ACCA Applied Skills exams: The second phase

ACCA Applied Skills is the second level of the full ACCA qualification: six exams, Corporate and Business Law (LW), Performance Management (PM), Taxation (TX), Financial Reporting (FR), Audit and Assurance (AA), and Financial Management (FM), that build on Applied Knowledge and lead to the Advanced Diploma in Accounting and Business.

ACCA Applied Skills is the second tier of the ACCA certification, comprising six required papers (or tests) covering corporate and business law, performance management, taxation, financial reporting, audit and assurance, and financial management. These exams, which can be taken in any order, prepare candidates for entry-level to mid-level accounting roles and support career growth for global accountants on the path to full certification. Completing all six exams (after Applied Knowledge), along with the Ethics and Professional Skills module, earns candidates the ACCA’s Advanced Diploma in Accounting and Business.

The Applied Skills level targets those with some accounting experience, such as recent college or master’s graduates in relevant fields or financial sector employees with a few years of work history. For those who have already completed the Applied Knowledge tests or qualified for exemptions, the Applied Skills level allows candidates to proceed to the final set of examinations, Strategic Professional.

ACCA is replacing this structure: June 2027 is the final sitting of the Applied Skills exams, after which students move to the new ACCA Qualification.

The ACCA certification explained

The ACCA is a worldwide recognized accounting credential covering both public practice and private management accounting. The Association of Chartered Certified Accountants (ACCA), which offers this certification, is an internationally accredited body that delivers a range of qualifications and diploma programs in collaboration with leading educational institutions and universities. For U.S. accounting professionals, obtaining the ACCA can complement other licenses in public, management, and financial accounting and enhance access to international accounting careers.

To obtain full ACCA certification, you need to fulfill several requirements:

1. Meet the minimum educational standards, typically by earning secondary-school credentials in key subjects like mathematics and English, or an equivalent recognized educational qualification
2. Pay any requisite ACCA fees, such as the registration fee of £89, the annual subscription of £140, and exam costs
3. Fulfill the required levels and exams of the ACCA qualification
4. Gain three years (36 months) of relevant practical experience in an accounting or finance role
5. Complete an ethics and professional skills module created by ACCA.

The complete ACCA certification involves passing up to 13 exams, though the number may be lower based on a candidate’s educational background, work experience, and any exemptions received. The exam levels are designed to progress candidates from basic accounting and business principles to advanced topics like auditing, strategic planning, ethics, and judgment.

This comprehensive curriculum equips ACCA-certified professionals with skills applicable to numerous roles in accounting and finance across various industries. For those in the early- to mid-career stages, passing the Applied Skills assessments is a crucial step toward full certification.

The six ACCA Applied Skills exams

The ACCA’s six Applied Skills exams go into further specialized content than the Applied Knowledge exams, building upon the foundations of finance and accounting to introduce new topics and concepts:

• Corporate and Business Law (LW): Covers legal principles and introduces key concepts in contract, company, and employment law.
• Performance Management (PM): Gains knowledge of cost and management accounting methods used for decision-making and assessing performance.
• Taxation (TX): Encompasses tax systems, particularly in the UK, including personal, corporate, and VAT taxes.
• Financial Reporting (FR): Emphasizes expertise in financial reporting, including International Financial Reporting Standards (IFRS).
  • Note that in the U.S., Generally Accepted Accounting Principles (GAAP) are generally used, so you must familiarize yourself with IFRS if pursuing ACCA.
• Audit and Assurance (AA): Improves understanding of auditing procedures, assurance activities, and compliance requirements.
• Financial Management (FM): Encompasses business finance, risk assessment, and investment evaluation.

Most of these tests are session-based and available during the exam sessions in March, June, September, and December (Corporate and Business Law is offered on demand, like the Applied Knowledge exams), so candidates must register by specific dates. In the U.S., ACCA delivers both on-demand and session exams remotely, so you take them from home after passing ACCA’s system checks.

General requirements for the Applied Skills level are A) completing the Applied Knowledge portion of the ACCA certification and holding the ACCA Diploma in Accounting and Business (RQF Level 4), or B) receiving university exemptions (if you meet certain prerequisites, like having a bachelor’s degree, you can pay a fee to skip certain or all exams in the Applied Skills level).

Once you’ve passed all six of these modular exams with at least 50%, you receive the ACCA Advanced Diploma in Accounting and Business. Here’s a useful overview and brief ACCA study guide for the Applied Skills exams. You’ll notice that most exams include a combination of objective-test, multi-step, and constructed-response questions, the latter of which require you to use information from the question to calculate unique answers, use spreadsheet tools, and sometimes respond using long-form text:

Corporate and Business Law (LW, formerly F4)

Format: Section A (objective test questions, 70 marks) and Section B (five multi-task questions, 30 marks)
Time: 2 hours
Cost (standard entry): approximately £160 (U.S., always confirm current fee)
Exam dates: on demand, year-round

Purpose: Develops a core level of knowledge and skills around legal frameworks in the context of business and accounting.

Performance Management (PM, formerly F5)

Format: Section A (15 objective test questions, two marks each), Section B (three questions with five objective items each, two marks per item), and Section C (two constructed-response questions, 20 marks each)
Time: 3 hours
Cost (standard entry): approximately £160 (U.S.)
Exam dates: March, June, September, December

Purpose: Provides the knowledge and skills to apply quantitative and qualitative information for planning, decision-making, performance evaluation, and control in management accounting.

