We’ve got the best tips in the whole of PQ land –sponsored by ReedAccountancy

LSBFF5• Throughput accounting/lifecycleaccounting.• Linear programming/decision treeanalysis.• Zero based budgets/flexiblebudgets.• Sales variances/mix and yieldvariances.• Performance evaluation inservices/non profit organisations.

F6• Income tax computation andpartnership.• Corporation tax with tradinglosses.• Capital gains tax with principalprivate residence relief.• Overseas corporation tax with theelection to exempt the profits of theoverseas branch from UKcorporation tax.• IHT on lifetime gifts into a trust.• VAT group registration andsurcharges.

F7• Consolidated financial statementsand/or consolidated incomestatement.• Published accounts preparationor re-drafting with 15 marks formixed standards adjustments.• Statement of cash flow with someinterpretation.• Depreciation and revaluation,EPS, substance, leasing.• Financial instruments, tax anddeferred tax, etc.

F8• Wide reading is recommended –know a little about a lot!• Audit of specific items especiallynon-current assets, receivables andpayables.• Internal controls – especiallycontrol environment.• Audit planning and risk

assessment especially audit riskissues.• Audit reports especially emphasisof matter, final review especiallyevaluation of misstatements and/orsubsequent events.• Others, assurance, ethics andinternal audit.

F9 • Investment appraisal includingtax and inflation possibly with leaseor buy decision.• WACC with some capital structuretheory.• Working capital maybe includingcash budgeting and cashmanagement.• Risk including FC and MMH.• Business finance with discussionof sources of finance.• EMH discussion.

P2 • Group income statement or cashflow statement.• Possibly two mix questions withthe usual suspects of goodwillprovisions financial instrumentsand sbp and the rest.• Current issues including leases

small and medium sizedenterprises and joint ventures.

P3 • Strategic analysis.• Evaluation of a strategic optionusing suitability, feasibility,acceptability.• Project management particularlythe initial stages.• Improvement of businessprocesses.• Strategic managementaccounting.

P4 • International investment appraisalwith adjusted present values or netpresent values.• Cost of capital using theprinciples of Modigliani and Millerprepositions or geared andungeared betas.• Mergers and acquisitions –valuation using free cash flows,defensive tactics and regulations oftakeovers.• Capital reconstruction schemes –designing a capital reconstructionscheme or assessing the success ofa given scheme.

• Option pricing theory. Realoptions, example, option toabandon, expand and delay.Valuation of company using theBlack-Schole option pricing modeland delta hedge.• Hedging exchange rate andinterest rate risk using futures,options and swaps.• Islamic finance.

P6• Incorporation of a businessincluding incorporation relief.• Corporation tax includingoverseas aspects and controlledforeign companies.• Partnership.• Rent a room relief.• Inheritance tax includingbusiness property relief.• Personal service companies orpurchase of own shares.• Investment in SEIS.• Remittance basis charge.

Kaplan FinancialF4• English legal system: courtstructure, court vs tribunal.• Contract law: exclusion clauses,intention to create legal relations.• Tort of negligence: duty of care,professional misstatement.• Employment law: common lawduties, redundancy.• Agency/partnership: how agencyrelationship arises, liability ofagents & partners.• Company law: separatepersonality/lifting the veil, articles ofassociation, treasury shares.• Fraudulent behaviour: moneylaundering, market abuse.

F5• Pricing equations & pricingstrategies.• Environmental managementaccounting.• Learning curves.• Variances: sales variances,market size and market share.• Decision trees.

F6• Income tax: Husband and wife,adjustment of profits, self

PQ Magazine June 2013 17

ACCA exam tips PQ

While you prepare for your exams.

Brought to you in association with Reed Accountancy

Continued on page 18

18 PQ Magazine June 2013

PQ ACCA exam tips

been a while since we’ve seen themore numerical aspectssurrounding cash management.• Valuations: cash flow basedvalues have yet to be examinedalthough the PE ratio and dividendvaluation methods have.• Business finance calculation andinterpret financial ratios. • Cost of capital: (WACC) andimpact of the cost of capital oninvestments. CAPM basedcalculations.

P1• Teleological and deontologicalapproaches to ethics.• Corporate code of ethics.• Insider trading.• Internal controls – systems.• Transparency in the context ofcorporate governance.• Directors’ remuneration.• Normative and instrumental viewof stakeholders.

P2• Groups and ethics – financialinstruments, joint arrangements,foreign currency.• Ethical issue – accountingtreatment in the group accountsquestion.• IAS 19 Employee benefits. • IFRS 2 Share-based payment. • Entity reconstructions includingaccounting issues. • IFRS 9 & IAS 39 Financialinstruments – including hedging.

