The ACCA Advanced Financial Management(AFM) exam has been slightly tricky for as long as anyone can remember. This is because the overall level of the exam is at the Master's or postgraduate level, and when you go from FM to AFM, you are expected to become a specialist in financial management.

The pass rate for this exam is, on average, 36% - 42%, which tells you how challenging students find this exam! 

You are expected to do some seriously advanced calculations and provide valuable answers to real-life scenarios. Advanced risk management techniques often feature, as well as advanced investment appraisal with options.

So, you may need help with this one, and we’re here to provide that help. In this article, we will give you the best tips and tricks for passing AFM based on insights from our expert team of tutors and writers. 

Stick around; it will be worth your time!

Why is the AFM exam hard?

There are several reasons why the AFM exam challenges students and getting your mind around them will help you prepare mentally for using the tips and tricks we will provide. So, let’s start here. 

The topics are complex

The entire syllabus for this course is very narrow, testing advanced financial management concepts such as investment appraisal with options, business valuations and reconstructions, risk management, and interest rate risk. Prospective chartered certified accountants will be expected to excel in these areas in the workplace.

These topics test detailed knowledge of audit risk, internal control and substantive procedures, which will prevent miscalculations in financial records.

It would be incorrect for students to treat this paper as a maths exam because many marks are for explaining financial concepts. 

Real-life application

The emphasis is on real-life application of theoretical knowledge. Candidates are expected to analyse complex financial scenarios and make valuable recommendations. 

Time pressure during the exam

During the exam, there are definitely time constraints. Both the multiple-choice questions and the real-life scenarios test the student's ability to think on their feet while providing the best possible solutions to the problems presented in the exam. Time management is a critical skill for any student who wants to pass this exam.

The high standard of the exams

ACCA exams maintain a high standard to ensure that professionals are well-prepared for the complexities of the modern business world. The difficulty of the ACCA exams, and especially AFM, reflects the commitment to producing excellent accounting professionals.  

Variance in question style

The AFM exam typically includes a mix of question styles, including scenario-based questions, essay questions, and calculations. The versatility candidates require to move from one type of question to the next is often challenging.  

This kind of exam technique allows examiners to test the candidate's ability to be flexible in problem-solving and use different techniques to provide valuable financial information.

Global applicability

The ACCA exam has to have global applicability since the qualification is recognised in countries throughout the world. This means the examiners need to develop questions that test the student's ability to work with international practices and regulations pertaining to company trading. 

We want to point out something else that’s relevant to this conversation. Just because AFM is challenging, it doesn’t mean everyone will struggle to get a good pass mark. Students have different strengths and weaknesses that they need to develop. Some students have done really well because they are naturally inclined towards taking concepts and making them work in the business world. 

But most students will find this one a little frustrating, so here are our tips for passing your AFM fast. 

How can you pass your AFM exam fast?

Tip #1 - Get the foundational knowledge squared up

To pass ACCA AFM, you must take the paper at skills level seriously. Students fail AFM because they haven't grappled with the basic concepts and perfected them. So, what should you be able to do before you tackle this exam?

1. Investment appraisal
2. Net present value
3. Internal rate of return
4. Basic weighted average cost of capital
5. Risk management - currency risk, money market hedges

The FM syllabus areas prepare you for moving on to AFM and without a good understanding of the relevant information in FM, you are going to struggle. At the strategic professional level, there is an expectation that you will be able to apply the basic and advanced theory on a practical level - we can’t stress this enough.  

ACCA has excellent bridging material for students who haven’t looked at the FM material for some time or have received an exemption for this module.  

Tip #2 - Pay attention to calculations and techniques

As we mentioned, you shouldn't look at this as an advanced math test.  In this exam, calculations are important, but they are a means to an end. Show your workings neatly because it is the workings that get the marks (whether the final answer is right or wrong). The primary outcome that the examiners are looking for is clear evidence that you can apply the correct technique to any given scenario. Which technique is left up to you to decide, so if you haven’t spent enough time working on the mock exam papers, this will catch you off guard.  

Tip #3 - 20% of the exam focuses on professional marks

You can really gain traction here if you focus on this section. The professional skills marks were introduced into the AFM exam in September 2022. The four professional marks are as follows:

• Communication - Section A questions in AFM ask for a report to address key financial management matters facing an organisation. This report must have appropriate report headings, sub-headings and an introduction that explains the content of the report to follow. You will get one mark for each of these elements.  
• Analysis and Evaluation - Analysis can be demonstrated by appropriate use of the data/information to determine suitable calculations to support your evaluation. The ability to draw appropriate conclusions from the data/information analysed should be demonstrated so that appropriate responses can be designed and advice given.
• Scepticism - Professional judgement is to be applied to draw conclusions and make properly informed decisions appropriate to the organisation.
• Commercial acumen - AFM questions center on commercial scenarios involving diverse organisations. Candidates must offer practical advice aligned with the context, considering external factors, organisational assumptions, and internal constraints. A forward-looking approach involves anticipating consequences for informed decision-making.

