ACCA Exam Tips for F5 to P7 December 2017
Information Source is PQMagzine ACCA Exam Tips for F5 to P7 December 2017.
- The exam will be approximately 40% calculation and 60% discussion, meaning that it is not sufficient just to be able to perform all of the calculations to pass.
- For section A & B it’s the whole syllabus you need to know!
- For section C expected areas include budgetary systems, planning and operational variances, mix & yield variances and evaluation of the company performance (either as a whole or on a divisional basis).
- There is no longer any formal time, however, you are strongly advised to plan your answers to section C before you start to write.
- You must ensure you make reference to the scenario in your answer.
- Due dates for payment of income tax (including payments on account).
- Due dates for payment of corporation tax (including installments for page companies).
- Filing dates for the income tax & corporate tax returns.
- Penalties & interest for late payments and returns.
- VAT rules on registration, impairment loss (bad debt) relief, and the SME schemes relating to cash accounting, annual accounting, and flat-rate schemes.
- Inheritance tax due on lifetime transfers both in the donor’s life and on death.
- Statutory residence tests for individuals.
- Identification of groups of companies for corporate tax loss reliefs and gains.
- Trading loss reliefs for both companies and sole traders.
- See section A subjects, but with longer scenarios!
- You should spend at least 50% of your revision time answering section C questions.
- Learn your income tax & corporation tax proformas.
- Employment benefits.
- Property income.
- Relief for pension contributions.
- Adjustments to profit to arrive at trading income for both companies & sole traders – in past sitting, we have seen a number of questions where you have to correct errors in computations in the scenario.
- Capital allowance computations.
- 10-marker on VAT, inheritance tax or capital gains tax.
- Several questions on consolidation & interpretation of financial statements.
- Expect questions on inflation and specialized entities, the non-core areas.
- Two 20-markers – one covering interpretations and the other preparation of financial statements.
- One question in the context of a single company and one in the context of a group.
- Accounts preparation, with extracts or stand-alone calculations or full statement of P&L and other comprehensive income and/or statement of financial position.
- Accounting for items.
- Statement of changes in equity, statement of cash flows extract, earnings per share calculation or linked written topic.
- Consolidated question including one subsidiary and often an associate, with adjustments, eg fair values, deferred/contingent consideration, PUP on inventories/PPE, intragroup trading and balances, goods/cash in transit.
- Single entity with preparation from a trial balance or restatement of given financial statements with the usual adjustments for depreciation, revaluation and current/deferred tax (revaluations), plus a mixture of adjustments on other syllabus areas, eg leases, substance over form issues, financial instruments (change in fair value or amortised costs), share issues, government grants, inventory valuation, revenue recognition or construction contracts.
Q16 to 18
- Audit planning.
- Audit risk (identification and explanation of audit risks from a scenario and explanation of the auditor’s response to each risk).
- Internal Audit.
- Internal controls (identification and explanation of deficiencies in internal control and the recommendation of suitable internal controls or descriptions of tests of controls).
- Audit procedures (both substantive procedures and tests of control).
- Pay attention to the verbs – ‘explain’ requires a sentence and will score one mark if properly explained, whereas ‘list’ simply requires you to list out information and will score 0.5 marks per point.
- Try to use a tabular format in your solutions where relevant as the examining team have stated that candidates who do this score better.
- Ratio analysis.
- The concept of shareholder wealth.
- Financial intermediation.
- Fiscal & monetary policies.
- The efficient market hypothesis.
- Working capital management – operating cycle, the impact of a change in credit period or accepting a factor’s offer).
- Business or security valuations (methods of valuation).
- Financial risk management (mainly in the form of currency risk, but maybe an aspect of interest rate risk).
- Working capital management.
- Investment appraisal (likely to feature NPV with inflation and tax).
- Business finance – either an evaluation of financing options (interest coverage and gearing ratios) or a cost of capital calculation.
- Whichever of these 3 topics that do not feature in the section is likely to appear in section B of the exam.
- The idea of section A’s one 50-marker is to test all three main syllabus areas.
- This question is typically broken down into four written requirements.
- There are 4 professional marks available here too.
- You are advised to still use the notional 15 minutes to plan the big 50-marker question above all others!
- Read the examiner’s articles. Recent exams have tested his features on corporate social responsibility (CSR) strategy and strategic CSR.
- Expect to see the use of stakeholder, ethical and other CSR theories applied to scenarios, as well as the use of risk, control & governance syllabus content, especially relating to board directors, remuneration, and reporting.
- Bribery and corruption, environmental risk or poor ethical stance could feature here too.
- Preparation statement of financial position.
- A group statement of profit loss and other comprehensive income, which may include a foreign subsidiary, discounted activities, disposals and/or acquisitions.
- Expect some accounting complications, such as financial instruments, pensions, share-based payment & impairments.
- There will be discursive requirements on a linked accounting adjustment and social/ethical/moral aspects of corporate reporting.
- A multi-part question covering a range of topics or a theme such as fair value measurement, deferred tax, foreign currency transactions, financial instruments, pensions, share-based payments, non-current assets, borrowing costs, the effect of accounting treatments on earnings per share or ratios.
- Industry-based question testing a range of standards, such as accounting policies and the framework, leases, grants, IFRS for SMEs, reorganizations, provisions, events after the reporting period and related parties.
- A discussion question looking at current issues in corporate reporting and problems with existing standards. Look at capital reporting, revision of the conceptual framework, classification in P&L vs OCI, improvements to disclosure, regulatory issues over adoption and consistent application of IFRSs, implementation issues, application of the definition of control and significant influence, improvements in performance measurement, integrated reporting, revenue recognition and leasing (phew that’s a lot).
- Expect elements of group accounting, especially if Q1 is a statement of cash flow question.
- Project appraisal (domestic & overseas).
- Business Valuations.
- Both of these areas are likely to include the cost of capital calculations.
- Risk management – as an aspect here, eg value at risk, real options, hedging and risk mapping.
- Risk management (currency or interest rate).
- Business re-organization.
- Real options.
- Ethical & general financing issues (dividend policy).
- Data analysis using KPIs and EVA.
- You need to have mastered transfer pricing ratios, analysis of quality-related costs and ABC.
- Performance management frameworks (building block, performance pyramid or balanced scorecard).
- Quality management
- Information reporting (eg CE+SFs and KPIs).
- Application of strategic models (PEST, Porter’s 5 forced, the value chain).
- HR frameworks ( reward & appraisal systems).
- Risk management and environmental management accounting.
- Groups of companies involving overseas aspects and losses.
- Unincorporated business particularly loss relief or involving a partnership, basis period rules should also be expected.
- Capital gains tax versus inheritance tax, including the availability of reliefs.
- Overseas aspects of income tax, CGT, IHT or corporation tax.
- Personal service company.
- Share schemes.
- Company purchase of own shares.
- Enterprise investment schemes/seed EIS/venture trusts.
- VAT-partial exemption or land & buildings or transfer of a going concern or overseas transactions.
- Transfer of trade versus the sale of a subsidiary.
- Disincorporation relief.
- Pension contributions.
- Patent box, research, and development expenditure.
- Planning, risk assessment, evidence gathering & practice management issues using a scenario where audit client details are presented.
- A non-audit engagement such as prospective financial information or due diligence, or an audit completion or consolidated groups.
- Audit evidence and financial reporting issues.
- Practice management, ethics and quality control and reporting, including completion and communication.
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