams. That is totally fair and reasonable. However, I am not saying to you that you should ignore these topics in the above form when preparing for the exams in 2021. In fact, I am saying quite the opposite.
The roll-out of the ACCA AFM CBE covers far more countries in 2021. Also, the examining team may choose to test the above in the CBE and not in the paper exam or set the question in such a way that the CBE spreadsheet advantage is removed (for example, Q1 Talam, March/June 2019).
Hopefully, they will not be AWOL for much longer!
• Sunil Bhandari is the ACCA AFM Tutor for FME Learn Online (www.SunilBhandari.com)
