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CIMA Strategic level P3 F3 and E3 content

CIMA Strategic level P3 F3 and E3 content

CIMA Strategic level P3 F3 and E3 content – CIMA Strategic level P3 F3 and E3 content section sets out the specific syllabus for each of the three papers at the strategic level of the qualification. However, it is implicit in each case, that material included in the syllabus for any of the papers at the management or operational levels may also be relevant for the purposes of assessment.

CIMA Strategic level P3 F3 and E3 content Detailed Information

Strategic level is the third and final level of the CIMA Professional Qualification and consists of three subject areas.

  • E3 Strategic management
  • P3 Risk Management
  • F3 Financial strategy

CIMA Strategic level E3 Strategic management complete structure

CIMA Strategic level P3 F3 and E3 content – CIMA Strategic level E3 Strategic management subject is divided into a number of broad syllabus topics.

WeightSyllabus topic
20% A. Interacting with the organisation’s environment
30% B. Evaluating strategic position and strategic options
20% C. Leading change
15% D. Implementing strategy
15% E. The role of information systems in organisational strategy

CIMA Strategic level P3 F3 and E3 content

Learning Outcomes and Syllabus Content of E3:

ALL learning outcomes will be tested in this exam and so it is important you cover each learning outcome below for each section of the exam.

I recommend you look to truly understand a learning outcome through reading, note taking, regular question practice and review, before moving onto the next.

If you can master all the learning outcomes, you will pass!

Section A: Interacting with the Organisation’s Environment – 20%

Learning outcomes:

  • A1(a) Evaluate the influence and impact of the external environment on an organisation and its Strategy
  • A1(b) Recommend approaches to business/government relations and to relations with society
  • A1(c) Discuss the drivers of external demands for environmental sustainability and corporate social responsibility and the organisation’s response
  • A1(d) Recommend how to build and manage strategic relationships with stakeholders (including suppliers, customers, owners, government and the wider society).
  • A2(a) Evaluate ethical issues and their resolution within a range of organisational contexts

Key topics/theories:

  • SWOT analysis and PEST(EL)
  • Porter’s Five forces model
  • Competitor analysis
  • Mendelow’s power/ interest matrix
  • Corporate Social Responsibility (CSR)
  • Supply Chain Management (SCM)
  • Business ethics and the CIMA Code of Ethics

Section B: Evaluating Strategic Position and Strategic Options – 30%

Learning outcomes:

  • B1(a) Evaluate the processes of strategic analysis and strategic options generation
  • B1(b) Recommend strategic options
  • B1(c) Discuss the role and responsibilities of directors in the strategy formulation and implementation process
  • B2(a) Evaluate strategic analysis tools
  • B2(b) Recommend how to manage the product portfolio of an organisation to support the organisation’s strategic goals
  • B2(c) Produce an organisation’s Value Chain.

Key topics/theories:

  • Strategy formulation
  • Scenario planning
  • Ansoff’s product/ market growth framework
  • Porter’s generic strategies
  • Boston Consulting Group (BCG)’s growth/ share matrix
  • Product life cycle
  • Porter’s value chain

Section C:  Leading Change – 20%

Learning outcomes:

  • C1 (a) Evaluate the key impacts of organisational change on organisations
  • C1 (b) Evaluate the role of leadership in managing the change process and building and managing effective teams
  • C2 (a) Evaluate tools, techniques and strategies for managing and leading the change process
  • C3 (a) Evaluate the role of the change leader in supporting strategy implementation
  • C3 (b) Recommend appropriate leadership styles within a range of organisational change contexts.

Key topics/theories:

  • Change management and Business Process Re-engineering (BPR
  • Greiner’s 5 stages of growth
  • Lewin’s 3 stage change model (Unfreeze-Change-Refreeze)

Section D: Implementing Strategy – 15%

  • D1 (a) Evaluate alternative models of strategic performance measurement in a range of business contexts
  • D1 (b) Recommend solutions to problems in strategic performance measurement.

