ACA Business and Finance Syllabus Information
The Business and Finance syllabus is intended to give candidates a good understanding of how businesses function and the importance of accounting and finance to the direction and success of a business. Each area within the syllabus is designed to provide specific learning outcomes and equip candidates to perform specific functions in line with assessment requirements.
The main areas covered in order of weighting, especially with regard to possible marks within assessments, are; business objectives and functions, business and organisational structures, the role of finance, the role of the accountancy profession, governance, sustainability, corporate responsibility and ethics, and the external environment.
Listed below are the six key syllabus areas mentioned above along with the intended capabilities as they could be assessed during exam conditions.
Business objectives and functions
The syllabus intends to provide candidates with the ability to identify the main objectives of businesses and fully understand the functions and tasks that are crucial for businesses to meet their objectives.
During assessment, candidates may be asked the following:
a) state the general objectives of businesses
b) state the general objectives of strategic management and specify the strategic management process and interrelationship between a business’s vision, mission and strategic objectives
c) identify the various functional areas within businesses and show how the functions assist the achievement of business objectives
d) identify the nature and functions of organisational management, human resources management and operations management and show how these are influenced by human behaviour
e) identify the relationship between a business’s overall strategy and its functional strategies
f) identify the nature and purpose of strategic plans, business plans and operational plans
g) specify how a strategic plan is converted into fully-integrated business and operational plans
h) identify the main components of the risk management process and show how they operate
i) identify the key issues in relation to risk and crisis management.
Business and organisational structures
Candidates will have reached the level where they are able to accurately specify the nature, characteristics, advantages and disadvantages of various forms of business and organisational structure.
A number of learning outcomes will be assessed during syllabus exams and are intended to equip candidates to be able to:
a. identify the differences between businesses carried out by sole traders, partnerships, limited liability partnerships, alliances and groups, and show the advantages and disadvantages of each of these business structures
b. identify the differences between unincorporated businesses and companies, and show the advantages and disadvantages of incorporation.
c. identify different organisational structures and specify their advantages and disadvantages
The role of finance
Within this syllabus area candidates will be able to identify the purpose of financial data produced by businesses and specify how accounting and finance functions support business operations. They will also be expected to identify sources and methods of finances for businesses, partnerships and individuals.
Candidates will have reached a stage where they will be able to effectively:
a. specify the extent to which financial information:
1. provides for accountability of management to shareholders and other stakeholders
2. reflects business performance
3. is useful to users in making economic decisions
4. meets the information needs of national, social and economic contexts (e.g. national statistical information)
b. specify how accounting and finance functions support businesses in pursuit of their objectives
c. identify the main considerations in establishing and maintaining accounting and financial reporting functions and financial control processes
d. identify, in the context of accounting and other systems, the issues surrounding:
1. information processing
2. information security
3. information management
e. specify why the management of a business require information about performance measurement including non-routine areas such as in supporting an entity’s sustainability management
f. identify the accountant’s role in preparing and presenting information for the management of a business
g. specify the relationship between a business and its bankers and other providers of financial products
h. identify the characteristics, terms and conditions and role of alternative short, medium and long term sources of finance available to different businesses
i. identify the processes by which businesses raise equity, capital and other long term finance
j. identify appropriate methods of financing exports, including:
1. bills of exchange
2. letters of credit
3. export credit insurance
k. specify the general objectives of personal financial management
l. identify the principles of personal financial management and the personal financial management process
The role of the accountancy profession
Candidates are expected to effectively specify the role of the accountancy profession in business and understand why the work of the profession is so important.
During the syllabus assessment, candidates may be required to:
a) identify the importance to the public interest of high quality, accurate financial reporting and assurance
b) specify the rationale for key parts of the profession’s work and the links between technical competence and professional responsibility, including accounting principles, accounting standards, sound business management and the public interest
c) specify the key features of the structure of the accountancy profession, the regulatory framework within which professional accountants work and the ways in which the accountancy profession interacts with other professions.
Governance, corporate responsibility and ethics
Candidates will be able to explain the role that governance plays in the management of a business and specify how businesses can promote corporate governance within their organisation as well as corporate responsibility, sustainability and an ethical culture.
During examination conditions, candidates could be asked to:
a) state the reasons why governance is needed and identify the role that governance plays in the management of a business
b) identify the key stakeholders and their governance needs for a particular business
c) identify and show the distinction between the roles and responsibilities of those charged with corporate governance and those charged with management including the basics of the UK Corporate Governance Code.
d) specify how differences in national and business cultures affect corporate governance
e) identify the roles and responsibilities of the members of the executive board, any supervisory board, the audit committee and others charged with corporate governance, internal audit and external audit
f) identify the roles and responsibilities of those responsible within a business for internal audit and for the external audit relationship
g) specify the nature of ethics, business ethics, sustainability and corporate responsibility
h) specify the policies and procedures a business should implement in order to promote an ethical culture.
Candidates will be able to specify the impact a business has on the environment in which it operates as well as the potential effects and sustainability issues
In the assessment, candidates may be required to:
a) specify the signalling, rewarding and allocating effects of the price mechanism on business (including the concept of price elasticity)
b) specify the potential types of failure of the market mechanism and their effects on business
c) identify the key macroeconomic factors that affect businesses
d) specify the principal effects of regulation upon businesses
e) show how the needs of different stakeholders in a business (e.g. shareholders, the local community, employees, suppliers, customers) impact upon it
f) specify the effects of key international legislation (including the Sarbanes- Oxley Act and trade restrictions) on businesses.
ACA Business and Finance Exam Past Questions
Two past questions have been provided to give potential students an idea of what to expect during the Business and Finance syllabus exams.
Mandrake plc is a large group which processes waste for local authorities. It has stated that it seeks to provide
'our shareholders with increased value, our customers with value for money, our employees with secure and interesting jobs and the public with safe and environmentally sustainable waste disposal.'
This is analysed below into four statements. Identify which ONE is Mandrake plc’s primary business objective.
a) To provide our shareholders with increased value
b) To provide our customers with value for money
c) To provide our employees with secure and interesting jobs
d) To provide the public with safe and environmentally sustainable waste disposal
Malcolm Christopher is a marketing manager with Stone plc. Whilst his marketing director has primary responsibility for the company’s overall marketing strategies, Malcolm has day-to-day responsibility for all aspects of the company’s marketing mix. This means that Malcolm will be responsible for:
a) a set of variables that he manages in order to achieve a desired response from the company’s various target markets
b) budgets setting out the volumes to be sold to the company’s various target markets
c) the sets of different features and benefits that are present in the company’s range of products
d) the types of advertising used by a firm to reach and influence its various target markets
Q1 = A
Q2 = A
Exams can be taken as an e-assessment at various authorized testing centres around the country and can be re-taken up to four times.