ACCA exam tips PQ

Weve got the best tips in the whole of PQ land sponsored by Reed Accountancy
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F5 Throughput accounting/lifecycle accounting. Linear programming/decision tree analysis. Zero based budgets/flexible budgets. Sales variances/mix and yield variances. Performance evaluation in services/non profit organisations. F6 Income tax computation and partnership. Corporation tax with trading losses. Capital gains tax with principal private residence relief. Overseas corporation tax with the election to exempt the profits of the overseas branch from UK corporation tax. IHT on lifetime gifts into a trust. VAT group registration and surcharges. F7 Consolidated financial statements and/or consolidated income statement. Published accounts preparation or re-drafting with 15 marks for mixed standards adjustments. Statement of cash flow with some interpretation. Depreciation and revaluation, EPS, substance, leasing. Financial instruments, tax and deferred tax, etc. F8 Wide reading is recommended know a little about a lot! Audit of specific items especially non-current assets, receivables and payables. Internal controls especially control environment. Audit planning and risk

Option pricing theory. Real options, example, option to abandon, expand and delay. Valuation of company using the Black-Schole option pricing model and delta hedge. Hedging exchange rate and interest rate risk using futures, options and swaps. Islamic finance. P6 Incorporation of a business including incorporation relief. Corporation tax including overseas aspects and controlled foreign companies. Partnership. Rent a room relief. Inheritance tax including business property relief. Personal service companies or purchase of own shares. Investment in SEIS. Remittance basis charge.

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assessment especially audit risk issues. Audit reports especially emphasis of matter, final review especially evaluation of misstatements and/or subsequent events. Others, assurance, ethics and internal audit. F9 Investment appraisal including tax and inflation possibly with lease or buy decision. WACC with some capital structure theory. Working capital maybe including cash budgeting and cash management. Risk including FC and MMH. Business finance with discussion of sources of finance. EMH discussion. P2 Group income statement or cash flow statement. Possibly two mix questions with the usual suspects of goodwill provisions financial instruments and sbp and the rest. Current issues including leases small and medium sized enterprises and joint ventures. P3 Strategic analysis. Evaluation of a strategic option using suitability, feasibility, acceptability. Project management particularly the initial stages. Improvement of business processes. Strategic management accounting. P4 International investment appraisal with adjusted present values or net present values. Cost of capital using the principles of Modigliani and Miller prepositions or geared and ungeared betas. Mergers and acquisitions valuation using free cash flows, defensive tactics and regulations of takeovers. Capital reconstruction schemes designing a capital reconstruction scheme or assessing the success of a given scheme.

Kaplan Financial
F4 English legal system: court structure, court vs tribunal. Contract law: exclusion clauses, intention to create legal relations. Tort of negligence: duty of care, professional misstatement. Employment law: common law duties, redundancy. Agency/partnership: how agency relationship arises, liability of agents & partners. Company law: separate personality/lifting the veil, articles of association, treasury shares. Fraudulent behaviour: money laundering, market abuse. F5 Pricing equations & pricing strategies. Environmental management accounting. Learning curves. Variances: sales variances, market size and market share. Decision trees. F6 Income tax: Husband and wife, adjustment of profits, self Continued on page 18

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Continued from page 17 assessment. Corporation tax: property income, chargeable gains to calculate, with rollover relief, quarterly instalment payments. VAT: VAT return, including some discounts and impaired debts relief, deregistration, payment dates. Capital gains tax: wasting assets or chattels, exempt assets, PPR, gift and entrepreneurs relief. F7 Q1: consolidated statement of financial position (with possible statement of profit or loss). Adjustments to include: PURP, share exchange, current accounts, impairment, revaluation, fair value adjustment. Q2: published accounts to include statement of profit or loss, statement of financial position and statement of changes in equity from trial balance. Possible adjustments to include: revenue recognition, depreciation, revaluation, tax and deferred tax, convertible loan, share issue. Q3: statement of cash flows with interpretation element. Q4/Q5: qualitative characteristics, finance leases, intangible assets, events after the reporting date, earnings per share. F8 Audit Framework: confidentiality/ conflicts of interest/audit committees. Internal audit: role and function. Planning and risk: audit risk including analytical procedures. Internal control: cash/purchases system (including tests of control). Audit evidence: purchases/ payables; bank and cash; review engagements. Completion and reporting: subsequent events (ISA 560) auditors reports. F9 Investment appraisal: the most common technique assessed is NPV with inflation and taxation, although be prepared for a twist. Working capital management: Its been a while since weve seen the more numerical aspects surrounding cash management. Valuations: cash flow based values have yet to be examined although the PE ratio and dividend valuation methods have. Business finance calculation and interpret financial ratios. Cost of capital: (WACC) and impact of the cost of capital on investments. CAPM based calculations. 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 between mission and CSFs, KPIs. Evaluate PM system. Evaluate format and content of a PM report. Building block model. P6 Corporation tax: capital gains groups, NGNL and rollover relief, group relief/consortium relief, overseas aspects: branch vs sub/CFCs/transfer pricing. Capital gains: reliefs: rollover, holdover, gift, PPR and letting, overseas aspects. Inheritance tax: valuation of shares, deed of variation, business property relief. Income tax: sole traders opening year rules, trading losses, benefits: car, accommodation, share incentive plans. VAT: partial exemption, land and buildings, group VAT registration. Scenarios: lease versus buy assets: net cost, company purchase of own shares, IHT versus CGT for gifts. P7 Engagement planning and risk assessment. Engagement procedures. Ethics and professional issues. Completion (matters to consider/evidence on file) and engagement reporting. Planning. Subsequent events (ISA 560). Due diligence. Auditors responsibilities regarding fraud. Limited liability. Competition in the statutory audit market. Improving the audit report. UK variant is likely to include an aspect of insolvency.

