ACCA Dec 2009 exam tips

From PQ Magazine

Paper F5
Interpreting financial and non-financial performance measures.
Throughput accounting techniques.
Short-term decision-making techniques.
Divisional performance measures .
Standard costing – variance analysis and operating statements.
Comparing the merits of different budgetary control systems.
ABC.
Forecasting - linear regression, or time series.
Transfer pricing.
Backflush costing discussion.
Limiting factors.


Paper F7
Consolidated
Statement of Comprehensive Income – possible transactions to include
depreciation, revaluation, investment property, IFRS 5.
Consolidated I/S and SFP for either 2/3 company groups..
Published accounts.
Cashflow question with report on company performance.
Financial statement interpretation.
Intangible non-current assets including research and development.
Liabilities including deferred tax.
Leasing – both numbers and written aspects.
IASB framework – elements or qualitative characteristics.


Paper F8

Payables – validation of period end balances and cut-off.

Acceptance of appointment – ethical and practical issues.

System evaluation and management letter extracts.

Audit of estimates including provisions and contingencies.

Understanding unmodified audit reports and modified opinions.

Closing review, subsequent events and threats to going concern status.

Payroll audit procedures.

Not for profit organisations.

Internal control weakness.

IAS 570 going concern.

Analytical review as a planning tool.

Threats to an auditors independence.

Inventories or non-current assets.



Paper F9

Economic environment and the impact on interest and exchange rates.

Working capital management – EOQ with discounts and lead time buffer stock.

Management of trade receivables, including settlement discounts and factoring.

Asset replacement cycles and capital rationing.

Risk management of foreign currency using internal and external hedging techniques.

Weighted average and marginal costs of capital and the CAPM.

Business valuations using geared betas and earnings based valuations.

Inventory management.

Complex NPV or IRR with tax.



Paper P1

Corporate Governance – risk management, director’s remuneration and non-executive director’s responsibilities.

Internal controls.

TARA risk model, ethics absolutist v relativism, separation of CEO and chairman powers (think M&S), ISO 14001.

Ethical dilemma – American Accounting Association decision model.

Stakeholder management Mendelow’s Matrix.

Risk audit - in house versus external provision. The need for internal audit.

The contents and process of a social/environment audit; the environmental footprint.

Enterprise risk management models



Paper P2

Complex group statement of comprehensive income incorporating a part disposal or stepped acquisition.

IFRS 3 revised aspects.

Principles and accounting treatment multi-scenario incorporating intangible non-current assets and impairment.

Deferred tax.

Management responsibilities for ensuring transparency of financial statements.

Impact of accounting policies on a financial covenant.

Accounting for environmental issues including provisioning.

Convergence of IFRS and US GAAP.

Discount activities.

Group topics – disposal of subsidiary and complex group. Other topics provisions, impairments, deferred tax.



Paper P3

The balance between controlling and encouraging emergent strategy.

E-business and supply chain management.

Scanning the macro-environment and competitive environment.

Project management and the capability maturity model.

Marketing techniques and customer relationship management.

Stakeholder analysis and corporate social responsibility.

Business analysis in not-for-profit organisation.



Paper P4

Corporate failure.

WACC/financing.

Business Valuation.

Black Scholes.



Paper P5

Impact of world, national and market trends on performance.

Current issues and trends in performance management.

The performance hierarchy, pyramid.

Behavioural aspects of performance management, forecasting.

Strategic management accounting and limitations of traditional management accounting techniques.

Learning curves.


From Opentuition...

Tips for ACCA Paper F5 "Performance Management"
Question 1
>Activity Based Costing / target costing
>Question 2
>Linear programming
>Question 3
>Variance analysis - planning and operational
>Question 4
>Budget preparation including regression and time series and/or
>> learning curves.
>Question 5
>Performance measurement - divisionalised + transfer pricing

Tips for ACCA F7 Financial Reporting (INT)
Question 1
Consolidated Statements of Financial Position and Statement of Comprehensive Income with a subsidiary and an associate

Question 2
Preparation of Statement of Income and Statement of Financial Position
from a draft set of financial statements of draft trial balance

Question 3
Statement of Cash Flows - maybe with an interpretation element

Question 4
Earnings per share calculation

Question 5
Chat about the Framework

Tips for ACCA Paper F8 Audit and Assurance (INT)
30 Mark question:
Analytical review

10 Mark question:
Computer assisted auditing techniques

20 Mark questions:
Audit of non-current assets
Not for profit organizations
Engagement and audit planning

Tips for ACCA Paper F9 Financial Management
Question 1
Weighted average cost of capital with CAPM / calculating an asset beta from an equity beta


Question 2
Forecasting
future exchange rate (purchasing power parity) / management of exchange
rate risk (forward contracts and money markets) / written on managing
interest rate risk

Question 3
NPV question - probably Capital Rationing / written on limitations


Question 4
Management of receivables / calculation and comment on some ratios

Tips for ACCA P1 Professional Accountant

Question 1
Identify and explain how a company can better comply with the Combined
Code on Corporate Governance, the role of a corporate and social
responsibility sub-committee, and something about the environment

Question 2
Importance and role of an Internal Audit department / function in the management of risk

Question 3
David Campbell's article in Student Accountant August 2009 about Internal and External Actors in a company

Question 4
A scenario question on ethics - different attitudes and appr

Tips for ACCA P2 Corporate Reporting (INT)
Question 1
Consolidated Statement of Income with
two subsidiaries - one part disposed but still a subsidiary, the other
part disposed becoming an associate - both with goodwill involved. Q
Base, Black and Zero but needs amendment to include the goodwill angle.
!5 more marks for chat about environment and or corporate governance
Question 2
A "Various IFRS" question - Lots of examples in section B of the BPP revision kit

Question 3
Write a report to directors about the acceptability of some dubious proposed accounting treatments

Question 4
An
essay question about the problems facing the IASB in their efforts to
reach acceptable standards which can be applied World-wide

Tips for ACCA Paper P3 Business Analysis
Part A - 50 mark case study
SWOT/PESTEL/Porter's 5 forces analysis
Foreign expansion/merger
Generic strategies
Parenting styles/Ashridge portfolio display


* Part B – 2 from 3 25 mark questions

* E-business and marketing
* Project management
* Business process change management/outsourcing/commoditisation of outsourcing services
From BPP.....

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
CAAT
Corporate Governance
Test of Controls
Substantive Testing
Audit 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