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Overview of the Professional Level

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Published: 21 Sep 2021 Update History

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In this guide we will introduce the Professional Level exams, the professional skills assessed, how to study for an Professional Level exam, challenges and how to prepare.

Introducing the exams

Each Professional Level exam is assessed by a 2.5 hour exam, except for Financial Accounting and Reporting, which is three hours. The Professional Level exams are computer-based and are available to sit every March, June, September, and December. Business Planning: Banking and Business Planning: Insurance will only be available at the June, September, and December sittings. The pass mark for each exam is 55%. Students have four attempts to pass the exam. 

The exams are flexible and can be taken in any order. However, the knowledge learnt in the Tax Compliance exam is required in the Business Planning: Taxation exam, so it is best to do the Tax Compliance exam first. 

The Professional Level exams build upon the knowledge of the Certificate Level. For instance, Accounting leads into Financial Accounting and Reporting, Assurance leads into Audit and Assurance and Principles of Taxation leads into Tax Compliance and Business Planning: Taxation. 

The Professional Level also acts as an important stepping-stone to the Advanced Level, with Corporate Reporting containing knowledge of Financial Accounting Reporting and Audit and Assurance and Strategic Business Management building on Financial Management and Business Strategy and Technology. Also, the approach used to examine Business Planning and Business Strategy and Technology modules will help you to progress to the Advanced Level.

The key difference between the Professional and Certificate Level is the need for application of knowledge into scenario-based questions. Knowledge alone will not get you the pass.

The Professional Level not only tests you on your technical competence but also develops skills of ethics and professionalism (demonstrating objectivity, integrity, and professional behaviour), your problem solving (by considering different perspectives and making informed recommendations), decision making (demonstrating scepticism and evaluating risk) and adding value (by showing resilience, leading by example and improving company performance).

Each exam explained

Financial Accounting and Reporting: IFRS

The Financial Accounting and Reporting: IFRS exam builds on the knowledge and skills gained in the Certificate Level Accounting module with regards to the preparation of single entity financial statements and the related accounting standards. New topics examined include the preparation of consolidated financial statements as well as additional, more complex, accounting standards. 

The exam and will comprise four questions, involving a mixture of numerical and written tasks.

Financial Accounting and Reporting: UK GAAP

The Financial Accounting and Reporting: UK GAAP exam builds on the knowledge and skills gained in the Certificate Level Accounting module with regards to the preparation of single entity financial statements and the related accounting standards. New topics examined include the preparation of consolidated financial statements as well as additional, more complex accounting standards. 

The exam is made up of four questions, involving a mixture of numerical and written tasks.

Audit and Assurance

The Audit and Assurance exam puts students into situations where they may be evaluating ethical issues, planning and audit and identifying audit risks, commenting, and proposing modifications to audit reports or providing management letter points regarding internal control deficiencies. If you can master these areas, you will do well in this exam. 

However, to master these areas requires good exam technique with application and justification of answers utilising the scenario. This exam is 25% knowledge and 75% application.

Financial Management

The Financial Management exam focuses on four key interlinked business decisions: investment decisions, financing decisions, dividend decisions and risk management decisions. On average the exam tends to be split evenly in terms of calculation-based questions v discursive or explanation-based questions. Students therefore need to be able to explain and discuss models and theories and cannot rely entirely on calculations to pass the exam. 

The exam is made up of three questions. Each question will likely comprise one larger requirement followed by anything up to five or six smaller requirements.

Tax Compliance

The Tax Compliance exam builds on the knowledge learned in the Certificate Level Principles of Taxation module about income tax, national insurance, capital gains tax, corporation tax and VAT but also extends the scope of the syllabus to include inheritance tax and stamp taxes. The exam is largely computational in nature and 75% based on knowledge (25% skills). There are always five questions, each testing one or two taxes. There is a large volume of technical subject matter which you will need to master and question practise is vital.

Business Strategy and Technology

Business Strategy and Technology incorporates the knowledge learned in Business, Technology and Finance as well as analysis skills learned in the Management Information exam. However, Business Strategy and Technology makes this knowledge more practical by expecting you to apply it to real business scenarios. Performing well in this exam requires written and communication skills allowing you to take an abstract theory and apply it to a real-world situation. The exam is 30% knowledge, with the remainder of the marks earned by evaluating, analysing and explaining key business issues. This exam helps to develop your written abilities which are further challenged in the Advanced Level Case Study exam.

Business Planning: Taxation

The Business Planning: Taxation exam incorporates the knowledge learned in Tax Compliance but builds on this knowledge by introducing new important topics such as share schemes, venture capital schemes, anti-avoidance legislation for large and small businesses, corporate reorganisations and also places much more emphasis on international aspects of taxation. The exam involves much more writing than Tax Compliance, although explanations do need to be accompanied by computations. 75% of the marks are based on skills (only 25% knowledge). There are always three scenario-based questions, each testing multiple taxes and you will generally be expected to take a proactive stance, recommending the best course of action from several alternatives. There is a large volume of technical subject matter, but this is an open book exam so knowing how to apply knowledge is more important than memorising rules.

Business Planning: Banking

Business Planning: Banking covers financial and regulatory reporting for banks, combined with the risks and approaches to audit and assurance services to those banks. The style of the exam is the same as the Advanced Level Corporate Reporting and Strategic Business Management exams. There are three questions, marks are split approximately question one, 40 marks, question two, 30 marks and question three, 30 marks. The exam is completely open book so any material can be taken in. 

