by FTC KAPLAN

ACCA Exam Tips

NOTE: These exam tips should only be used in conjunction with proper studying. We cannot guarantee that these tips will appear in the actual exam as we have not seen the exam papers. Examiners are not predictable so it is vital that all core syllabus areas are revised fully. The tips are based on Kaplan’s experience and understanding of the ACCA exams and will help focus your last minute revision.
Please also read all the Examiners Articles – available on the ACCA website or in the Student Accountant magazine.

F4 – Corporate & Business Law (English variant)

English legal system
• Delegated legislation/interpretation of statutes

Obligations
• Formation and terms of a contract. Duty of care in tort or professional negligence

Employment
• Dismissal

Company law
• Incorporation procedure or articles
• Maintenance of capital
• Termination of directors office and directors powers
• Types of meetings and resolutions
• Fraudulent behaviour - Money Laundering

F5 – Performance Management

• Budgeting

• Learning curves

• Variances, possibly including mix and yield

• Performance measurement including financial and non financial performance indicators

• Transfer pricing or ROCE/ RI

• Throughput accounting

F6 – Taxation

This will be the third exam for F6 and the paper is 100% compulsory, we suggest you revise the entire syllabus.
The following topics are areas which the examiner has highlighted as being important, core areas and will be regularly examined.

Question 1 [25 or 30 marks]
• Income Tax
• Income from employment [in particular, the assessable income, benefits and allowable deductions.]
• Income from self employment [in particular, the basis of assessment, allowable expenditure, assessable profits on commencement and cessation, capital allowances and relief for trading losses.]
• Property and investment income [in particular, property business profits, savings income and dividend income.]
• The computation of taxable income and income tax liability
• The self assessment system [in particular, the time limit for submission of information, claims and payment of tax.]

Question 2 [25 or 30 marks]
• Corporation tax
• Profits chargeable to corporation tax [in particular, the allowable expenditure in calculating the tax adjusted trading profit, capital allowances, property business profits, and relief for trading losses.]
• Computation of corporation tax liability
• Gains group aspect

Question 1 or 2 might include a small element of chargeable gains.

Value Added Tax [10 marks]
A minimum of 10 marks will always be allocated to VAT which will be examined either as part of Question 1 or 2.
The VAT element will be self contained and so can be answered on its own.
• The computation of VAT liabilities [in particular, the tax point, valuation of supplies, non deductible input VAT, relief for impairment losses on trade debts]
• Default Surcharge
• The annual accounting scheme.

Question 3 [20 marks]
Capital Gains Tax
• Computation of capital gains
• Computation of the amount of allowable expenditure for a part disposal
• Computation of a chargeable gain on disposal of a chattel
• Computation of exemption when PPR is disposed
• Share identification rules - Individuals
• Exemptions and reliefs [in particular rollover and holdover relief]
• Computation of capital gains tax payable by Individuals [in particular the calculation of taper relief.]

Question 4 [15 marks]
Some aspect of Income Tax or Corporation Tax not examined within question 1

Question 5 [10 marks]
Some aspect of Corporation Tax or Income Tax not examined within question 2
Partnerships [with explanation of loss relief]
Corporation tax loss relief
Change of accounting date


National Insurance contributions - will not be examined as a separate question, but may be examined in any question involving income tax or corporation tax.

F7 INT – Financial Reporting (international variant)

Question 1
Consolidation possibly 3 company SFP or 2 company I/S and SFP
Question will probably include the update to IFRS 3 affecting Goodwill and NCI calculations

Question 2
Preparation of published accounts from TB to include I/S, SOCIE and SFP - possible transactions, depreciation, revaluation, income tax and deferred tax, lease, development costs.

Question 3
Possible mixed interpretation question to include calculation of a basic statement of cashflow and a report to include calculation of ratios and interpretation of the accounts using the cash flow and ratio results.

Question 4 and 5
Construction Contracts, IASB Framework (elements or qualitative characteristics), Impairment or Provisions.

F7 UK – Financial Reporting (UK variant)

Question 1
Consolidation possibly 3 company B/S or 2 company P/L and B/S
FV adjustments to both purchase consideration and subsidiaries net assets, inter-co loan and PURP.

Question 2
Preparation of published accounts from TB to include P/L, STRGL and B/S - possible transactions, depreciation, revaluation, income tax and deferred tax, lease, development costs.

Question 3
Possible mixed interpretation question to include calculation of a basic cash flow statement and a report to include calculation of ratios and interpretation of the accounts using the cash flow and ratio results.

Question 4 and 5
Long-term contracts, ASB Statement of Principles (elements or qualitative characteristics), Impairment or Provisions.

F8 – Audit & Assurance (UK & International variant)

Q1 – Audit procedures: payroll, CAATs & substantive tests (30 marks)

Q2 – Facts/standards: engagement letters/acceptance (10 marks)

Q3 – Risk & audit approach: identification of risks in audit risk model (20 marks)

Q4 – Specialist audit areas: internal audit (20 marks)

Q5 – Collection of evidence/reporting: events after the reporting date (20 marks)

F9 – Financial Management

• Investment appraisal - NPV/IRR with tax, inflation and working capital is a favourite topic of the examiner, although areas not examined to date include payback, replacement analysis, capital rationing and lease v buy.

