Updated: Jan 20, 2020
Many of you will commence your ACA professional level journey with the Financial Accounting and Reporting Exam (FAR). Hence my aim in this article is to give you some golden gems that will arm you with the confidence you need to battle through FAR exam land......unscathed.
Let’s be real, no one likes exams! As someone who relishes learning and education I must admit even I loathed exams. That intense feeling of the clock ticking whilst you hurry to complete a question, is enough to make anyone break out in a sweat.
I believe that a combination of the right exam technique, sufficient exam question practice and positive vibes are enough to calm those niggling exam nerves. For many budding trainee accountants, the professional level ICAEW exams can present a significant challenge compared to the certificate level exams. For starters there is no multiple choice!
The FAR exam is the longest exam at professional level.
With 3 hours you might think you have plenty of time to work through the requirements at a leisurely pace, but don’t be fooled! There are 4 lengthy questions to complete, with plenty of adjustments to keep you busy. It’s recommended that you spend 1.8 minutes for every mark allocated in a question. Therefore, a 30-mark question should take you roughly 54 minutes to answer. I always advise my students to make a mental note of timings and be mindful of that ticking stopwatch on your CBE software.
If there is one thing you will discover in your FAR journey, it’s that proformas matter!
Unlike the accounting exam where you have pre-drafted proformas to input numbers for your financial statements, the FAR examiner is not so lenient. You will be expected to draft the financial statements from scratch. If a requirement is asking for the preparation of financial statements (single entity or consolidated), I always encourage students to draft these first. Your aim should be to practice enough questions so that you can conjure these beauties (yes, I am referring to the proformas) in your sleep. As a student I would cover my bedroom wall with these blank proformas in the hope they would miraculously cement themselves in my mind so that I could rapidly produce them in the exam, and it certainly worked for me.
You can definitely get the marker on side if you demonstrate a good working structure in your answer.
FAR lends itself nicely to method marks and the best way to grab these is to ensure your workings are neatly presented, are clear and referenced. They should provide an audit trail, enabling a marker to glide through your calculations awarding you follow through marks even if your final numbers may not be correct. Like your financial statement proformas, there are a few templates you can use for your workings, such as the cost matrix which can be used for Q1 to determine the total for the various expenses and the ‘group standard workings’ for Q4.
Break down the information into bite size digestible chunks.
Now I know this seems obvious but it warrants recognition. It’s very important to read the core requirement first, as otherwise you may find yourself feeling overwhelmed with the volume of information provided. What you need to do is break down the information into bite size digestible chunks. Knowing what is required in the question will ensure you consider the relevance of the detail provided. Equally important is to answer the question that is set, not the one you think has been set. If this means reading the requirement twice, so be it. For instance, the June 2018 exam commentary revealed that many students produced a statement of profit and loss account rather than the required statement of comprehensive income. An error that could have been avoided if students had read the question carefully.
It is very important to attempt all the questions set in the exam paper.
If you’re anything of a perfectionist like me, you might spend ages on Q1 getting your ‘balance sheet to balance’ and trust me when I say this is NOT a good game plan. You may secure maximum marks for Q1 (assuming you dealt with every adjustment correctly), however this would leave you short of time to attempt the other requirements to an equally good standard. Admittedly, this is intrinsically linked to time management (tip 1) but it is also important to realise the benefit of prioritising in the exam and knowing when to move on to the next question. It is possible to complete the exam to time if you can master the art of prioritising those ‘easy aspects’ of the question rather than getting hung up on some of the harder stuff which you can waste away valuable time on.
These golden gems are my recipe to FAR exam success. Whilst it initially appears a monumental feat, rest assured with enough practice, perseverance and positivity, passing the exam will be FAR from difficult (see what I just did there) #positiveaccountingvibesonly