important topics for P5 2017

Hi,

I think the below is a good starting point at least… I had pictures in for some of the headings and they don’t seem to show here but it gives you an idea. Anyone’s input on it is appreciated:

Mission statement
– A purpose
– A strategy
– Policies, behaviours
– Values
CSFs
‘Those product features that are particularly valued by a group of customers, and, therefore, where the org must excel to outperform competition’ JSW
‘Where an org must perform well if it is to succeed’
JSW – 6 steps for developing CSFS
1. Identify the success factors that are critical for profitability
2. Identify what is necessary (the ‘critical competencies’) in order to achieve a superior performance in the critical success factors.
3. Develop the level of critical competence so that a competitive advantage is obtained.
4. Identify appropriate key performance indicators for each critical competence.
5. Give emphasis to developing critical competencies that competitors will find it difficult to match.
6. Monitor the firm’s and competitors’ achievement.

Mendelow’s Matrix

Hierarchy of management
– Strategic
– Tactical
– Operational

Forces for change (Burns & Scapen)
– Technology
– Management structure
– Competition
PESTEL
– Political
– Economic
– Social
– Technological
– Environmental/Ecological
– Legal

Porters Five Forces
– New entrants
– Substitute products
– Buyers
– Suppliers
– Rivalry

Resources
– Money
– Manpower
– Manufacturing/machinery
– Material
– Methods (knowhow/processes)
– Management
– MIS (IT)
– Make (brand)
– Markets & Marketing

Product Lifecycle
• Introduction
• Growth
• Maturity
• Decline
• Senility

BCG Matrix

SWOT

Gap Analysis

Ansoffs Matrix

Benchmarking
• Historical
• Industry/sector
• Best-in-class

Budgeting

Budget Types
Fixed
Flexed
Rolling

Methods of budgeting
• Incremental
• Zero-based
• Activity Based

Participation
• Top-down budgeting
• Bottom-up Budgeting

Hopwood’s use of budgets
• Budget constrained style
• Profit conscious style
• Non-accounting style

Beyond Budgeting

Structures

Types of change
• Automation
• Rationalisation
• BPE

McKinsey’s 6S model

Value Chain

Big Data (definitions)
• Volume
• Variety
• Velocity
• Veracity (is it true?)

Porter’s government effect on Ind structure
1. Capacity expansion (encourage business)
2. Demand (gov spending)
3. Divestment
4. Emerging Ind control
5. Entry barriers
6. Competition policy
7. New product adaption (approavls etc)

Fiscal
Expenditure
Income
Borrowing

Monetary
‘Supply of money’
• Interest rates
• Pronitng
• Reserve req
• Credit controls (lending)

Customer profitability (CPA)
‘ABC for customers’
Identifies profitable ‘types’ of cust

Dedicated cells

Contingency Theory

Institutional Theory

Risk
• Expected Value
• Maximin
• Maximax
• Minimax regret

Good Information
ACCURATE
• Accurate
• Complete
• Cost-beneficial
• User-targeted
• Relevant
• Authoritative
• Timely
• Easy to Use

PAIL (report quality)
Purpose
Audience
Information
Layout

EBITDA
• Relative new Financial measure
• Focuses on what is under control
• Ignores non-cash so reflects cashflow
• However ignores cost of asset renewal

Problems with Divisions

Benefits of Divisions

ROI
‘Controllable profits as % of investment’

RI

Economic Value Added
EVA = Net operating profit after tax – WACC x book value of capital employed

Kaplan & Norton – Balanced Scorecard

Fitzgerald and Moon – Building Blocks

Performance Pyramid

Non-profit
Problems with performance measurement
• Multiple objectives
• Difficult measuring outputs
• Financial Constraints
• Political, social, legal considerations
• Little competition
• No profit motive.

Value for money
• Efficiency
• Effectiveness
• Economy

League Tables

Transfer Pricing

Goal Congruence

Multinational Transfer Pricing
• Taxation
• Import Tariffs
• FX
• Anti-dumping legislation

Corporate Failure Models
Quantitative models
Beaver
• Cash flow / total debt

Altman’s Z score
Z = 1.2 X1 + 1.4 X2 + 3.3 X3 + 0.6 X4 + 0.999 X5
X1 = working capital/total assets
X2 = RE/total assets
X3 = PBIT/total assets
X4 = MVEquity/ BVDebt
X5 = sales/total assets

<1.8 = strong potential for failure
1.8 – 2.99 = ‘grey’ (warning zone)
>2.99 = ‘safe’ zone

Qualitative models
Argenti’s A-Score

Avoiding Failure
Ross & Kami – 10 commandments
• Have a strategy
• Have controls
• Board must participate
• Avoid one-man rule
• Management in depth
• Keep informed of, and react to, change
• Customer is king
• Do not misuse computers
• Do not manipulate accounts
• Organise to meet employees needs

Discounted CF techniques
• NPV
• IRR
• MIRR

Behavioural problems
• Tunnel vision
• Sub-optimisation
• Myopia
• Measure fixation
• Misrepresentation
• Gaming
• Ossification

Changing role of accountants

Quality
• Total Quality Management (TQM)
• Six Sigma
• Life-cycle costing
• Just in time (JIT)
• Target Costing
• Kaizen Costing

Environmental Accounting
• Input / output analysis
• Flow cost accounting
• Environmental ABC
• Life cycle costing

Sampling

Data presentation

Bayes’ Theorem

begins with “mission statement” – end with “Bayes’ Theorem”

Beyond Budgeting is no longer in the syllabus.

Budget types are missing: Incremental, Zero-based