Key topics/theories:

  • Bench marking
  • The balance scorecard
  • KPI’s and CSF’s
  • Shareholder value added (SVA) and economic value added (EVA).
  • The performance pyramid
  • Controls – corporate strategy (long term), budgetary control (medium term), variance analysis (short term)

Section E: The Role of Information Systems in Organisational Strategy – 15%

Learning outcomes:

  • E1 (a) Evaluate the information systems required to sustain the organisation
  • E1 (b) Advise managers on the development of strategies for knowledge management.
  • E2 (a) Evaluate the impact of IT/IS on an organisation and its strategy
  • E2 (b) Evaluate the strategic and competitive impact of information systems, including the potential contribution of Big Data.

Key topics/theories:

  • Knowledge management
  • Data mining
  • Data warehousing
  • IS and IT strategies

Must Read :

CIMA Strategic level P3 Risk Management complete structure

CIMA Strategic level P3 Risk Management subject is divided into a number of broad syllabus topics.

WeightSyllabus topic
20% A. Identification, classification and evaluation of risk
20% B. Responses to strategic risk
20% C. Internal controls to manage risk
20% D. Managing risks associated with cash flows
20% E. Managing risks associated with capital investment decisions

CIMA Strategic level P3 F3 and E3 content

Learning Outcomes and Syllabus Content of P3

ALL learning outcomes will be tested in this exam and so it is important you cover each learning outcome below for each section of the exam.

I recommend you look to truly understand a learning outcome through reading, note taking, regular question practice and review, before moving onto the next.

If you can master all the learning outcomes, you will pass!

Section A: Identification, Classification and Evaluation of Risk – 20%

Learning outcomes:

  • A1 (a) Identify the types of risk facing an organisation
  • A1 (b) Evaluate the organisation’s ability to bear identified risks
  • A1 (c) Recommend responses to identified risks.
  • A2 (a) Recommend techniques that will enable the board to discharge its responsibilities with respect to managing risks
  • A2 (b) Advise the board on its responsibilities for reporting risks to shareholders and other stakeholders.
  • A3 (a) Evaluate ethical, social and environmental issues arising from risk management.

Key topics/theories:

  • Upside and downside risks arising from internal and external source
  • Risks arising from international operations, such as cultural differences and differences between legal systems
  • Strategic and operational risks
  • Quantification of risk exposures (impact if an adverse event occurs) and their expected values, taking account of likelihood
  • Risk map representation of risk exposures as a basis for reporting and analysing risks
  • Enterprise Risk Management and its components
  • Risk mitigation including TARA – transfer, avoid, reduce, accept
  • Gross and net risks.
  • Assurance mapping and similar techniques for describing risks and their associated responses
  • The control environment.
  • Internal control.
  • Risk register
  • Risk reports and stakeholder responses
  • The identification of ethical dilemmas associated with risk management.
  • Reputational risks associated with social and environmental impacts.

Section B: Responses to Strategic Risk – 20%

Learning outcomes:

  • B1 (a) Recommend appropriate measures for the strategic control and direction of various types of organisations
  • B1 (b) Recommend solutions for the risks of dysfunctional behaviour arising from the associated models of performance measurement
  • B1 (c) Advise managers of the risks in the development of strategies for information systems that support the organisation’s strategic requirements.
  • B2 (a) Evaluate the risks of unethical behaviour.
  • B3 (a) Evaluate the risks associated with poor governance structures.

Key topics/theories:

  • Business unit performance and appraisal, including transfer pricing and taxation, reward systems and incentives.
  • Non-financial measures and their interaction with financial measures.
  • Risks of performance measurement, including the Balanced Scorecard (BSC).
  • Lean systems.
  • Cost of quality.
  • Big Data as a strategic resource
  • Dysfunctional behaviour associated with measures of control and direction
  • The purpose and contents of information systems strategies, and the need for strategy complementary to the corporate and individual business strategies
  • Ethical issues identified in the CIMA Code of Ethics for Professional Accountants.
  • Application of the CIMA Code of Ethics for Professional Accountants.
  • The board’s responsibilities for the management of stakeholders’ interests.
  • The separation of the roles of CEO and chairman.
  • The role of non-executive directors.
  • The roles of audit committee, remuneration committee, risk committee and nominations committee.
  • Directors’ remuneration.
  • The agency implications of salaries, bonuses, performance-related pay, executive share options and benefits in kind

Section C: Internal controls to manage risk – 20%

Learning outcomes:

  • C1 (a) Evaluate the appropriateness of control systems for the management of an organisation.
  • C2 (a) Evaluate the essential features of internal control systems for identifying, assessing and managing risks.
  • C3 (a) Evaluate the effective planning and management of internal audit and internal audit investigations.