P3 • Project management.• Benefits management.• Supply chain management.• Business process change.• Stakeholder analysis.• Decision making techniques.

P4 • Net present value – including

foreign currency cash flows.• Risk adjusted WACC.• Discussion of financing options.• Interest rate hedging – options,futures and FRAs.

P5• Divisional performance. • BCG matrix and link to CSFs,KPIs.• Public sector NFP – link betweenmission and CSFs, KPIs.• Evaluate PM system.• Evaluate format and content of aPM report.• Building block model.

P6• Corporation tax: capital gainsgroups, NGNL and rollover relief,group relief/consortium relief,overseas aspects: branch vssub/CFCs/transfer pricing.• Capital gains: reliefs: rollover,holdover, gift, PPR and letting,overseas aspects.• Inheritance tax: valuation ofshares, deed of variation, businessproperty relief.• Income tax: sole traders openingyear rules, trading losses, benefits:car, accommodation, shareincentive plans.• VAT: partial exemption, land andbuildings, group VAT registration.• Scenarios: lease versus buyassets: net cost, company purchaseof own shares, IHT versus CGT forgifts.

P7• Engagement planning and riskassessment. • Engagement procedures. • Ethics and professional issues.• Completion (matters toconsider/evidence on file) andengagement reporting.• Planning. • Subsequent events (ISA 560).• Due diligence.• Auditor’s responsibilities regardingfraud.• Limited liability.• Competition in the statutory auditmarket.• Improving the audit report.• UK variant is likely to include anaspect of insolvency.

First IntuitionF4• English legal system.• Consideration.• Remedies for breach.• Professional negligence.• Veil of incorporation.• Redundancy.• Directors duties.• Winding up.• Partnerships.• Fixed v floating charges.

F5• Throughput accounting.• Environmental accounting.• Limiting factors.• Decision trees.• Budgeting and learning curves.• Variances (including sales mixand quantity) and budget flexing.• Divisional performance andtransfer pricing.

F6• Employment/self-employment.• PAYE.• Opening years and change of year end for sole traders.• Capital allowances.• Corporation tax losses.• VAT default surcharge and VATinvoice content and annualaccounting.• CGT: principal private residenceand entrepreneur’s relief, chattels.• IHT lifetime and death transfers.

F7• Q1: consolidated SFP, withassociate, deferred consideration,pups and fair value adjustment.• Q2: single company accountsquestion, including taxation, lease,and intangible assets.• Q3: statement of cash flow andcomments thereon with no ratios.• Q4: the framework withcomputation for non-current asset. • Q5: provisions.

F8• Internal controls – deficienciesand recommendations.• Scenario based ethics orcorporate governance question.• Substantive testing and auditevidence.• Audit reports.

We’re working hard to

assist in your next step.

assessment.• Corporation tax: property income,chargeable gains to calculate, withrollover relief, quarterly instalmentpayments.• VAT: VAT return, including somediscounts and impaired debts relief,deregistration, payment dates.• Capital gains tax: wasting assetsor chattels, exempt assets, PPR, giftand entrepreneurs’ relief.

F7• Q1: consolidated statement offinancial position (with possiblestatement of profit or loss).Adjustments to include: PURP,share exchange, current accounts,impairment, revaluation, fair valueadjustment.• Q2: published accounts to includestatement of profit or loss,statement of financial position andstatement of changes in equity fromtrial balance. Possible adjustmentsto include: revenue recognition,depreciation, revaluation, tax anddeferred tax, convertible loan, shareissue.• Q3: statement of cash flows withinterpretation element.• Q4/Q5: qualitative characteristics,finance leases, intangible assets,events after the reporting date,earnings per share.

F8• Audit Framework: confidentiality/conflicts of interest/auditcommittees.• Internal audit: role and function.• Planning and risk: audit riskincluding analytical procedures. • Internal control: cash/purchasessystem (including tests of control).• Audit evidence: purchases/payables; bank and cash; reviewengagements.• Completion and reporting:subsequent events (ISA 560)auditor’s reports.

F9• Investment appraisal: the mostcommon technique assessed isNPV with inflation and taxation,although be prepared for a twist.• Working capital management: It’s

Continued from page 17

MORE TIPSTo see our comprehensive tips

for all the papers go towww.pqmagazine.co.uk and

click on ACCA study zone.BPP and Open Tuition have

provided us extensive tips forthese papers – get online now!

PQ Magazine June 2013

F9• Discussion of the economicenvironment and the impact oninterest and exchange rates.• Working capital management.• Investment appraisal and cost ofcapital.• Business Valuations.

