Summary
This article offers our top five tips on how to pass the ACA Corporate Reporting (CR) exam. Written by a multiple prize-winning ACA tutor who has coached several students to also win ICAEW prizes, this is a must read for any student preparing for their CR exam.
Tip 1 – When starting your CR preparation, ensure that your Financial Accounting and Reporting (FAR) and Audit and Assurance (AA) knowledge is at the same level as when you passed those exams
CR examines Financial Reporting (FR), Audit, Financial Statement Analysis and Ethics, with at least 80% of the marks allocated to FR and Audit. The FR aspects of the paper are similar to the FAR exam and the Audit aspects similar to the AA exam. In fact, around 60-70% of the marks in the CR exam are on topics already tested at Professional Level. Furthermore, the style of some of the exam questions are also the same, e.g. ‘explain the financial reporting treatment’ and ‘identify audit risks and suggest audit procedures’.
Therefore, it is strongly advised that your preparation begins with re-learning the technical content from FAR and the auditing process from AA, with a particular focus on audit risks and procedures. As we consider this to be such a fundamental part of CR preparation, we provide all our CR students with access to our FAR and AA video classes. Our experience is that students who complete this preparatory work find the advanced CR content much easier to understand and apply. This then enables them to focus on exam technique from an earlier stage which leads them to higher marks.
Tip 2 – Appreciate the differences between each type of CR question and learn the optimal exam technique for each
The three questions in the CR exam are can be summarised as follows:
FR only (requiring correction to draft financial statements/figures)
FR and Audit (requiring use of Data Analytics Software/Advance Information)
FR and Audit
Financial statement analysis and Ethics can be examined in any question, although Ethics is most often examined in Q1 or Q3.
By nature, FR requirements are technical and require students to explain the correct accounting treatment and then adjust the financial statement extracts. This is similar to Q2 in the FAR exam, albeit with examination of some new standards and more complex adjustments.
The audit aspects are ‘skills based’ rather than technical and require students to interpret the scenario to identify auditing issues (which isn't always just risks and procedures). Therefore, because the audit questions are scenario based, the questions are less predictable and less repetitive across exam sittings compared with the FR requirements. Having said that, the exam technique you should use does not change because the skills the examiners are testing are the same.
Having performed a detailed review of all the CR past exam papers and mark schemes, we have developed and tested the optimal exam technique for each type of CR exam question. As exam technique is best taught via practical application to recent past exam questions, we have included a free sample class from our CR course here.
Tip 3 – Practice several of the same question one after another
After using lots of past CR exams to teach our students the optimal exam technique for a particular type of CR exam question, we send our students away to practice lots of similar questions. For example, after being taught the exam technique to use for ‘explain the FR treatment’ questions on Leases, our students then practice several other ‘explain the FR treatment’ questions on Leases.
This has the following benefits:
It enables you to apply the exam technique demonstrated during tuition
It familiarises you with how the examiners structure questions
It enables you to identify patterns in how each topic is examined
It improves your efficiency when using the open book notes
It enables you to identify weakness areas so that you can focus your technical learning and exam skills
It familiarises you with the ICAEW CBE software
It enables you to improve your speed so that you don’t exceed your time allocation
Our CR Master Plan categorises all the past exam questions by topic to make it easy to practice lots of questions on the same topic. An example from our 2021 CR Materials is included below.
Tip 4 – Structure your open book notes so that they can be used effectively and time-efficiently in the exam
Open book exams present both a golden opportunity and fatal time trap. The CR exam is incredibly time pressured so any time spent looking something up in your notes is time which could have been spent typing a mark scoring point. Therefore, your open book notes need to be concise and structured in a way that you can quickly look up information should you need.
Given the technical nature of FR, we suggest that your notes include a summary of the key technical points for each topic. As audit ‘risks and procedures’ requirements frequently follow on from ‘explain the financial reporting’ requirements, it is advised that you also include a list of some common risks and procedures for each topic. The example below demonstrates how to do this, which is taken from our CR Materials.
As explained earlier, non-risks and procedures audit questions tend to be scenario specific so your open book notes are likely to be of limited use when tackling these types of question. However, it is a good idea to have a reminder of the types of points to include and how to generate ideas to help steer you in the right direction.
As mentioned above, any time spent looking something up in your notes is time which could have been spent typing a mark scoring point. Therefore, you should aim to build your FR knowledge and audit exam technique skills to the level where you use your open book notes sparingly, if at all. This will then enable you to secure marks far more easily within the tight time constraints of the exam. Personally, I only use our materials if a very technical FR question comes up, such as share-based payments with a choice of settlement.
Tip 5 – Bag the relatively easy ethics marks
Ethics is examined in all the ACA exams and whilst ethics questions do get harder as the ACA progresses, the ethics marks remain comparatively easier to the technical marks. A typical CR paper includes 8 marks for ethics which equates to 16% of the marks needed to secure a 50% passing grade. Therefore, comparatively easy ethics marks offer the opportunity to secure 16% of the marks you need to pass - in what in our opinion is - the hardest ACA exam.
The most efficient exam strategy is to ensure that you have an exam technique which will ensure that you make the eight points needed to get maximum marks for ethics.
Need Help Passing the ACA CR Exam?
Our CR classroom and online courses focus on the most frequently examined technical content and demonstrate the optimal exam technique for each type of CR question. Sample classes from the course, our CR Materials and our CR Master Plan can be found here.
About the Author
Kieran Doe is a Senior ACA Tutor at ACA Masters. Kieran won ICAEW prizes for his performance in Financial Accounting and Reporting, Tax, Financial Management, Audit, Business Strategy and Case Study. This is in addition to winning several prizes at university for various Accounting, Management, Business and Economics subjects.
Kieran’s tuition is based around the learning techniques and exam strategies which enabled him to win prizes for all the subjects he teaches. Under his guidance, several of his ACA students have also won ICAEW prizes.