Examiner’s approach

The syllabus for Paper 2.4 aims to develop knowledge and understanding in both financial management and management accounting. In financial management, the areas of analysing the benefits of various sources of finance and capital investment opportunities are the main focus of attention. In management accounting the focus is on the application of management accounting techniques to aid business planning and control.

The objectives of the syllabus
Candidates who successfully pass the examination are expected to be able to:

• explain the role and purpose of financial management
• evaluate the overall management of working capital
• evaluate appropriate sources of finance for particular situations
• appraise capital investment through the use of appropriate methods
• identify and implement appropriate costing systems and techniques
• prepare budgets and use them to control and evaluate organisational performance
• critically assess the tools and techniques of financial management and control

Paper 2.4 builds on Paper 1.2, Financial Information for Management and candidates are expected to have thorough understanding of the Paper 1.2 syllabus.

On completion, Paper 2.4 prepares candidates for more advanced study on Paper 3.3, Performance Management and Paper 3.7, Strategic Financial Management.

Format of the examination
The examination comprises two parts. Part A is a compulsory scenario-based question worth 50 marks. The emphasis in this question will usually be on financial management. As the Part A question is compulsory – it is expected that all students will attempt it in the examination and allocate an appropriate amount of time.

Part B contains four shorter questions worth 25 marks each. Candidates are required to answer any two of these. One of the questions will be entirely discursive. Two questions will be taken from the financial management part of the syllabus and two questions will be taken from the management accounting area. The discursive question may be taken from any part of the syllabus. In the examination, the balance between discussion and computation will be largely the same from diet to diet.

There have now been several examinations under the new syllabus and recent papers are a useful guide to the format of questions in the examination.

Key areas
As indicated in the Syllabus, the key or core areas are:

• financial management objectives
• management of working capital
• sources of finance
• capital expenditure and investment
• costing systems
• standard costing and variance analysis
• budgeting and budgetary control.

Conclusion
In order to pass this examination candidates should:

• clearly understand the objectives of the exam as explained in the Syllabus and Study Guide
• have read and thoroughly studied a suitable financial management and control manual
• read relevant articles published in student accountant
• practice examination standard / style questions on a regular basis
• be able to communicate their understanding clearly in an examination context.