P1• 50-mark question to include:TARA risk model, ethics, absolutistv relativism, chairman and CEOpowers, corporate socialresponsibility, ISO 14001.• Optional questions to include:importance of internal control,NEDs and remuneration committee,business risks, Gray Owens andAdams.• Bribery Act.

P2• Q1: group question on disposals,piecemeal acquisitions or cashflow.• Ethics.• Revenue recognition – currentissue.• Deferred tax.• Share based payments.

P3• Environmental Analysis – peoplewith financial analysis.• Project management.• Strategic action.• Information technology – pricingstrategy.

P4• International investment appraisaltechniques focusing on riskmanagement tools such as value atrisk.• Impact on WACC followinghedging of interest rate risk.• Company valuation basedscenario, possible MBO finance tostructure.• Adjusted present value with link toreal options and Black Scholesoption pricing model.

P5• Critique an existing performancemanagement system.• Transfer pricing.• ROI, RI and EVA.• Activity based principles.

• Corporate failure prediction.• Performance managementmodels.• Assess performance againstfinancial and non-financial(including environmental) targets.

P6• Business property relief.• Use of second spouse nil rateband.• Related property.• Groups of companies, trading andcapital losses.• Double tax relief for companies.• De-grouping charges.• Incorporation relief.• Furnished holiday lets.• VAT partial exemption.• Appeals and the four-tracktribunal system.• Benefits in kind or extra salary,income tax and NI implications.

P7• Audit risks in a scenario.

• Identifying ethical and otherprofessional issues in a scenario.• Audit reports.• Group audits.• Money laundering.

Becker Professional EducationF5• Section A – throughputaccounting and or environmentalmanagement accounting.• Section B – decision trees.• Section C – a calculationincluding activity based budgeting.• Section D – mix and yieldvariances, along with discussion.• Section E – performancemeasurement in non-profitorgansiations.

F6• Taxation of benefits.• Taxation of motor cars.• Employment income.• Different types of propertyincome, including furmished

holiday lettings, together with apersonal income tax computation.• Employment income, NICs.• Relief for a trading loss of self-employed persons.• A change of accounting date isdue for examination.• 12-month accounting periodstraddling 31 March, with a detailedadjustment of profit and detailedcapital allowances computation(motor cars – see above).• Capital gain with rollover relief.• Capital gains tax computation fora personal taxpayer. Possiblegain/loss caluculations.• VAT treatment of overseas trading.• Class 1 and Class 1A NIC, inconjunction with employmentincome, benefits and PAYE.• Tax appeals and penalties.• IHT – unused nil rate bands froma predecessor spouse, stage 2 & 3computations arising on death,applicable exemptions and due dateof payment.

F7• Leases.• Construction contracts.• Revenue recognition.• Substance vs form.• Convertible instruments (IAS 31/IFRS 9).• Accounting for taxation.• Accounting for asset, particularlyIAS 16.

F8• Ignore exam tips that are a list ofsomebody’s favorite topics.

F9• Rights issues.• IRR.• Dividend policy.• Lease vs buy decisions.• Efficient markets hypothesis.

P1• Corporate governance concepts,underlying fundamentals andarrangements.• CG in organisations such aspublic services and NGOs.• Types and forms of CG.• Agency theory.• Board structures.

19

ACCA exam tips PQ

We’ll be waiting on the other side.

LEGS 11Damian Pichard has asimple mission – toexplain how you canpass ACCA exams1) Be properly prepared – it’s alot easier than retaking.2) Don’t panic – it doesn’t helpand it wastes time.3) If you don’t know the answer toa question guess – make it up.You may pick up some marks.4) Always answerthe right numberof questions.5) Always answerevery part of everyquestion youattempt.6) Answer thequestion that hasbeen asked – not the one youwished had been asked.7) Practise rigorous timeallocation and management.8) Use bullet points wheneverappropriate to save time.9) Look at how many marks are

being given to judge how much towrite and how long to take.

10) Help the markerto give you marks: beconcise (there’s noextra marks forlength); keep it neat(there’s no marks ifthe examiner can’tread it); keep itrelevant (there’s no

marks if it isn’t about thequestion).11) Never leave the exam early –it’s your only chance to earnmarks.• Damian Pichard, University ofNorthampton

Continued on page 20

20 PQ Magazine June 2013

PQ ACCA exam tips

• Internal control and business risk,Turnbull.• Ethical theories and businesscodes – Koihlberg, Gray, Owen andAdams, Tucker, AAA.• Public interest.• Corporate social responsibility –corporate citizen, footprints.• Environmental/social auditing.

