ACCA EXAM TIPS DEC 09!

F4
Court structures
Offer and acceptance
Contract breach
Employees v independent contractors
Agency relationships
Directors dutiesInsolvency

F5
Performance Management (possibly with transfer pricing)
Budgeting including objectives and behavioural aspects
ABC
Pricing
Variances including planning & operating variances

F6
Income tax involving sole trader encompassing profit adjustment and capital allowances and employed earner. Payment of tax details also required.
Corporation tax involving capital allowance calculation for plant and machinery and industrial building allowance. Double tax relief also tested.
VAT default surcharge liability.
Capital gains tax from individual perspective testing gift relief, entrepreneurs’ relief, part disposal, destroyed or damaged asset, exempt assets.
Calculation of CGT liability involving capital losses.
Property income
Corporation tax losses

F7
Q1 (25 marks): Consolidated statement of comprehensive income (P&L) and/or statement of financial position (balance sheet) with one subsidiary plus associate (including adjustments for fair values, unrealised profit, intragroup trading, goods/cash in transit, other syllabus area). Discursive part (b) on reasons for adjusting for unrealised profit or other group topic.
Q2 (25 marks): Accounts restatement/preparation with adjustments e.g. depreciation, current/deferred tax, inventory (stock) valuation, leases, substance over form issues, financial instruments (FV change or amortised cost), revaluations, share issues or government grants. May include EPS calculation or movement in share capital and reserves.
Q3 (25 marks): Interpretation and/or statement of cash flows, perhaps with written part on not-for-profit entities. Interpretation may focus on limited ratios and their interpretation (e.g. ROCE and its components). Sections of a statement of cash flows (rather than whole statement) may be tested
Q4 & Q5 (15 & 10 marks): One question in context of conceptual framework; other containing one or two discrete topics. Possibilities: regulatory framework, inflation, earnings per share, government grants, impairment, substance over form issues, leases or intangible assets

F8
Not for profit organisations
CAATCorporate Governance
Test of Controls
Substantive
TestingAudit Reports

F9
Working capital: this has always been a favourite theme; questions on inventory management and receivables management are likely here. Make sure that you are comfortable with calculating the operating cycle and explaining the concept of over-trading.Investment decisions: this exam normally contains a question involving net present value (NPV), often with tax and inflation; discounted cash flow techniques can also be applied to asset replacement, capital rationing and leasing as well and one of these areas could well be tested this time. Remember that you may need to calculate a weighted average cost of capital before you calculate an NPV.
Sources of finance: this is a topical area, we would expect a part question on financing problems covering gearing issues and problems for small-medium sized companies. Ratio analysis is likely to feature here.
Business Valuations: this area is commonly tested and is a core syllabus area. You should note that in recent sittings the examiner has looked to combine different syllabus areas within the same exam question – for example asking you to calculate a cost of equity and then use it to value a company.Make sure that you are also able to value debt. Finally, you need to be able to explain the efficient markets hypothesis – recent stock market volatility casts doubt on the ability of stock markets to price securities in a rational way.
Financial environment & Risk management: recent exchange rate and interest rate volatility could impact on a company’s financial management plans – a part question on this area could be set, with further discussion and calculations on hedging techniques.

P1
Sarbanes Oxley - why a rules based system is suitable for corporate governance and comparing it to the UK combined code
CSR - benefits to organisations of engaging with stakeholders
Auditing processes - benefits of internal auditing, focussing on environmental auditing
Disclosure requirements under Turnbull report
Discussing an ethical issue using the American Accounting Association model
Explanation of some of the 9 principles of good governance
Features of an effective control system
Roles of different committees at board level
2 Tier v unitary board structure

P2
Section A
Compulsory case study including preparation of a group statement of comprehensive income (profit and loss account) (top tip) and/or statement of financial position (balance sheet) including complex group structures, continuing and discontinued activities or group disposals. This will include other accounting complications such as financial instruments, pensions, share-based payment and impairments.
There will also be discursive requirements on a linked accounting adjustment and social/ethical aspects of corporate reporting and the link between morality and ethics.