• Working Capital Management - receivables are traditionally the most popular topic but payables and cash are due a turn.

• Cost of Capital – given recent articles CAPM, its advantages and disadvantages, and its use in calculating a cost of equity and a risk-adjusted WACC must be expected.

• Risk Management - hedging foreign exchange risk

• Business Finance - gearing/capital structure calculations and comment

• Valuations - asset and cash flow based values

P1 – Professional Accountant

Section A: Compulsory

• always covers range of syllabus areas
• some element of ethics in this question
Section B: 2 from 3

• one question solely on governance
• one question with significant ethics element

Key topics – in section A or B:

• internal audit: independence or appointment (possibly via audit committee)
• remuneration committee
• directors induction and / or appraisal
• ethical decisions: AAA or Tucker
• stakeholder categorisation
• normative / instrumental views of stakeholders
• board structure: family / insider or unitary / two tier
• Corporate Social Responsibility (CSR)
• sound internal controls

P2 INT – Corporate Reporting (International variant)

Compulsory group question within part A could be:

• Cashflow (not examined under the new syllabus, but in the pilot paper)
• Group income statement which will examine aspects of IFRS 3 revised (goodwill and NCI at fair value)
• Accounting for changed shareholdings in group structure

Within the compulsory question, there may also be some explanation and application of ethics and/or a written element which includes IFRS 3 revised.

Multi-topic question to include aspects of:

• Impairments
• Share-based payment
• Financial instruments
• Retirement benefits
• Discontinued and held-for-sale
• Deferred tax
• Provisions and events after the b/s date

Current issues:

• Retirement benefits – Discussion Paper within examinable documents
• Financial Instruments – Discussion Paper within examinable documents
• IFRS 3 Revised
• Harmonisation of international standards

P2 UK – Corporate Reporting (UK variant)

Compulsory group question within part A could be:

• Cashflow (not examined under the new syllabus, but in the pilot paper)
• Group income statement - accounting for changed shareholdings in group structure during the year
• Some explanation and application of ethics

Multi-topic question to include aspects of:

• Impairments
• Share-based payment
• Financial instruments
• Retirement benefits
• Discontinued and held-for-sale
• Deferred tax
• Provisions and events after the b/s date

Current issues:

• Retirement benefits proposed changes to UK and international standards - i.e. harmonisation

• Financial Instruments – proposed changes to UK and international standards:

1. ASB issues Amendment to FRS 25 'Financial Instruments: Presentation'
14 August 2008 @ 10:00
http://www.frc.org.uk/asb/press/pub1676.html

2. ASB to issue Amendments to Permit Reclassification of Financial Instruments
16 October 2008 @ 17:00
http://www.frc.org.uk/asb/press/pub1739.html

3. Possible revisions to reporting business combinations per IFRS 3 Revised to harmonise UK and IFRS

4. Harmonisation of financial reporting standards generally - i.e. UK FRS, IFRS and US GAAP

It may be a little too soon for a question on problems re fair values which, although this is a problem in the real world at the moment, in the context of when the examiner probably wrote and had the paper checked for quality control is more likely to be examined next time. Therefore, the first improvement standard is less likely to be examined than the topics above.

P3 – Business Analysis

Section A

• Question 1 will still focus mainly on the strategic planning process. Key areas may be:

? SWOT
? Ansoff
? Acquisition

• Also expect an implementation issue such as culture or change management

Section B

• If culture and/or change management do not appear in the compulsory question then they may appear in the option questions

• Other areas may be:

? TQM
? Supply chain management
? Choosing & evaluating an IT system

P4 – Advanced Financial Management

Section A

• Business valuation (various methods, with pros and cons)
• Option pricing – Black Scholes model


Section B

• Interest rate hedging (futures and options), bond pricing and credit spreads
• Stakeholders and conflict of objectives
• Investment appraisal – with foreign currency

P5 – Advanced Performance Management

• Corporate failure as per recent article (July 08)
• Pricing (transfer pricing)
• Strategic planning and gap analysis
• Performance measures for both private and public sector
• Environmental management accounting

P6 – Advanced Taxation

- IHT vs CGT for lifetime gifts
- Sole trader/partnership cessation (IT, NICs, CGT and VAT), possibly with incorporation
- Lease versus buy for assets
- Employed versus self-employed (IT and NICs)
- Badges of trade (IT vs CGT)
- Trusts (not a whole question)
- Corporation tax – possible areas:

-R&D

-SSE

-Expansion overseas/CFCs

-Group reorganisations

-Liquidations

- Overseas aspects of personal tax

- VAT group registration

- Ethics (up to 5 marks)

P7 – Advanced Audit & Assurance (UK & INT variant)

Core areas of the syllabus expected to be examined in every sitting:
• Engagement planning and risk (audit risk likely this sitting);
• Gathering evidence;
• Ethics/professional issues; and
• Engagement reporting (particularly audit qualifications).

Subject of recent articles:
• Forensic investigations and audit (September 2008). (Likely to include elements of planning and/or gathering evidence similar to question 2 of pilot paper).

‘Peripheral topics’ from exam approach article yet to be covered:
• Regulatory framework;
• Obtaining professional work; and
• Corporate governance.