ACCA – Performance Management (PM)

This subject helps you develop knowledge and skills in the application of management accounting techniques to quantitative and qualitative information for planning, decision making, performance evaluation, and control.

The syllabus begins by focusing on the information needs, technologies and systems required by organisations to manage and measure performance in the modern, competitive environment. It is vital for an accountant to understand how information systems and developments in technology influence the management accounting techniques employed and how vital information systems are in the mechanisms of managing and controlling an organisation.

The syllabus then introduces more specialised costing and management accounting topics. There is some knowledge assumed from Management Accounting (MA) – primarily overhead treatments. The objective here is to ensure candidates have a broader background in management accounting techniques.

The syllabus then considers decision-making. Candidates need to appreciate the problems surrounding scarce resources, pricing and make-or-buy decisions, and how this relates to the assessment of performance. Risk and uncertainty are a factor of real-life decisions and candidates need to understand risk and be able to apply some basic methods to help resolve the risks inherent in decision-making.

Budgeting is an important aspect of many accountants’ lives. The syllabus explores different budgeting techniques, including quantitative techniques, and the problems inherent in them. The behavioural aspects of budgeting are important for accountants to understand, and the syllabus includes consideration of the way individuals react to a budget. The preparation of fixed, flexible and incremental budgets is assumed knowledge from Management Accounting (MA).

Standard costing and variances are then built on. All the variances examined in Management Accounting (MA) are assumed knowledge in Performance Management (PM). Mix and yield variances and planning and operational variances are explored here, and the link is made to performance management. It is important for accountants to be able to interpret the numbers that they calculate and discuss what they mean in the context of performance. The syllabus concludes with performance measurement and control. This is a major area of the syllabus.

Note: The Performance Management (PM) exam is part of the Applied Knowledge Level of the ACCA qualification. If you are graduated with a degree accredited by ACCA you are exempt from this subject.

• Identify and discuss the information, systems and developments in technology required for organisations to manage and measure performance.
• Explain and apply cost accounting techniques.
• Select and appropriately apply decision-making techniques to facilitate business decisions and promote efficient and effective use of scarce business resources, appreciating the risks and uncertainty inherent in business and controlling those risks.
• Identify and apply appropriate budgeting techniques and methods for planning and control and use standard costing systems to measure and control business performance and to identify remedial action.
• Assess the performance of an organisation from both a financial and non-financial viewpoint, appreciating the problems of controlling divisionalised businesses and the importance of allowing for external aspects.
• Demonstrate required employability and technology skills