Chartered Institute of Management Accountants (CIMA) Management Level: Management Accounting (E2, F2, P2) Syllabus

Management Level: Management Accounting (E2, F2, P2) syllabus — full chapter and topic list

Expand any chapter to see its topics and sub-topics. This is the whole examinable outline for Management Level: Management Accounting (E2, F2, P2) in Chartered Institute of Management Accountants (CIMA), not a summary of it.

1. 1

   E2 — Managing Performance

   4 topics

   • Business models and value creation
     • Components of a business model and the value chain
     • Digital and platform business models
   • Managing people performance
     • Motivation theories and performance management cycles
     • Coaching, mentoring and appraisal systems
   • Managing projects
     • Project lifecycle, scope, time and cost (iron triangle)
     • Network analysis, Gantt charts and PERT
     • Agile vs waterfall approaches
   • Leading and managing teams
     • Leadership styles and situational leadership
     • Team formation (Tuckman) and team roles (Belbin)
2. 2

   F2 — Advanced Financial Reporting

   5 topics

   • Advanced group accounts
     • Associates and joint arrangements (IAS 28, IFRS 11)
     • Step acquisitions, disposals and changes in control
     • Consolidated statement of cash flows
   • Complex financial instruments
     • IFRS 9 classification, measurement and impairment
     • IAS 32 presentation and hedge accounting basics
   • Other reporting standards
     • IAS 12 deferred tax; IAS 37 provisions; IAS 19 pensions
     • IFRS 2 share-based payment; IAS 21 foreign currency
   • Analysing financial performance and position
     • Ratio analysis: profitability, liquidity, gearing, efficiency
     • Interpreting performance for stakeholders
   • Sources of long-term finance
     • Equity, debt and the cost of capital
     • Capital structure and dividend policy
3. 3

   P2 — Advanced Management Accounting

   4 topics

   • Managing the costs of creating value
     • Activity-based management and customer profitability
     • Target costing, lifecycle costing and kaizen costing
     • Value analysis and theory of constraints
   • Capital investment decision making
     • DCF: NPV, IRR, MIRR and payback
     • Relevant cash flows, taxation and inflation
     • Capital rationing and asset replacement
   • Managing and controlling performance
     • Responsibility centres and transfer pricing
     • Divisional performance: ROI, RI and EVA
     • Balanced scorecard and non-financial measures
   • Risk and control
     • Types of risk and quantification methods
     • Internal controls and management of business risk

Management Level: Management Accounting (E2, F2, P2) flashcards for Chartered Institute of Management Accountants (CIMA)

25 of 74 cards from the Management Level: Management Accounting (E2, F2, P2) deck — real questions with worked answers.

1. In strategy, what is a 'business model' and what is its core purpose?

   A business model describes how an organisation creates, delivers and captures value. It explains the logic by which a firm converts resources and capabilities into value for customers (value proposition) while capturing financial value for itself.

2. What are the four interlinked elements of a business model in the 'Business Model Canvas' value-creation logic?

   (1) Value proposition (what is offered), (2) value chain/key activities and resources (how value is created), (3) customer relationships and channels (how value is delivered), and (4) revenue and cost structure (how value is captured).

3. Distinguish 'value creation' from 'value capture'.

   Value creation is generating benefit/utility for customers and stakeholders. Value capture is the portion of that created value the firm retains as profit. A firm can create huge value yet capture little if competition or buyer power is high.

4. In Porter's value chain, name the five primary activities.

   Inbound logistics, operations, outbound logistics, marketing and sales, and service.

5. In Porter's value chain, name the four support activities.

   Firm infrastructure, human resource management, technology development, and procurement.

6. What are the 'six capitals' in the Integrated Reporting (<IR>) framework that drive value creation?

   Financial, manufactured, intellectual, human, social and relationship, and natural capital.

7. What does Mendelow's matrix classify, and on which two axes?

   It classifies stakeholders by Power (high/low) and Interest (high/low), guiding how to manage each group: high power/high interest = Key Players (manage closely); high power/low interest = Keep Satisfied; low power/high interest = Keep Informed; low power/low interest = Minimal Effort.