Key topics/theories:

  • Application of control systems and related theory to the design of management accounting control systems and information systems in general.
  • Control systems within functional areas of a business including HR, sales, purchases, treasury, distribution, IT.
  • Identification of appropriate responsibility and control centres within the organisation.
  • Performance target setting.
  • Performance appraisal and feedback.
  • Cost of quality applied to the management accounting function and ‘getting things right first time’.
  • Responses to risks in control systems for management
  • Minimising the risk of fraud: fraud policy statements, effective recruitment policies and good internal controls, such as approval procedures and separation of functions.
  • The risk manager role as distinct from that of internal auditor.
  • Purposes of internal control: the achievement of an entity’s objectives, effectiveness and efficiency of operations.
  • Identifying and evaluating control weaknesses.
  • Identifying and evaluating compliance failures.
  • Operational features of internal control systems, including embedding such systems in a company’s operations, responsiveness to evolving risks and timely reporting to management.
  • The pervasive nature of internal control and the need for employee training.
  • Costs and benefits of maintaining the internal control system.
  • Disaster recovery.
  • Forms of internal audit: compliance audit, fraud investigation, value for money audit/management audit, social and environmental audit.
  • Operation of internal audit, the assessment of audit risk and the process of analytical review, including different types of bench marking, their use and limitations.
  • Effective internal audit: independence, staffing and resourcing, organisational remit.
  • The preparation and interpretation of the internal audit report

Section D: Managing risks associated with cash flows – 20%

Learning outcomes:

  • D1 (a) Evaluate financial risks facing an organisation.
  • D2 (a) Advise on the effects of economic factors that affect future cash flows from international operations
  • D2 (b) Evaluate appropriate methods for the identification and management of financial risks associated with international operations
  • D2 (c) Evaluate appropriate methods for the identification and management of financial risks associated with debt finance.

Key topics/theories:

  • Sources of financial risk associated with international operations.
  • Transaction, translation, economic and political risk.
  • Quantification of risk exposures, their sensitivities to changes in external conditions and their expected values.
  • Exposure to interest rate risks.
  • Exchange rate theory and the impact of differential inflation rates on forecast exchange rates.
  • Theory and forecasting of exchange rates (e.g. interest rate parity, purchasing power parity and the Fisher effect).
  • Value at risk
  • Minimising political risk.
  • Responses to economic transaction and translation risks.
  • Operation and features of the more common instruments for managing interest rate risk: swaps, forward rate agreements, futures and options.
  • Techniques for combining options in order to achieve a specific risk profile: caps, collars and floors.
  • Internal hedging techniques
  • Operation and features of the more common instruments for managing currency risk: swaps, forward contracts, money market hedges, futures and options.

Note: The Black Scholes option pricing model will not be tested numerically.  However, an understanding of the variables which will influence the value of an option will be assumed

Section E: Managing risks associated with capital investment decisions – 20%

Learning outcomes:

  • E1 (a) Evaluate investment projects
  • E1 (b) Evaluate conflicts that may arise from capital investment decisions
  • E1 (c) Evaluate the outcomes of projects post implementation and post completion

Key topics/theories:

  • Cost of capital and risk.
  • Recognising risk using the certainty equivalent method (when given a risk free rate and certainty equivalent values).
  • Adjusted present value. (NB The Two step method may be tested for debt introduced permanently and debt in place for the duration of the project)
  • Managing conflicts between different stakeholder groups (profit maximisation versus wealth maximisation).
  • Managing conflicts arising from performance indicators.
  • Monitoring the implementation of plans.
  • Post completion audit

Must Read :

CIMA Strategic level F3 Financial strategy complete structure

CIMA Strategic level P3 F3 and E3 content

F3 syllabus is split into 3 topic areas:

A: Formulation of Financial Strategy (25%)

B. Financing Decision (30%)

C: Investment decision and project Control (45%)

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