What you will learn in PM
The aim of the syllabus is to develop knowledge and skills in the application of management accounting techniques to quantitative and qualitative information for planning, decisionmaking, performance evaluation, and control.
The syllabus for Performance Management (PM), builds on the knowledge gained in Management Accounting (MA) and seeks to examine students’ understanding of how to manage the performance of a business. It also prepares students for more specialist capabilities which are covered in Advanced Performance Management (APM).
The syllabus begins by focusing on the uses and control of information, management information systems and data analytics required by organisations to manage and measure performance in the modern, competitive environment. It is vital for an accountant to understand how information systems and developments in technology influence the management accounting techniques employed and how vital information systems are in the mechanisms of managing and controlling an organisation.
The syllabus then introduces more specialised costing and management accounting topics.
There is some knowledge assumed from Management Accounting (MA) – primarily overhead treatments. The objective here is to ensure students s have a broader background in management accounting techniques.
The syllabus then considers decision-making. Students s need to appreciate the problems surrounding scarce resources, pricing and make-or-buy decisions, and how this relates to the assessment of performance. Risk and uncertainty are a factor of real-life decisions and students need to understand risk and be able to apply some basic methods to help resolve the risks inherent in decision-making.
Budgeting is an important aspect of many accountants’ lives. The syllabus explores different budgeting techniques, including analytical techniques, and the problems inherent in them. The behavioural aspects of budgeting are important for accountants to understand, and the syllabus includes consideration of the way individuals react to a budget. The preparation of fixed, flexible and incremental budgets is assumed knowledge from Management Accounting (MA).
Standard costing and variances are then built on. All the variances examined in Management Accounting (MA) are assumed knowledge in Performance Management (PM). Mix and yield variances and planning and operational variances are explored here, and the link is made to performance management. It is important for accountants to be able to interpret the numbers that they calculate and discuss what they mean in the context of performance.
The syllabus concludes with performance measurement and control. This is a major area of the syllabus. Accountants should appreciate the importance of both financial and nonfinancial performance measures in management and should also appreciate the difficulties in assessing performance in divisionalised businesses and the problems caused by failing to consider external influences on performance. This section leads directly to Advanced Performance Management (APM).
All of the subject areas covered in this syllabus could be examined in either a private sector, public sector or not-for-profit context. Section F of the syllabus contains outcomes relating to the demonstration of appropriate digital and employability skills in preparing for and taking the PM examination.
This includes being able to interact with different question item types, manage information presented in digital format and being able to use the relevant functionality and technology to prepare and present response options in a professional manner. These skills are specifically developed by practicing and preparing for the PM examination, using the learning support content for computer-based examinations available via the practice platform and the ACCA website and will need to be demonstrated during the live examination.
On successful completion of this exam, students should be able to:
A. Identify and discuss the management information systems, the uses and controls over information and big data and data analytics used by organisations to manage and measure performance.
B. Explain and apply cost and management accounting techniques.
C. Select and appropriately apply decision-making techniques to facilitate business decisions and promote efficient and effective use of scarce business resources, appreciating the risks and uncertainty inherent in business and controlling those risks.
D. Identify and apply appropriate budgeting techniques, including quantitative techniques, and methods for planning and control and use standard costing systems to measure and control business performance and to identify remedial action.
E. Assess the performance of private, public and not-for-profit organisations from both a financial and non-financial viewpoint, appreciating the problems of controlling divisionalised businesses and the importance of allowing for sustainability and external aspects.
F. Demonstrate required employability and technology skills