First Intuition
F4 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 mix and quantity) and budget flexing. Divisional performance and transfer 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 VAT invoice content and annual accounting. CGT: principal private residence and entrepreneurs relief, chattels. IHT lifetime and death transfers. F7 Q1: consolidated SFP, with associate, deferred consideration, pups and fair value adjustment. Q2: single company accounts question, including taxation, lease, and intangible assets. Q3: statement of cash flow and comments thereon with no ratios. Q4: the framework with computation for non-current asset. Q5: provisions. F8 Internal controls deficiencies and recommendations. Scenario based ethics or corporate governance question. Substantive testing and audit evidence. Audit reports.

To see our comprehensive tips for all the papers go to www.pqmagazine.co.uk and click on ACCA study zone. BPP and Open Tuition have provided us extensive tips for these papers get online now! P1 Teleological and deontological approaches to ethics. Corporate code of ethics. Insider trading. Internal controls systems. Transparency in the context of corporate governance. Directors remuneration. Normative and instrumental view of stakeholders. P2 Groups and ethics financial instruments, joint arrangements, foreign currency. Ethical issue accounting treatment in the group accounts question. IAS 19 Employee benefits. IFRS 2 Share-based payment. Entity reconstructions including accounting issues. IFRS 9 & IAS 39 Financial instruments including hedging. P3 Project management. Benefits management. Supply chain management. Business process change. Stakeholder analysis. Decision making techniques. P4 Net present value including

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ACCA exam tips PQ

F9 Discussion of the economic environment and the impact on interest and exchange rates. Working capital management. Investment appraisal and cost of capital. Business Valuations. P1 50-mark question to include: TARA risk model, ethics, absolutist v relativism, chairman and CEO powers, corporate social responsibility, ISO 14001. Optional questions to include: importance of internal control, NEDs and remuneration committee, business risks, Gray Owens and Adams. Bribery Act. P2 Q1: group question on disposals, piecemeal acquisitions or cashflow. Ethics. Revenue recognition current issue. Deferred tax. Share based payments. P3 Environmental Analysis people with financial analysis. Project management. Strategic action. Information technology pricing strategy. P4 International investment appraisal techniques focusing on risk management tools such as value at risk. Impact on WACC following hedging of interest rate risk. Company valuation based scenario, possible MBO finance to structure. Adjusted present value with link to real options and Black Scholes option pricing model. P5 Critique an existing performance management system. Transfer pricing. ROI, RI and EVA. Activity based principles.

LEGS 11
Damian Pichard has a simple mission to explain how you can pass ACCA exams
1) Be properly prepared its a lot easier than retaking. 2) Dont panic it doesnt help and it wastes time. 3) If you dont know the answer to a question guess make it up. You may pick up some marks. 4) Always answer the right number of questions. 5) Always answer every part of every question you attempt. 6) Answer the question that has been asked not the one you wished had been asked. 7) Practise rigorous time allocation and management. 8) Use bullet points whenever appropriate to save time. 9) Look at how many marks are Corporate failure prediction. Performance management models. Assess performance against financial and non-financial (including environmental) targets. P6 Business property relief. Use of second spouse nil rate band. Related property. Groups of companies, trading and capital losses. Double tax relief for companies. De-grouping charges. Incorporation relief. Furnished holiday lets. VAT partial exemption. Appeals and the four-track tribunal system. Benefits in kind or extra salary, income tax and NI implications. P7 Audit risks in a scenario.

being given to judge how much to write and how long to take. 10) Help the marker to give you marks: be concise (theres no extra marks for length); keep it neat (theres no marks if the examiner cant read it); keep it relevant (theres no marks if it isnt about the question). 11) Never leave the exam early its your only chance to earn marks. Damian Pichard, University of Northampton Identifying ethical and other professional issues in a scenario. Audit reports. Group audits. Money laundering.