Taxation (TX, formerly F6)

Format: Section A (15 objective test questions, two marks each), Section B (three questions, each with five two-mark objective test items), and Section C (one 10-mark and two 15-mark constructed-response questions)
Time: 3 hours
Cost (standard entry): approximately £160 (U.S.)
Exam dates: March, June, September, December

Purpose: Tests the ability to compute tax liabilities and apply tax planning techniques for individuals and companies.

Financial Reporting (FR, formerly F7)

Format: Section A (15 objective test questions), Section B (three 10-mark cases, with OT questions of 2-marks each), and Section C (two constructed-response questions)
Time: 3 hours
Cost (standard entry): approximately £160 (U.S.)
Exam dates: March, June, September, December

Purpose: Assesses the skills needed to apply accounting standards and the conceptual framework in the preparation of financial statements, as well as the ability to analyze and interpret them.

Audit and Assurance (AA, formerly F8)

Format: Section A (three objective/case-based questions) and Section B (constructed-response questions)
Time: 3 hours
Cost (standard entry): approximately £160 (U.S.)
Exam dates: March, June, September, December

Purpose: Covers auditing, assurance engagement, and its application in the context of professional regulatory compliance.

Financial Management (FM, formerly F9)

Format: Section A (15 objective test questions), Section B (three multi-task questions containing five objective test questions), and Section C (two constructed-response questions)
Time: 3 hours
Cost (standard entry): approximately £160 (U.S.)
Exam dates: March, June, September, December

Purpose: Assesses skills needed to be a financial and business manager in relation to investment, financing, and dividend policy decisions.

Completing the Applied Skills level enables new finance and accounting professionals to pursue roles as finance associates, business analysts, or early- to mid-level accountants, providing them with a foundation to advance confidently in their careers and certification paths. The diversity in exam focus areas enables candidates to target roles in management accounting at private firms, financial accounting at large corporations, client-facing roles in public accounting, banking or similar positions at financial institutions, or accounting-related jobs in government.

ACCA estimates that the Advanced Diploma can be achieved in 12 to 18 months, depending on background and the level of preparation needed for each exam. Candidates who are employed may be eligible for sponsorship or reduced fees through their firm, thereby lessening the net cost of certification.

ACCA Ethics and Professional Skills module

Finally, the ACCA Ethics and Professional Skills module (EPSM) is a mandatory course that enhances candidates’ communication, leadership, and ethical decision-making skills. You cannot obtain full ACCA certification without first completing the EPSM, and ACCA advises completing it before you attempt any Strategic Professional exam, so most students take it during Applied Skills.

How ACCA Applied Skills exams are scored

ACCA Applied Skills exam scoring is straightforward: all exams are marked out of 100, and test-takers need 50% to pass.

ACCA Applied Skills pass rates

Pass rates vary widely across the Applied Skills exams, reflecting their differing levels of difficulty.

For the most accurate figures, check ACCA’s official pass-rate publication before relying on any specific percentage, since rates change every session.

How to prepare for the ACCA Applied Skills exams

Studying for ACCA papers can include using official resources, courses, or self-study programs. Candidates are allowed to choose from:

• Distance learning
• Online revision via ACCA-X, the learning platform
• Revision courses
• Full-time courses
• Part-time/weekend courses

The ACCA partners with learning companies and educational institutions worldwide, including many U.S.-based university partnerships.

When approaching the ACCA Applied Skills tests, follow these tips for the most positive and effective studying experience:

• Set aside ample time to prepare for all six exams
• Take multiple full-length practice tests for each and assess your progress
• Use realistic practice questions to review new concepts and target difficult areas
• Always read questions carefully: the ACCA tests are known for their sometimes complicated financial language, so make sure you understand what a question is asking

Most people approach the exams one at a time. When planning your ACCA Applied Skills exam order, Corporate and Business Law (LW) is a common starting point because it’s offered on demand and is relatively self-contained. Having a clear structure and plan, as well as an understanding of each exam’s content and format, will remove uncertainty and increase confidence.

What’s next: Strategic Professional ACCA exams

Completing the ACCA Applied Skills exams is a huge accomplishment, but it’s not the end of your certification journey. Here’s what advancing to the next levels looks like:

ACCA Strategic Professional

The final level, Strategic Professional, consists of two mandatory (Essentials) exams plus two Options exams chosen by the applicant from four, depending on the area they specialize in. Like the Applied Skills tests, these are session-based papers administered during the ACCA testing periods:

• Strategic Business Reporting (SBR): Covers financial reporting and analysis, emphasizing IFRS applications and ethical considerations.
• Strategic Business Leader (SBL): A case-study-based test assessing governance, risk management, and leadership skills.

Candidates then choose two of the four Option exams:

• Advanced Financial Management (AFM): Further develops expertise in strategic financial and accounting management.
• Advanced Performance Management (APM): Expands knowledge of business strategy skills.
• Advanced Taxation (ATX): Enhances skills in complex taxation issues.
• Advanced Audit and Assurance (AAA): Prepares professionals for advanced auditing and assurance responsibilities.

These are among the most demanding exams in the process, designed to develop high-level, ethical skills.

Closing thoughts

Completing the ACCA Applied Skills portion of the full qualification takes time and drive, so understanding its structure and preparing adequately is a must. These exams offer a thorough overview of accounting and business principles, going into further depth than the Applied Knowledge tests and preparing accounting professionals for more advanced roles. Those entering the ACCA certification process with a university degree or several years of work experience can jump straight to this level. Applied Skills also help prepare individuals for the next and final stage, Strategic Professional, for full qualification. These diverse exams reflect the wide range of responsibilities accountants encounter, so it’s important to approach each one with focus, dedication, and a willingness to learn new, adaptable skills.