Section B
Industry question (often Q3), testing range of standards (NB: no specific knowledge of the particular industry is required)Discussion question (Q4) looking at current developments in corporate reporting such as proposals relating to fair values, success/issues on implementation of IFRSs, treatment of gains and losses on pension schemes, small and medium-sized entities, management commentary, comprehensive income/presentation of financial statements, improvements in performance measurement. May also include a related computational part based on figures from a case study'Multi-part' testing a range of standards separately, such as related parties, pensions, changes in accounting policies, recognition and/or impairment of tangible and intangible assets, foreign currency transactions, leases, revenue recognition, consistency of standards with the conceptual framework, changes in accounting policies, the effect of accounting treatments on earnings per share or ratios and deferred tax implications

P3
Organisational goals and culture
Environmental analysis
Business processes
Quality initiatives
Methods of organisational expansion
Strategies for competitive advantage
Portfolio analysis

P4
Role and responsibility towards stakeholders: ethical issues continue to appear regularly as an optional discussion question. This is an important area to develop as a strength, since the discussion question is normally one of the easier optional questions.
Advanced investment appraisal: real options and adjusted present value are popular themes and were not tested in the last two sittings. Cost of capital calculations are regularly tested, make sure that you are comfortable adjusting betas for differences in gearing.
Acquisitions and mergers: this exam normally contains a question involving valuations which the examiner sees as a crucial part of the syllabus, and this area was not examined in June. To give this a topical twist you might be valuing a company that is splitting itself up or selling off a division.
Corporate reconstruction: this is a topical area; a question could also ask you to evaluate a capital reconstruction e.g. a business that is considering offering its creditors shares in order to enable it to survive.
Advanced risk management: foreign currency derivatives are due to be tested numerically.Emerging issues: the January 2009 article by the examiner on ‘toxic assets’ indicates that this area may well be examined as a part of a question.

P5
Scope of strategic performance measures in the private sector: you may be asked to draw up an income statement or budget or to compare actual performance against a benchmark. This could include the use of activity-based approaches, learning curves or optimal pricing. Once the financial data has been collated and compared, questions usually include the need to comment on these and may require discussion of non-financial indicators, additional information to improve assessment or strategies to improve performance.
Divisional performance and transfer pricing issues: this chapter has been a key issue in P5 exams so far, often appearing as a compulsory question. ROI, RI, EVA or even ABC could feature here. Transfer pricing has not yet been tested in a full question but has appeared both as part of optional questions, numerically, and part of the smaller compulsory question, discursively.
Current developments / trends in management accounting: modern management and management accounting techniques have been examined here with both JIT and TQM common topics in the previous syllabus. Knowledge of these was used to discuss the impact they would have on information systems / performance measures.
Alternative approaches to budgeting for control: budgeting has been a favourite essay question with your examiner, but missed out in 2008.
Management accounting and information systems: a question on sources of information, relevance of operational management accounting information in today’s business environment or types of management information system is possible at this sitting as it has not yet been tested in depth at P5.
Alternative views of performance measurement: the examiner often includes a question to evaluate an organisation against an established theoretical model. The balanced scorecard, performance pyramid and building blocks have all appeared in previous exams.Performance hierarchy: linking strategic decisions to mission statements or suggesting strategic options using models such as Ansoff’s matrix or the BCG matrix lend themselves to questions containing a mixture of financial and discursive elements

P6
Section A
Q1 Case study scenario involving personal tax issues.
Covering overseas aspects of income tax, calculation of DTR, choice of remuneration package involving share schemes, property income, capital gains.
Q2 Case study scenario involving group of companies; group relief, capital gains groups implications including consequences of selling a subsidiary, VAT issues of a groupSection B
Q3 IHT and CGT consequences of gifting wealth in lifetime or on deathQ4 Purchase of own shares, close companies, liquidation
Q5 Unincorporated business versus company, involving loss relief

P7
A risk-based and/or planning scenario in the compulsory section
Questions based on articles published in Student Accountant in the past six months - such as recent articles on the Clarity Project and Computer Assisted Audit Techniques (CAATs)
A number of requirements asking for audit procedures and required evidence in respect of specific financial reporting issues (CAATs could also feature here)
A practice-based scenario looking at professional, ethical and quality control issues
A reporting scenario of some sort
Legal and regulatory issues affecting assurance providers, especially in the context of firms’ professional liability, money laundering and the UK Companies Act 2006 (even the IAASB Clarity Project)
The requirements of other forms of assurance engagement, such as Prospective Financial Information (PFI), Value for Money (VfM) studies or agreed upon procedures
The correct treatment of more complex accounting issues (such as employee benefits or first time adoption of IFRS) than has been seen before
As in June 2009 with ISA 315, specific ISAs may be examined in sufficient detail to warrant learning the key elements for regurgitation in the exam
Discrete topics that we have not yet seen such as subsequent events as part of evaluation and review, questions using the context of internal audit or advertising for certain engagements
The need to understand current issues such as globalisation, the impact of the recession on auditors, corporate governance, risk management and auditor liability.enjoyKingnasha

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