Becker P5 - ACCA P5 text PDF

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ACCA ADVANCED PERFORMANCE MANAGEMENT P5 STUDY TEXT September 2016–June 2017 Edition

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Paper P5

Contents Page

Introduction ...............................................................................................v About This Study System ............................................................................v Syllabus.....................................................................................................vi ACCA Study Guide.......................................................................................x Examination Technique ............................................................................ xv Sessions 1

Strategic Performance Management ..................................... 1-1

2

Performance Hierarchy ......................................................... 2-1

3

Performance Management and Control ................................. 3-1

4

Business Structure ............................................................... 4-1

5

Other Environmental and Ethical Issues ............................... 5-1

6

External Influences on Organisational Performance ............. 6-1

7

Performance Management Information Systems .................. 7-1

8

Information Recording and Reporting................................... 8-1

9

Strategic Performance Measures in Private Sector................ 9-1

10

Divisional Performance Evaluation ......................................10-1

11

Transfer Pricing ...................................................................11-1

12

Not-for-Profit Organisations ................................................12-1

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iii

Contents

Sessions

iv

Page

13

Non-Financial Performance Indicators and Quality ..............13-1

14

Human Aspects of Performance Management ......................14-1

15

Alternative Views of Performance Management ...................15-1

16

Complex Business Structures and Corporate Failure ............16-1

17

Index ..................................................................................17-1

© DeVry/Becker Educational Development Corp. All rights reserved.

Introduction

ABOUT THIS STUDY SYSTEM This Study System has been specifically written for the Association of Chartered Certified Accountants fundamentals level examination, Paper P5, Advanced Performance Management. It provides comprehensive coverage of the core syllabus areas and is designed to be used both as a reference text and to provide you with the knowledge, skill and confidence to succeed in your ACCA examinations. About the author: Nick Ryan is ATC International's lead tutor in performance management and has more than 10 years' experience in delivering ACCA exam-based training.

How to Use This Study System You should start by reading through the syllabus, study guide and approach to examining the syllabus provided in this introduction to familiarise yourself with the content of this paper. The sessions which follow include the following features: Focus

These are the learning outcomes relevant to the session, as published in the ACCA Study Guide.

Session Guidance

Tutor advice and strategies for approaching each session.

Visual Overview

A diagram of the concepts and the relationships addressed in each session.

Definitions

Terms are defined as they are introduced and larger groupings of terms will be set forth in a Terminology section.

Illustrations

These are to be read as part of the text. Any solutions to numerical Illustrations are provided.

Exhibits

These extracts of external content are presented to reinforce concepts and should be read as part of the text.

Examples

These should be attempted using the pro forma solution provided (where applicable).

Key Points

Attention is drawn to fundamental rules, underlying concepts and principles.

Exam Advice

These tutor comments relate the content to relevance in the examination.

Commentaries

These provide additional information to reinforce content.

Session Summary

A summary of the main points of each session.

Session Quiz

These quick questions are designed to test your knowledge of the technical content. A reference to the answer is provided.

Study Question Bank

A link to recommended practice questions contained in the Study Question Bank. At a minimum, you should work through the priority questions after studying each session. For additional practice, you can attempt the remaining questions (where provided).

Example Solutions

Answers to the Examples are presented at the end of each session.

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v

P5 Advanced Performance Management

Syllabus

SYLLABUS Aim To apply relevant knowledge, skills and exercise professional judgement in selecting and applying strategic management accounting techniques in different business contexts and to contribute to the evaluation of the performance of an organisation and its strategic development.

Main Capabilities On successful completion of this paper, candidates should be able to: A. Use strategic planning and control models to plan and monitor organisational performance B. Assess and identify relevant macro economic, fiscal and market factors and key external influences on organisational performance C.

Identify and evaluate the design features of effective performance management information and monitoring systems

D. Apply appropriate strategic performance measurement techniques in evaluating and improving organisational performance E.

Advise clients and senior management on strategic business performance evaluation and on recognising vulnerability to corporate failure

F.

Identify and assess the impact of current developments in management accounting and performance management on measuring, evaluating and improving organisational performance.

Syllabus Structure

BA (P3)

APM (P5)

PM (F5)

MA (F2)

vi

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Syllabus

P5 Advanced Performance Management

Relational Diagram of Main Capabilities Strategic planning and control (A)

Economic, fiscal, market and environmental factors (B)

Performance measurement systems and design (C)

Strategic performance measurement (D)

Performance evaluation and corporate failure (E)

Current developments and emerging issues in management accounting and performance management (F)

Rationale The Advanced Performance Management syllabus further develops key aspects introduced in Paper F5, Performance Management, at the skills level and draws on aspects of the material covered from a more strategic and operational planning perspective in Paper P3, Business Analysis. The syllabus introduces candidates to the strategic role of management accounting as a discipline for planning and controlling performance so that strategic objectives can be set, monitored and controlled. It also covers the impact of external factors on strategic management issues, such as macro economic, fiscal, market and environmental impacts o...