Introduction to Fundamental Level ACCA Papers

The Fundamental Level of ACCA Qualification has 9 papers in total. We will provide a brief introduction about each of the paper so that you can have some understanding about what each paper is about, what it emphasizes about and what is its exam structure.

F1: Accountant in Business

F1 paper introduces the students to the business environment and a very wide range of business as well as accounting terminology. The syllabus is very wide and covers a lot of topic but not in much depth.

The emphasis of the exam is on evaluation of accounting systems, principles of internal control, professional ethics and values, basic business legislation, leadership and communication, and business structure, environment and governance.

The exam is based on multiple choice questions and lasts for 2 hours. There are 50 questions and each question carries 2 marks. You can choose either a computer based exam (CBE) or a paper based exam for this paper.

F2: Management Accounting

Paper F2 introduces students to management accounting and business management for achievement of better performance. Costing techniques, preparation of budgets and variance analysis are taught to control costs.

The exam is based on multiple choice questions and lasts for 2 hours. There are 50 questions and each question carries 2 marks. You can choose either a computer based exam (CBE) or a paper based exam for this paper.

Although most of the questions involve arithmetic, some of the questions may ask you to choose from a number of written statements. All of the questions carry 2 marks but the difficulty level of questions varies. You will find some of the questions very easy while others might give you a tough time. A lot of students have trouble in managing their time in this exam. Although the questions are multiple choice based, it is quite difficult to answer 50 questions in 2 hours. Another problem is that some questions are tricky in their wording which leads students to choose wrong options even if the students were well prepared for that particular topic.

F3: Financial Reporting

F3 paper focuses on the preparation of financial statements. The syllabus covers topics from basic double entry system through to preparation of single entity and consolidated financial statements such as Statement of financial performance, statement of financial positions, statement of cash flows and statement of changes in equity.

The exam is based on multiple choice questions and lasts for 2 hours. There are 50 questions and each question carries 2 marks. You can choose either a computer based exam (CBE) or a paper based exam for this paper.

Majority of the questions are multiple choice based where you have to choose from (usually) four options. In case of computer based exam (CBE) for this paper, sometimes you might have to do calculations and then type the answer in the specified space.

Majority of the questions are arithmetic based but some of the questions might require you to choose from a number of written statements. This type of questions are usually related to International Financial Reporting Standards (IFRSs).

F4: Corporate and Business Law

The purpose of F4 paper is to develop understanding of how legal system works with particular reference to the laws relating to the business. It does not intend to develop an understanding which is expected of a lawyer. Its intention is to prepare the students to recognize situations where professional legal advice need to be sought.

The emphasis of F4 paper is on sale of goods law, administration as an alternative to dispute remedy, and company law. Usually 50% to 60% of the paper is based on these areas of law.

The exam is structured around 10 questions each carrying 10 marks. All of the 10 questions are compulsory. First 7 questions are knowledge based while the last 3 questions are scenario based. The scenario based questions are designed to test a student's ability to establish the area of law applicable, analyze the problem, identify the related principles of law, and then apply the principles in the given scenario. The exam lasts for 3 and 15 minutes where 15 minutes are for reading and planning only.

F5: Performance Management

Paper F5 builds on the knowledge learned in Paper F2 and advances that knowledge to develop skills for managing business to achieve better performance. Most the topics of F5 were already introduced in F2, but now they are examined in more detail and depth.

The exam usually involves arithmetic and calculation but they are designed to check that the students understand the techniques (such as costing, budgeting, variances) and can decide what information is relevant.

For answering the theoretical and written questions, some learning is involved but the questions primarily aim to check that the students understand the techniques, can explain them, can highlight their pros and cons, and can identify the problems that can arise when applying these techniques.

The exam is structured around 5 questions carrying 20 marks each. All of the five questions are compulsory. Each question is further split into smaller parts. The marks are approximately equally distributed between calculations and writing i.e. about 50% for calculations and about 50% for written parts. The exam lasts for 3 and 15 minutes where 15 minutes are for reading and planning only.

F6: Taxation

Paper F6 introduces the students to the subject of tax and provides basic knowledge of underlying principles and technical areas of tax. The syllabus covers income tax, corporation tax, value added tax, chargeable gains tax and inheritance tax. The students are expected to be able to compute tax, explain the basis of computations, apply tax planning techniques and identify compliance issues.

The emphasis of the exam is on computation of main taxes and relevant items. In addition the focus is on computation of capital allowances, adjustment of profit statement, computation of value added tax (VAT) and understanding of VAT system.

The exam is structured around five compulsory questions that will be predominantly computational. Question 1 will be related to income tax and Question 2 will be related to corporate tax. These two questions will carry a total of 55 marks with any one question carrying 25 marks and the other question carrying 30 marks.

Question 3 will focus on chargeable gains and carry 15 marks. The remaining two questions (Question 4 and 5) can be from anywhere from the syllabus and each question will be worth 15 marks.

A minimum of 10 marks will always be available in F6 exam for value added tax (VAT). These 10 marks can either be part of Question 1 and 2 or be part of a separate question.

F7: Financial Reporting

Paper F7 builds on and advances the knowledge and skills learned in Paper F3.

The emphasis of the paper is to prepare a student to be able to prepare consolidated financial statements. It also tests a student's ability to prepare and/or examine performance of a business from financial statements.

The exam is structured around 5 compulsory questions. Question 1, 2 and 3 carry 25 marks each while Question 4 and 5 carry 15 and 10 marks respectively.

Question 1 focuses on preparation of either consolidated statement of income, or statement of financial position, and in some cases both. Sometimes the questions include a small part (worth 4 to 6 marks) that requires the students to provide some comments or some knowledge related to the topic.

Question 2 focuses on preparation of financial statements from a trial balance or draft financial statements that require adjustments. It can require the students to prepare any or all of the statement of income, statement of financial position, statement of comprehensive income, or statement of changes in equity.

Question 3 focuses on either interpretation of financial statements or preparation of statement of cash flows, and in some cases both. Question 4 and 5 focus on computational and discussion elements and usually involve matters related to The Framework, International Financial Reporting Standards (IFRS), and International Accounting Standards (IASs). The exam lasts for 3 and 15 minutes where 15 minutes are for reading and planning only.

F8: Audit and Assurance

Paper F8 focuses on the purpose, process, and outcomes of auditing. Some of the topics are developed from paper F1.

The emphasis of the paper is on purpose of audit, ethical issues that might arise, the processes involved in audit, and the audit reports. About 50% of the marks focus on application of knowledge, for example, in identifying audit risks, suggesting audit procedures, evaluating internal controls, suggesting the effect of audit findings on the audit reports.

The exam is structured around 5 compulsory questions. Question 1 is primarily scenario based and carries 30 marks. Question 2 is primarily knowledge based and worth 10 marks. The remaining 3 questions are primarily scenario based and each worth 20 marks.

F9: Financial Management

Paper F9 focuses on management of finances of a business. Some of the topics such as inventory control and discounted cash flow were already discussed in Paper F2. These topics and other topics are examined in more depth in this paper.

Although the exam involves calculations, the emphasis of the exam is to examine whether the student's understand the techniques and can decide what information is relevant. The written and theoretical questions aim to not only examine student's knowledge of financial management theories, but also their understanding of assumptions and limitations of these theories.

The exam is structured around 4 compulsory questions. Each question is worth 25 marks. Each question is usually broken down to smaller parts. The marks are approximately equally distributed between calculations and writing i.e. about 50% for calculations and about 50% for written parts. The exam lasts for 3 and 15 minutes where 15 minutes are for reading and planning only.