Advanced Performance Management (APM) is the thirteenth exam of your ACCA journey. Advanced Performance Management is also an optional exam. There are four optional exams in the ACCA professional level, Advanced Financial Management, Advanced Performance Management, Advanced Taxation, Advanced Audit and Assurance, students will be required to choose any two optional subjects. NCFM Academy Hyderabad, one of pioneer for ACCA Course Colleges in Hyderabad, offers ACCA Paper P5 Advanced Performance Management in Ameerpet.
Advanced Performance Management (APM) builds upon your earlier studies in particular Performance Management (PM) and aims to give the students a deeper understanding of performance management concepts and methods allowing the students to tackle challenges and different scenarios with professionalism and technical proficiency.
The syllabus is assessed by a three hour fifteen minutes examination.
Section A of the exam will always be a 50 mark case study based on an organization in a particular business context. It will include the organization’s mission statement and strategic objectives and candidates will be expected to be able to assess the methods by which the organization is controlling, managing and measuring performance in order to achieve its objectives. This assessment could include an evaluation of the organization’s performance report, its information systems, new strategies or projects and its performance management and measurement systems.
Candidates should understand that they will be expected to undertake calculations, draw comparisons against relevant information where appropriate and be prepared to offer alternative recommendations as needed. Management accountants are required to look across a range of issues which will affect organizational performance, the achievement of objectives and impact on operations and so candidates should expect to see Section A of the exam focus on a range of issues from across syllabus sections A, C and D. These will vary depending on the business context the case study in Section A is based on.
Section A will also include four professional marks that will be awarded for the candidate’s approach to the format requested for the answer, for example, a report to the Board of Directors.
Candidates will be required to answer a further two 25 mark questions in Section B of the exam, which will normally comprise of scenario-based questions. One of the Section B questions will come mainly from syllabus section E, however, the other Section B question can come from any other syllabus section. Section B questions will also require candidates to address a range of issues influencing the performance of organizations in specific business situations
Syllabus of ACCA Paper P5 Advanced Performance Management
The syllabus is divided into five sections with further sub-sections.
A- Strategic planning and control
This is the first section of this course and it covers strategic planning and control in detail. Students will need to understand the role and importance of strategic performance in strategic planning and control and how models such as SWOT analysis, Boston matrix, PESTEL, Porters 5 forces, and the balanced scorecard may help the management in effective strategic decision making.
Students will need to evaluate the external environment and how it affects the decision making of an organization, budgeting techniques will also be covered and students will be required to calculate and interpret how various budgeting ratios relate to issues in planning, control, and organization of resources. Students will need to understand different information needs of organizations adopting a functional, divisional or network form and the implications for performance management.
This section also covers the role that performance management has in business integration, students will be required to have an understanding of the value chain analysis and McKinsey`s 7S`s. Students will need to understand the effect of organizational change on performance management and the need for organizations to continually develop their information management systems to remain in sync with the changing needs of the organization and the environment in which it operates. This section will also cover other environmental and ethical issues.
B- Impact of risk and uncertainty on organizational performance
This is the second section of this course and it covers the effect of risk and uncertainty on organizational performance. Students will need to have an understanding of the impact of different risk appetites of stakeholders on the organizational performance of the organization.
This section will also cover the impact of short and long term risk and uncertainty on the strategic planning and decision making of an organization. Students will be required to have technical proficiency in different risk analysis techniques such as maximin, maximax, minimax regret, and expected values
C- Performance management information systems and developments in technology
This is the third section of this course and it covers the role and importance of information systems in performance management. Students will be required to understand the link between information systems and the needs of management, how the needs and requirements of management are shaped by the features available in the management accounting and how can information systems be integrated with the overall information system of an organization and the effect of external and internal factors on the quality of information provided by the systems.
This section will also cover how advancements in IT and the introduction of new technologies such as RFID tagging, cloud computing, big data, and data analytics can affect the working and output of information systems. Students will need to understand how information systems provide access to previously unattainable data which allows businesses to plan, control and organize their resources in a much better manner.
Students will also need to understand the output of reports of information systems and the role of the management accountant in providing key performance information for integrated reporting to stakeholders
D- Strategic performance measurement
This is the fourth section of this course and it covers strategic performance measurement. Students will need to learn and apply appropriately different measures of performance such as gross profit, operational profit, return on capital employed (ROCE), return on investment (ROI), earnings per share (EPS), EBITDA, residual income (RI), NPV, IRR, MIRR, and EVA. Most of these you have already studied in your earlier studies. Students will need to understand and evaluate these measures of performance both internally and externally relative to the business environment. This section will also cover divisional performance and transfer pricing issues, strategic performance measures in not-for-profit organizations, non-financial performance indicators, the role of quality in management information and performance measurement systems, performance measurement and strategic human resource management issues and behavioral aspects of performance measurement
E- Performance evaluation and corporate failure
This is the fifth section of this course and it covers alternative views of performance measurement and management, strategic performance issues in complex business structures and predicting and preventing corporate failure.