8. What are the three components of the 'expectancy theory' of motivation (Vroom)?

   Force (motivation) = Expectancy × Instrumentality × Valence. Expectancy = belief effort yields performance; Instrumentality = belief performance yields reward; Valence = the value placed on that reward.

9. Distinguish Herzberg's 'hygiene factors' from 'motivators'.

   Hygiene factors (pay, working conditions, company policy, supervision) cause dissatisfaction if poor but do not motivate. Motivators (achievement, recognition, responsibility, advancement, the work itself) create genuine satisfaction and motivation.

10. In managing people performance, what does a '360-degree appraisal' involve?

    Performance feedback collected from multiple sources around the employee: superiors, subordinates, peers, and sometimes customers, plus self-assessment, giving a rounded view of performance.

11. What is the difference between a 'reward' and a 'recognition' in performance management?

    Rewards are tangible, often financial returns (pay, bonus, benefits) for performance. Recognition is intangible acknowledgement (praise, status, thanks) that satisfies psychological needs.

12. What is the purpose of a disciplinary procedure in HR, and name a typical sequence of stages.

    To correct unacceptable behaviour fairly and consistently. Typical stages: informal counselling, formal verbal warning, written warning, final written warning, then dismissal.

13. What are the four stages of Tuckman's team development model (later five)?

    Forming, storming, norming, performing (and the later addition: adjourning/mourning).

14. In Belbin's team roles, give the three role categories used to group the nine roles.

    Action-oriented roles (Shaper, Implementer, Completer-Finisher), people-oriented roles (Coordinator, Teamworker, Resource Investigator), and thinking/cerebral roles (Plant, Monitor-Evaluator, Specialist).

15. Distinguish 'transactional' from 'transformational' leadership.

    Transactional leadership motivates through exchanges/rewards and contingent reinforcement, focusing on tasks and compliance. Transformational leadership inspires followers through vision, charisma and intellectual stimulation to exceed expectations and embrace change.

16. What does the Blake and Mouton Managerial Grid measure, and what is the ideal position?

    It plots a leader's 'concern for people' (vertical) against 'concern for production' (horizontal), each 1-9. The ideal is 9,9 (Team Management): high concern for both people and task.

17. According to the Hersey-Blanchard Situational Leadership model, name the four leadership styles.

    Telling (S1, directing), Selling (S2, coaching), Participating (S3, supporting), and Delegating (S4) — matched to follower readiness/maturity from low to high.

18. What is the formal definition of a 'project' (per CIMA/PMI)?

    A temporary endeavour undertaken to create a unique product, service or result. It has a defined start and end, a specific objective, and is constrained by time, cost and quality/scope.

19. What are the elements of the project 'iron triangle' (triple constraint)?

    Time, cost, and quality/scope. Changing one constraint affects the others; they bound the project and must be balanced.

20. Name the typical stages of the project life cycle.

    Initiation/identification, planning/definition, execution/implementation, and closure/completion (with monitoring and control running throughout).

21. What is a Gantt chart used for in project management?

    A horizontal bar chart that shows project activities against a timescale, displaying start/finish dates, durations, overlaps and progress — useful for scheduling and monitoring.

22. In network analysis (critical path method), what is the 'critical path'?

    The longest sequence of dependent activities through the network, determining the shortest possible project duration. Activities on it have zero float, so any delay delays the whole project.

23. Define 'float' (slack) in a project network and give the formula for total float.

    Float is the time an activity can be delayed without affecting a later constraint. $$\text{Total float} = \text{Latest finish} - \text{Earliest start} - \text{Duration}$$

24. What is a PERT estimate of expected activity time, and what is the formula?

    PERT uses a weighted average of three estimates. $$t_{e} = \frac{o + 4m + p}{6}$$ where $o$ = optimistic, $m$ = most likely, $p$ = pessimistic time.

25. What is the purpose of a 'Project Initiation Document' (PID)?

    It defines the project — objectives, scope, deliverables, business case, roles, plan, budget and constraints — and acts as the baseline agreement and reference point for control throughout the project.

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