There are multiple requirements for each question, however the mark scheme is not split between the individual requirements.

Business Planning: Insurance

Business Planning: Insurance is a specialist exam that allows you to develop a deep understanding of “the risk business”. Insurance companies take on the risks that individuals and other companies do not want.

You will learn about the interesting and complicated nature of assessing and managing risk, both in terms of the liabilities insurers assume and how they have to manage the assets to provide the returns and liquidity that they need to pay the expected future claims on policies.

The insurance business is complicated, but rewarding, with plenty of career opportunities.

What to expect when sitting an exam

The Professional Level exams are very application-based. During the exam, you will be provided with comprehensive case studies including narrative and numbers. Passing these exams requires a demonstration of how you can apply knowledge to practical situations as opposed to the reciting the knowledge itself. 

The Professional Level will require detailed responses to questions (no multiple choice here). Each question starts with a verb, and verbs require different answers. For instance, to explain something is very different to evaluating something. So, making sure you appreciate the verb to generate the required answer is vital to passing.

Verb Requirement
State Short, clear point of fact
Define Give the meaning of. This means… 
Describe Communicate the features of 
Distinguish/compare and contrast Highlight the differences between 
Explain Give the relevant facts in context of a given scenario 
Identify List appropriate points 
Prepare/produce To create or construct 
Analyse Examine in detail 
Evaluate/advise To appraise and assess, in depth, positives and negatives 
Recommend To choose and argue an appropriate course of action 

What to look out for

Busy question requirements

Make sure you identify and then answer all the elements of a question. Look out for ‘and’s’ within parts i) and ii) to ensure you answer the full question. Only answering half the question may mean you only get half the marks. Get into the habit of reading the requirement again before you more to the next question.

Don’t re-write the question

Many students like to include the question in their answer. This is not necessary. The marker knows the question already, so it is not a good use of your valuable time. However, do make sure you properly reference your answers, so the marker knows what question you are answering. This is as easy as noting Q1 a) for example.

Effective time management

In an exam your challenge is to complete it in time. If you over-do any question you will be forfeiting the marks of the next question. Many questions have more potential marks than can be awarded. For instance, if you write a 10-mark answer – the examiners answer may contain 15 marks of ideas. Your challenge is to come up with 10 of them. If you over answer, your mark will be capped at 10, and you forfeit the marks on the next question as you will run out of time.

So, look at an exam as a challenge, the challenge being to spread your knowledge over the whole exam. Tease the examiner with what you know, give them confidence that you could write more but move on as the time for that question runs out.

Effective planning

Try not to jump straight in. Sketch out the route you will take through your answer. How will you spread your ideas? How will you use the scenario to add depth? And how will your spread your time over the number of marks available?

Answer the question asked

Read the requirement carefully. Leading up to the exam you may have practised many questions, and these may be fresh in your mind. It is vital you answer the question asked rather than the one you imagined. One clever way to do this is to use a key word from the requirement to answer the question. For instance: 

Question: Why is corporate governance important to XYZ plc?
Answer: Using the key word ‘important’
One reason it is important is because…
Another reason it is important because…
A final reason it is important because…

Effective layouts

Always present your answers in the way you have been taught, similar to creating a set of accounts or producing a calculation. If you take shortcuts your answer will look different from the examiners, and in doing so your answer is going to take time and energy of the marker to understand. So do follow the proformas, no short cuts. If your answer looks like the examiners it will be easy to mark!

A few final tips

Waffle – do not do it!
State the obvious – it is not obvious to everyone
Reference your workings – markers do not have time to hunt things down
Be well practised on the exam software

Preparing for an exam

Practice, practice, practice

It is important to get early exposure to past exam questions, this will help you to refine the all-important exam techniques required to pass. If you do plenty of practise you will be rewarded with familiarity in the exam. You should also aim to do the practise using the exam software. This will get you used to formatting your answers as well as annotating the question. ICAEW provides questions from the question bank within the practise software.

Practise what you do not know, not what you do know

When revising it is all very tempting to do a question you know you can do. Then to look at the answer and see you got it right! However, this is not an efficient use of you time. We all know that when it comes to the exam it will be inevitably full of the stuff we do not know, rather than the stuff we do. It will contain that subject you pray will not come up. So, make sure you are prepared for that. Practise what you do not know, what your least confident with and hit it head on!

Keep your practice interesting

It is not always effective or feasible to be doing questions in full all the time. So, vary your approach. Use tables or spider diagrams to plan answers. Use questions to research topics. However, it is important to do a significant proportion of exam question practise in full and to time in rehearsal for the real exam.

Try to study in short bursts, say 30 minutes on and 10 minutes off. Reward yourself with a song, YouTube video or even a biscuit.

Stay clear of distractions

Study distractions can either be internal or external. Internal study distractions include physiological needs and emotional thoughts. External study distractions include technology and people.

  • Deal with hunger first
  • Put the phone on do not disturb
  • Find the perfect spot
  • Take frequent breaks

Learn from your mistakes

A vital part of learning is getting it wrong. After each mistake we evaluate what went wrong, why it was wrong and how we might do it differently next time. Every mistake you make leading up to the exam is then one less mistake you will make in the exam. So celebrate mistakes and learn from them! 

Make sure you carefully mark your own answers. Take as long reviewing and marking as you did doing the question. Make changes in rewrite comments of what went wrong and why it was wrong as this will help facilitate learning from your mistakes.