P2• Consolidation in Q1.• Disposals & complex groups.• Step acquisitions.• Cash flow.• Foreign sub.• Complex.• Financial instruments (IAS39/IFRS 9) including hedging.• Employee benefits (IAS 19),amended in 2011.• Leases (IAS 17).• Share-based payments (IFRS 2).• Impairment of assets (IAS 36).• Deferred tax (IAS 12).

P3• Project management.• Environmental analysis, usingPESTEL or Porter’s 5 forces and theimpact of change on allstakeholders.• Business process change orimprovements.

• Corporate level strategy perhapsinvolving Boston Consulting Groupmatrix.• The role of managementaccounting in helping to achievethe strategic objectives.• Strategy and people, perhapslooking at leadership qualities.

P4• Role and responsibility towardsstakeholders.• Domestic and internationalinvestment decisions.• Mergers and acquisitions.• Corporate re-organisationstrategies.• Advanced treasury and riskmanagement techniques.• Impact of macro economics andinternational financial institutions.• Emerging issues in finance andfinancial management.

P5• Environmental managementaccounting.• Activity based management.• Value chain analysis.• Balanced scorecard or Fitzgeraldand Moon building blocks model.

P7• New audits, tendering.• Planning, materiality, sampling,analytical review.• Audit, business or financialstatement risk.• Group audits, goodwill, jointaudit, joint ventures.• Assurance services, PFI, KPI, duediligence, forensic audit, reviews,insolvency.• Ethics, practice management andother professional issues.• Any audit matter covering IFRS.

• Close down procedures, openingbalances, comparatives.• Outsourcing, service providers,use of an expert.• CG, internal audit (ethics/outsourcing), audit committees.• Current issues.

LCAF7 • Q1: written element on eitherIFRS 10 or IFRS 13.• Q2: usual multi topic questionincluding finance at amortised costand leases.• Q3: prepare and analysis of acashflow statement• Q4/Q5: IAS 10 and non currentassets.

F9 • Investment appraisal: NPVincluding identification of relevantcash flows, tax saved on capitalallowances, inflation and nominalcost of capital.• Calculation of a project specificcost of capital and discussion.• Special investment decisions:lease or buy.• Working capital management:working capital characteristics ofdifferent businesses and theworking capital cycle. • Overcapitalisation versusovertrading.• All aspects of receivablesmanagement including creditcontrol, discounts andfactoring.• Sources of finance and costof capital.• Theories of capital structure(Modigliani and Miller).• Company valuation.• Dividend growth model vsmarket value discussion.

P2 • Q1: foreign subsidiaries orcashflow statement.• Q2/Q3: revenue recognition,hedge accounting, retirementbenefits, share based pay, deferredtax, leases.• Q4: management commentary,the framework. Possibly proposalsfor hedging, revenue, leases orinvestment entities.

Sunil BhandariF9• Q1: investment appraisal – NPVwith tax, inflation and workingcapital. Discussion on capitalrationing or objectives of a listedcompany• Q2: compute WACC of acompany; discussion on capitalstructure.• Q3: financial forecast – incomestatement and SOFP; investor andgearing ratios; Islamic finance –Sukuk Bonds.• Q4: working capital inventory;management – EOQ; cash budgetor payables management; FOREXhedging – forward contract andMMH for a FX payment.

P4• Q1: foreign investment appraisalor business valuation with FCF; riskadjusted WACC; BSOP real option;discussion on ethics – relevant tothe scenario.• Q2: interest rate riskmanagement – traditional debtfinance; Islamic Finance – mostlikely Sukuk Bonds.• Q3: adjusted present value;discussion of the weaknesses ofthis method.• Q4: corporate reconstruction ordividend policy. PQ

These tips should be used in conjunction with

proper study and revision. Theyare not a substitute for in-depthrevision. We cannot guaranteethat everything we mention will

be on the paper. These tips are arough guide only, no one knowswhat the examiner was thinking 18 months ago when the paper

was set!

HEALTHWARNING

Good Luck from us all!www.reedglobal.com/accountancyjobs

Continued from page 19

GIMME FIVEAbiodun Mamora recently wroteon LinkedIn: “I was 21 years oldwhen I completed all my ACCAexam. I want to help more youngpeople study and pass. If youhave opportunity overseas, I wantto lecture accounting students ina good institution.”

We asked for her top five tips topassing, and here they are:• Associate with people who havepassed some professional exams.• Leverage on past exam successto boost your confidence.• Forget social, focus on study.• Never be discouraged when youfail a paper. I failed a few papersand immediately re-enrolled.• Trust in God for grace to do allit takes to study, read and writeexams.