AAT Level 4 Professional Diploma in Accounting

The AAT Professional Diploma in Accounting covers higher level skills, including drafting financial statements, managing budgets and evaluating financial performance. On completion, students will be able to specialise in areas such as tax, auditing and credit control.

The Level 4 Professional Diploma in Accounting is structured differently to the other levels. There are four mandatory units then a choice of two units from five. To gain the full qualification, six units will be completed and six exams.

The mandatory units and exam methods are listed below:

  • Financial Statements of Limited Companies/Unit assessment and synoptic assessment
  • Management Accounting Budgeting/Unit assessment and synoptic assessment
  • Management Accounting Decision and Control/Unit assessment and synoptic assessment
  • Accounting Systems and Control/Synoptic assessment only

The optional units and exam methods are listed below:

  • Business Tax/Unit assessment only
  • Personal Tax/Unit assessment only
  • External Auditing/Unit assessment only
  • Cash and Treasury Management/Unit assessment only
  • Credit Management/Unit assessment only

The synoptic assessment includes questions that cover the whole syllabus. For Level 4, only the mandatory units are included in the synoptic assessment. Accounting systems and control is only examined in the synoptic assessment.

What will I learn in each AAT Level 4 unit?

Financial Statements of Limited Companies

  1. Demonstrate an understanding of the reporting frameworks and ethical principles that underpin financial reporting
  2. Demonstrate an understanding of the key features of a published set of financial statements
  3. Draft statutory financial statements for a limited company
  4. Draft consolidated financial statements
  5. Interpret financial statements using ratio analysis

Management Accounting Budgeting

  1. Prepare forecasts of income and expenditure

  2. Prepare budgets
  3. Demonstrate how budgeting can improve organisational performance
  4. Report budgetary information to management in a clear and appropriate format

Management Accounting Decision and Control

  1. Analyse a range of costing techniques to support the management accounting function of an organisation
  2. Calculate and use standard costing to improve performance
  3. Demonstrate a range of statistical techniques to analyse business information
  4. Use appropriate financial and non-financial performance techniques to aid decision-making
  5. Evaluate a range of cost management techniques to enhance value and aid decision-making

Accounting Systems and Control

  1. Demonstrate an understanding of the role and responsibilities of the accounting function within an organisation
  2. Evaluate internal control systems
  3. Evaluate an organisation’s accounting system and underpinning procedures
  4. Analyse recommendations made to improve an organisation’s accounting system

Business Tax

  1. Complete tax returns for sole traders and partnerships and prepare supporting tax computations
  2. Complete tax returns for limited companies and prepare supporting tax computations
  3. Provide advice on the UK’s tax regime and its impact on sole traders, partnerships and limited companies
  4. Advise business clients on tax reliefs and their responsibilities as well as their agent’s responsibilities in reporting taxation to HMRC
  5. Prepare tax computations for the sale of capital assets

Personal Tax

  1. Analyse the theories, principles and rules that underpin taxation systems
  2. Calculate a UK taxpayer’s total income
  3. Calculate income tax and National Insurance (NI) contributions payable by a UK taxpayer
  4. Account for capital gains tax
  5. Discuss the basics of inheritance tax

External Auditing

  1. Demonstrate an understanding of the principles of auditing
  2. Demonstrate the importance of professional ethics
  3. Evaluate the audited entity's system of internal control
  4. Evaluate audit procedures for obtaining audit evidence
  5. Evaluate the planning process
  6. Evaluate audit procedures

Cash and Treasury Management

  1. Use statistical techniques and financial information to prepare forecasts of cash receipts and payments
  2. Prepare cash budgets and monitor cash flows within the organisation
  3. Evaluate the principles of cash management within the context of regulation and government monetary policies
  4. Evaluate ways of raising finance in accordance with organisational requirements
  5. Evaluate ways of investing surplus funds within organisational policies

Credit Management

  1. Analyse relevant legislation and contract law that has an impact on the credit control environment
  2. Critically analyse information from a variety of sources to assess credit risk and grant credit in compliance with organisational policies and procedures
  3. Evaluate a range of techniques to collect debts
  4. Critically evaluate credit control in line with organisational policies and procedures
  5. Present advice and recommendations to management on the credit control system
Read more about Level 2 and 4 in our AAT Syllabus page.

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