Examiner reports: common mistakes at Q2022 Level 3

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This article has been written to help you familiarise yourself with some of the units in AAT’s level 3 Diploma in Accounting.

It is based on the feedback available in the examiner’s reports, which “provide information on the overall performance of students” and “are intended to be constructive, informative and provide further understanding of the specification content and assessment requirements.”  The reports are published annually, but as the new specification of the qualification only started in September 2022, the current reports are interim versions and are based on data from the initial stages of the qualification’s launch.

That said, they highlight key areas of strength and, more importantly, areas for improvement.  Therefore, they contain really useful nuggets of information.  Because if you know in general, which topics/tasks most students find hard, you can use that information to guide your learning and revision and ensure you avoid common mistakes. Although, be careful not to neglect topics just because people generally perform well in them!

So, to encourage you to use them, here is a summary and links to other Comments that will support your understanding of the topics.*  The reports can be found in the learning portal (login required).

Business Awareness (BUAW)

Overall pass rate: 63%

Use of time: on average, students only use 76% of the time available to them but spend more than the notional time allocated on the written tasks.

Strongest tasks: 1  – Organisations and Ethics for Accountants, and 5 – Micro-economic Environment and Sustainability

Weakest tasks: 4 and 6

Task 4 – Ethical and Legal Compliance

This task requires written answers, and you need to understand:

  • money laundering regulations and the process for reporting money laundering.  In particular, the three-stage process of money laundering and the actions which should be taken to report money laundering, including the information to be included in the report and the timescales for reporting.

Task 6 – Communication and Visualisation

This task requires written answers, and you have to:

  • interpret visual information to indicate relationships and trends.  This requires a high-level view to be taken to identify and understand the patterns in the presented data.
  • understand the importance of visualising information in different formats and identify the appropriate format to communicate effectively to meet specific stakeholder requirements.

Other remarks regarding Task 2 – Analysing the External Environment

This task includes written answers in relation to completing a PESTLE analysis, and the report states that students struggle to apply their analysis to the given scenario.  In particular, they are weak at identifying relevant threats and then explaining why they are threats and what appropriate actions can be taken to address them.

The report makes a number of other points about exam technique in relation to written answers, including the fact that students:

  • don’t always answer the question asked and/or don’t answer it fully
    • Try to use the number of marks available to help you gauge how much to write, and always check your answer against the question once you’ve written it to ensure you’ve answered it completely
  • don’t pay attention to the command verb used
  • don’t use the information given in the scenario and/or make unrelated general comments
    • Ensure you always refer to the scenario to support your points, that way, you’ll maximise the marks you can be awarded.

Q22 Comment articles specifically about this unit:

Relevant AQ16 articles:

Financial Accounting: Preparing Financial Statements (FAPS)

Overall pass rate: 57%

Use of time: only 80% used on average

Strongest tasks: 1  – Using Day Books, and Accounting for the Monitoring of Non-current Assets, and 4 – Producing Financial Statements for Sole Traders and Partnerships

Weakest tasks: 2 and 3

Weak areas in this unit include:

Task 2 – Recording Period End Adjustments

  • accounting for irrecoverable debts recovered
  • accounting for accruals and prepayments when not asked to complete the relevant expense or income account

Task 3 – Producing, Adjusting, Checking and Extending the Trial Balance

  • understanding the difference between the extended trial balance of a partnership and a sole trader
  • posting to accounts in the memorandum (subsidiary) ledgers
  • taking into account the VAT status of organisations when considering the effect of accounting transactions on elements of the accounting equation.

The report also mentions that students struggle to identify causes of changes in profitability ratios, an area that is covered in Task 5.

There are lots of articles to support this unit, and whilst they were originally written to cover tricky areas in the AQ16 units, the topics are fundamentally the same and it is likely that students will still find the same key areas difficult.  Therefore, the following are a good place to start.

Relevant AQ16 articles:

Understanding irrecoverable and doubtful debts
Accruals concept parts 1 & 2
How to successfully extend a trial balance
Accounting adjustments in an ETB or journals series
Using a four line journal to correct errors
The non-current assets cycle series
Accounting principles and why you should understand them
How to prepare closing inventory for financial statements
Capital accounts
Appropriation accounts
Current accounts
Cost of goods sold
Margins and mark-ups

Tax Processes for Business (TPFB)

Overall pass rate: 56%

Use of time: 86% used on average

Strongest tasks: 2  – Calculating and Accounting for VAT, 3 –  Recovery of Input Tax and 8 – Reporting Information on VAT and Payroll

Weakest tasks: 5 and 7

The report notes that in order to improve performance students should pay particular attention to:

Task 5 – Verifying VAT Returns

  • verifying and reconciling VAT returns, but also ensure not to spend too long on this task at the expense of others

Task 7 – Principles of Payroll

  • payroll principles and operation, as students are not spending sufficient time on this task which suggests it is an area that requires more practice.

Q22 articles specifically about this unit:

Exports are zero-rated for VAT aren’t they?

This unit has been changed from the previous AQ16 one to better address the needs of employers.  It therefore includes payroll principles and puts emphasis on the administration, compliance, and verification of VAT processes rather than VAT calculations.  It has accompanying reference material that can be accessed during the assessment, with which I suggest you should be as familiar as possible so that you know what is in it, as well as maybe more importantly, what is not!

With that in mind, the following AQ16 articles are relevant as they should help you improve your underpinning knowledge:

Indirect Tax – focuses on accurate and timely submissions
Standard and cash accounting schemes
Annual accounting and flat rate schemes
Balancing a trial balance and correcting errors with journals – you need strong double entry bookkeeping skills, in relation to how VAT is accounted for, in order to be able to calculate changes and adjustments based on errors identified in previous VAT returns.

Whilst these will help improve your calculation and adjustment skills:

How to calculate VAT
Bad debt relief and fuel scale charges on a VAT return

The report also mentions that students need to be more familiar with the implications for non-compliance of VAT regulations, in particular the penalty regime, an area that is covered in Task 6. So, you should also be aware that the unit is based on a specific Finance Act which is changed annually but is usually a year behind the actual tax year. This means that some of the details you will be assessed on, such as thresholds or penalties, may be different to those that you apply at work. Therefore it’s vital you use the reference material, even if you regularly prepare VAT returns!


The purpose of this qualification is to ensure that you are well prepared to progress into a career in business, finance or professional accountancy, or into further education. Therefore it develops the skills needed for financial processes, including accounting principles and concepts, advanced bookkeeping and preparing financial statements. It also covers the business environment, technology used in finance and accounting, business issues regarding payroll and value added tax (VAT), issues in business, management accounting techniques, ethical principles and sustainability considerations for accountants.

In order to successfully pass this qualification, you will need to use a range of study techniques. The FAPS and Management Accounting Techniques (on which a report is yet to be published) units require you to learn theory and then apply it in practice, usually through calculations; skills traditionally within the comfort zone of accounting students. However, BUAW and a significant proportion of TPFB, requires you to understand topics, recall and apply facts, more than they need you to be able to do things, such as calculations. Therefore, you will need to adjust your learning techniques so that they are appropriate for each unit.

*Note that articles published before September 2022 will have been written in line with the AQ16 specification therefore, they could use different terminology, for example, sales ledger/control account as opposed to receivables ledger/control account, but the theory will still be valid.

Gill Myers is a self-employed accounts consultant. She has taught AAT qualifications since 2005 and written numerous articles and e-learning resources.

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