holiday lettings, together with a personal income tax computation. Employment income, NICs. Relief for a trading loss of selfemployed persons. A change of accounting date is due for examination. 12-month accounting period straddling 31 March, with a detailed adjustment of profit and detailed capital allowances computation (motor cars see above). Capital gain with rollover relief. Capital gains tax computation for a personal taxpayer. Possible gain/loss caluculations. VAT treatment of overseas trading. Class 1 and Class 1A NIC, in conjunction with employment income, benefits and PAYE. Tax appeals and penalties. IHT unused nil rate bands from a predecessor spouse, stage 2 & 3 computations arising on death, applicable exemptions and due date of payment. F7 Leases. Construction contracts. Revenue recognition. Substance vs form. Convertible instruments (IAS 31/IFRS 9). Accounting for taxation. Accounting for asset, particularly IAS 16. F8 Ignore exam tips that are a list of somebodys favorite topics. F9 Rights issues. IRR. Dividend policy. Lease vs buy decisions. Efficient markets hypothesis. P1 Corporate governance concepts, underlying fundamentals and arrangements. CG in organisations such as public services and NGOs. Types and forms of CG. Agency theory. Board structures. Continued on page 20

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F5 Section A throughput accounting and or environmental management accounting. Section B decision trees. Section C a calculation including activity based budgeting. Section D mix and yield variances, along with discussion. Section E performance measurement in non-profit organsiations. F6 Taxation of benefits. Taxation of motor cars. Employment income. Different types of property income, including furmished

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PQ ACCA exam tips

Continued from page 19 Internal control and business risk, Turnbull. Ethical theories and business codes Koihlberg, Gray, Owen and Adams, 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 (IAS 39/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, using PESTEL or Porters 5 forces and the impact of change on all stakeholders. Business process change or improvements. Close down procedures, opening balances, comparatives. Outsourcing, service providers, use of an expert. CG, internal audit (ethics/ outsourcing), audit committees. Current issues.

Sunil Bhandari
F9 Q1: investment appraisal NPV with tax, inflation and working capital. Discussion on capital rationing or objectives of a listed company Q2: compute WACC of a company; discussion on capital structure. Q3: financial forecast income statement and SOFP; investor and gearing ratios; Islamic finance Sukuk Bonds. Q4: working capital inventory; management EOQ; cash budget or payables management; FOREX hedging forward contract and MMH for a FX payment. P4 Q1: foreign investment appraisal or business valuation with FCF; risk adjusted WACC; BSOP real option; discussion on ethics relevant to the scenario. Q2: interest rate risk management traditional debt finance; Islamic Finance most likely Sukuk Bonds. Q3: adjusted present value; discussion of the weaknesses of this method. Q4: corporate reconstruction or PQ dividend policy.

LCA
F7 Q1: written element on either IFRS 10 or IFRS 13. Q2: usual multi topic question including finance at amortised cost and leases. Q3: prepare and analysis of a cashflow statement Q4/Q5: IAS 10 and non current assets. F9 Investment appraisal: NPV including identification of relevant cash flows, tax saved on capital allowances, inflation and nominal cost of capital. Calculation of a project specific cost of capital and discussion. Special investment decisions: lease or buy. Working capital management: working capital characteristics of different businesses and the working capital cycle. Overcapitalisation versus overtrading. All aspects of receivables management including credit control, discounts and factoring. Sources of finance and cost of capital. Theories of capital structure (Modigliani and Miller). Company valuation. Dividend growth model vs market value discussion. P2 Q1: foreign subsidiaries or cashflow statement. Q2/Q3: revenue recognition, hedge accounting, retirement benefits, share based pay, deferred tax, leases. Q4: management commentary, the framework. Possibly proposals for hedging, revenue, leases or investment entities.

Corporate level strategy perhaps involving Boston Consulting Group matrix. The role of management accounting in helping to achieve the strategic objectives. Strategy and people, perhaps looking at leadership qualities. P4 Role and responsibility towards stakeholders. Domestic and international investment decisions. Mergers and acquisitions. Corporate re-organisation strategies. Advanced treasury and risk management techniques. Impact of macro economics and international financial institutions. Emerging issues in finance and financial management. P5 Environmental management accounting. Activity based management. Value chain analysis. Balanced scorecard or Fitzgerald and Moon building blocks model. P7 New audits, tendering. Planning, materiality, sampling, analytical review. Audit, business or financial statement risk. Group audits, goodwill, joint audit, joint ventures. Assurance services, PFI, KPI, due diligence, forensic audit, reviews, insolvency. Ethics, practice management and other professional issues. Any audit matter covering IFRS.

GIMME FIVE

Abiodun Mamora recently wrote on LinkedIn: I was 21 years old when I completed all my ACCA exam. I want to help more young people study and pass. If you have opportunity overseas, I want to lecture accounting students in a good institution. We asked for her top five tips to passing, and here they are: Associate with people who have passed some professional exams. Leverage on past exam success to boost your confidence. Forget social, focus on study. Never be discouraged when you fail a paper. I failed a few papers and immediately re-enrolled. Trust in God for grace to do all it takes to study, read and write exams.

HEALTH WARNING

These tips should be used in conjunction with proper study and revision. They are not a substitute for in-depth revision. We cannot guarantee that everything we mention will be on the paper. These tips are a rough guide only, no one knows what the examiner was thinking 18 months ago when the paper was set!

Good Luck from us all!

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