Tip #4 - Refer to the AFM technical articles

These are valuable resources found on the ACCA website that help you prepare for this exam. They are designed to provide insight, guidance, and practical knowledge about specific financial management topics. 

Here’s how you can use them in your preparation:

1. Identify relevant articles - identify relevant articles covered by the AFM syllabus. ACCA provides a list of technical articles categorised by subject areas.  
2. Read and analyse - once you’ve chosen what you want to study, go over them with a fine tooth comb. They are excellent at providing in-depth explanations, case studies and practical examples related to specific concepts. Pay close attention to the details and calculations provided and make sure you understand why they used a particular technique. 
3. Supplement your study material - enrol with a good tuition provider, this will be invaluable to getting your ACCA qualification, but you can also supplement approved learning material with technical articles. They will help you to make sense of the study material in a real-life context.
4. Apply concepts - technical articles will show how to apply theoretical concepts to practical scenarios. The more you familiarise yourself with this kind of information, the more comfortable you will be when you encounter them in the exam.
5. Take notes- this skill is underestimated by students, especially in a world where you are encouraged to do everything electronically. Taking down key points in your own handwriting as you read the articles will cement your learning in a way that is unique to you. These notes can be a quick reference for you before the exam. 
6. Discuss and debate with other students - engage in discussion groups and support forms where you can share different viewpoints and debate the practical implications of your decisions to solve the case studies. The debate will reinforce your learning.
7. Practice questions - technical articles will include practice questions. Don’t skip over these, as they test your comprehension and problem-solving abilities. 
8. Stay updated - the field of management accounting is dynamic, and regulations and practices may change over time. Be sure to check for updated articles or new releases that reflect the most current industry trends and standards. 

Tip #5 - Use the ACCA practice platform

The ACCA practice platform is an essential tool that you must use to prepare for the computer-based exam. You will be expected to complete spreadsheets and you need to know how to do this on the platform when you write the exam. Using the practice platform will get you used to working with multiple screens, including the calculator app. Don’t skip out on what is essential practice before your AFM exam. 

The spreadsheet on the platform can calculate basic discount factors, a function for MPV, a function for IRR and MIRR, and a function to work out norms. Doing calculations on the spreadsheet is far better than doing them with pen and paper.

Also, don’t practice using MS Excel or Google Sheets because the platform works differently to these applications. It may seem easier in the short term if you are familiar with Excel or Sheets, but this will not be helpful in the exam. 

Tip #6 - Review past papers

Why would you want to do this? To understand the structure of the exam, what calculations are tested more often and what the real-life scenarios focus on. The ACCA website provides students with past papers so that you can look at a number of years, say 3 or 4 years and make a list of the areas you see on every paper.

It is not advisable to go into the AFM exam without practicing your skills using the practice platform, past papers and technical articles. If you want to pass the first time, then you need to put in the work beforehand.   

Tip #7 - Don’t do Q1 first

From experience, we’ve noticed that students who start with Q1 cannot get past this question and they lose valuable time as a result. Start with Q2 or Q3 - whichever question you are stronger at. You need to get as many marks for the areas you know and are comfortable with, and then you can go back to Q1. Take 40-50 minutes to do Q2 and Q3, respectively and then move on to other sections. 

Conclusion

In conclusion, AFM can be challenging, but you can successfully pass this exam when you use the tips and tricks that we have suggested. We have assembled these tips by listening to both tutors and students speak about their experiences with the AFM exam.    

‍Here are some key takeaways from this article:

• Master the fundamentals
• Balance calculations and technique
• Leverage professional marks
• Explore technical articles
• Utilise the ACCA practice platform
• Review past papers
• Answer questions strategically

Write us an email if these tips are helpful. We’d love to hear from you and use your feedback to help future students. 

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At VIVA, we prepare our students for the AFM exam with the above tips in mind. We have expert tutors with a track record in practice and academia, dedicated to getting you through all your ACCA exams. 

‍You can join hundreds of other students today by signing up for a 12–month ACCA All Access membership here. You will unlock 100s of hours of premium ACCA course content, video lectures, integrated exam scenarios,downloadable course notes and a 7-day 100% money-back guarantee!