LSBF ACCA Exam Tips December 2014

LSBF ACCA Exam Tips December 2014
　　
　　Paper F5
　　
　　• Target costing with learning curve.
　　
　　• CVP analysis and decision tree.
　　
　　• Written budgeting.
　　
　　• Mix and yield, planning and operational variances.
　　
　　• Non financial performance or transfer pricing.
　　
　　Paper F6
　　
　　• Question 1:
　　
　　– Employment income including the evaluation of benefits.
　　
　　– Savings income and dividend income.
　　
　　– Introducing a partner into the partnership with opening year rules.
　　
　　– Computing the income tax payable.
　　
　　– computing national insurance.
　　
　　• Q2: corporation tax computation – adjustment of a trading loss including capital allowances for plant and machinery and relief for the trading loss. VAT or maybe a separate question.
　　
　　• Q3: capital gains for companies or individuals a mixed bag.
　　
　　• Q4: property business income and trading losses for a sole trader. • Q5: The residency position of a number of individuals and the IHT implications of a making gifts into a trust.
　　
　　Paper F7
　　
　　• The 40 marks of MCQs will be mainly on the standards/published accounts, and some on interpretation/cash flows. Watch out also for brief consolidation calculations or principles.
　　
　　• The 30 marker will probably be a consolidation or published accounts exercise.
　　
　　• One of the 15 markers will be the topic not examined as the 30 marker.
　　
　　• The second 15-marker will be a statement of cash flow/with some interpretation, or on standards.
　　
　　• The well-prepared student has nothing to fear with MCQs, but the student who has not covered the breadth of the syllabus will find it difficult to pass.
　　
　　Paper F8
　　
　　• MCQ – likely to be a mix of knowledge and practical, so knowledge of ISAs, corporate governance etc will be important.
　　
　　• Substantive testing: tangible non- current assets, trade payables,
　　
　　provisions, bank and cash.
　　
　　• Controls: reporting to management and tests of controls on purchases (including asset purchases), bank and cash.
　　
　　• Planning: audit risk and response, with ratios.
　　
　　• Ethics: threats to objectivity, confidentiality.
　　
　　• Finalisation/reports: subsequent events, other Information.
　　
　　• Internal audit: reliance by external auditors (ISA 610).
　　
　　• Other: roles of audit committees, CAATS, levels of assurance, ISA 240, 250, 260, 402.
　　
　　Paper F9
　　
　　• Investment appraisals: calculation of NPV. Discussion question on risk and uncertainty (example: sensitivity analysis and probability distribution).
　　
　　• Working capital management: quantity discount (EOQ) or factoring calculations. Discussion of working capital financing and/or investment policies.
　　
　　• Cost of capital: WACC – calculating cost of equity using CAPM or dividend valuation model, cost of redeemable debt and bank loan/preference shares. Discussion of circumstances under which WACC can be used.
　　
　　• Business valuation: valuation of equity using; DVM, P/E ratio and asset basis. Explanation of weak/semi-strong and strong form of efficient market.
　　
　　• Sources of finance: the effect of different financing options on key ratios like EPS, debt/equity ratio and interest cover, including calculation of TERP. Discussion of factors to consider in raising short/long-term capital or equity/debt capital.
　　
　　• Risk management: hedging currency risk using forward contract and money market hedge. Using purchasing power parity and interest rate parity theories to estimate future spot rate and forward rate respectively.
　　
　　• Dividend policy: factors to consider in formulating dividend policy or the effect of a change in dividend policy on share price.
　　
　　Paper P1
　　
　　• Governance:
　　
　　– Role of Board.
　　
　　– Unitary/two tier.
　　
　　– Chair role/CEO chair split.
　　
　　– Induction/performance appraisal. – Reward systems.
　　
　　– Family based structure.
　　
　　– Global standards in governance.
　　
　　– Stakeholder classifications.
　　
　　• Control:
　　
　　– Objectives of a sound system.
　　
　　– COSO failures.
　　
　　– Reasons for internal audit.
　　
　　– Internal control disclosure.
　　
　　• Risk management:
　　
　　– Risk committee or risk manager. – Strategic/op/static and dynamic risk.
　　
　　– Risk diversification.
　　
　　– ALARP.
　　
　　• Ethics:
　　
　　– Absolute/relative, consequential. – Grey, Owen and Adams.
　　
　　– Professionalism.
　　
　　– AAA model or Tucker.
　　
　　Paper P2
　　
　　• Q1: consolidated position statement with adjustments.
　　
　　• Q2 and Q3: two mix questions with a host of issues including maybe revenue, pensions and financial instruments.
　　
　　• Q4: current issues of integrated reporting or transparency or equity accounting or maybe SMEs.
　　
　　Paper P3
　　
　　• External analysis.
　　
　　• Strategic choice.
　　
　　• Corporate social responsibility/ integrated reporting.
　　
　　• Marginal costing for decision- making.
　　
　　• Improving business processes.
　　
　　• Project teams.
　　
　　• POPIT approach to change management.
　　
　　Paper P4
　　
　　• Hedging exchange rate and interest rate risk using futures, options and swaps.
　　
　　• Option pricing theory. Real options, example, option to abandon, expand and delay. Valuation of company using the Black-Schole option pricing model. • Investment appraisal using adjusted present values/net present values or modified internal rate of return.
　　
　　• Cost of capital using the principles of Modigliani and Miller prepositions or geared and ungeared bias.
　　
　　• Mergers and acquisitions – valuation using free cash flows, defensive tactics/regulations of takeovers and cash offer or share exchange.
　　
　　• Capital reconstruction schemes – designing a capital reconstruction scheme or assessing the success of a given scheme.
　　
　　Paper  P5
　　
　　• Corporate failure.
　　
　　• Environmental management accounting.
　　
　　• Human resources management, including reward systems.
　　
　　• Quality:
　　
　　– TQM, Kaizen, JIT and target costing.
　　
　　– Quality related costs.
　　
　　– Six Sigma.
　　
　　• Transfer pricing.
　　
　　• Performance Measurement
　　
　　Systems:
　　
　　– The balanced scorecard.
　　
　　– The building blocks model.
　　
　　– The performance prism.
　　
　　– The BCG matrix.
　　
　　• Benchmarking.
　　
　　Paper P6
　　
　　• IHT with the death estate.
　　
　　• Changing the will after a person is dead, using a deed of variation to apply the reduced rate of IHT when a charitable legacy is made.
　　
　　• Company selling shares and the substantial share exemption or a company selling its trade and assets.
　　
　　• Research and development expenditure for large companies.
　　
　　• Controlled foreign companies.
　　
　　• Badges of trade, partnership with a partner joining/leaving with opening year rules, choice of accounting date, conditions to change the accounting date.
　　
　　• Trading losses at the beginning or middle of the trading cycle maybe in a partnership.
　　
　　• Personal pension schemes.
　　
　　• Capital gains tax including entrepreneurs’ relief, shares matching rules.
　　
　　• Opting to tax a building, electronic filing of the VAT return.
　　
　　• The capital goods scheme.
　　
　　Paper P7
　　
　　• Business risk and risk of material misstatement.
　　
　　• KPIs and evidence to audit/review them for social/environmental and public sector operational.
　　
　　• Forensic audit.
　　
　　• Matters and evidence – IAS 10, 11, 12, 23, 36, 37, 38, IFRS 2, 5. • Ethics and professional issues – threats to objectivity.
　　
　　• Practice management – advertising, tendering.
　　
　　• Finalisation and report – subsequent events, other information.
　　
　　• Current issues – ISA 610, new format audit report/extending the auditor’s role.
　　
　　Source: LSBF / PQ Magazine