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Time pressure is a huge issue on this exam. I am usually a guy that does very well on time but in this case, I might have left about 22 marks (most of Q2) on the table which equates to needing 50/78 (or 64%) on what I did answer. But what I did answer, I felt fairly comfortable with.
I did not find the exam to be unreachably difficult and perhaps it was challenging but certainly passable if you have read the study text and done practice questions. The problem is that the analysis requires too much time and there is insufficient time in the exam.
This begs the question, what is the purpose of the ACCA exams? I would have thought that this would be to demonstrate that you have the prerequisite competence to apply the syllabus to different scenarios. Not that you should do this as quickly as possible and forego some degree of accuracy to finish the paper. Why even have a time limit? Why not have a time window at the professional stage?:Does the time pressures of the exam reflect the professional reality in which we live? I think that these are questions that should be asked and dealt with.
From my perspective, if I were a CEO of a company trusting the CFO or treasury manager to make a recommendation on financial strategy or tactics, I would want a high degree of accuracy first and foremost, even at the expense of extra time.
@leonardl said:
what you guys talk about the contingent consideration? Is it part of the goodwill?Yes. See ifrs 3 or p2 text
@virgilbucur said:
Yes with the value of equity: used FCF under dividend growth model and substracted debt to get the value of equity.
For Q4- yes, we should have used the date from the question- Ve and Vd specific for compoenent parts. I assumed that beta equity of my source data was and average of its two activities and obtained the beta and then so forth with ungearing and gearing…I have obtained a WACC of 13%.Someone said that in Q1 – point d, they asked us to comment on shareholders reactions and also estimates used: I think here we should have spoken about dividend groth model, the groth rate assumption, the estimated synergies given in the question and the BS model used in poind c.
Correct me if I am wrong.To be honest I stayed on Q1 more with 20 minutes that I should. This left me only 15 minutes for last question: I tried Q5 and writte like 1.7 pages about 3-4 risks and mitigation.
Hope we pass. Its a very time pressure exam !
There has to be some moderation. I’m usually pretty good with time but had to drop 15-18 marks on q2 this time. But on the plus side q5 was nice and I also did q4 which I feel happy with. Hoping for 30-35 marks from those.
I only really criticised the growth assumption but cut ally really didn’t have time to say more. The assumptions are a lot on that one. It’s a shame really.
I know they better give me the professional marks. Also I am really hoping that there is some form of moderation on the marking scheme.
Otherwise I’ve just pissed away my all first time pass record
I did something strange in q1. I used my firm value after fcff – value of debt to get the market value of the shares. I then used this to get the price per share. I used the premium paid as a reduction to the post acq value of the predator in the cash proposal. I used the changes in the shares outstanding to also answer q 2. My wacc was based on a regeared beta. If 75% of equity and 80% of debt is non component activities, the 1 – the above percentages gives me the debt and equity values for the component activity. I used this to regear given the percentages available and got a wacc of 11%. That’s what I used to discount my fcff.
@maneesh23 said:
left solid 6 marks due to time pressure , what do you recon guys can get 50??yeah for sure, if you took your time on the other parts and answered carefully.
@accaforall said:
Strictly followed the 1.8 ratio and attempted all the questions. hoping for good result.
Q 5 was on Business plan & PFI, asked:(a) matters to be considered when ageeing the terms of engagement; and (b) procedures to be applied on the Forecast Financials….I thought that was question 2?
i struggled with 18 marks.. probably came away with 8 reasonable points. Hoping its 2 marks each.
4. (a) about a company with a proposed direct business relationship with the audit client selling audit and tax software and splitting the revenue.
(b) An audit client that lost 2m in cash receipts with no documentation wired to offshore island from bank account.Audit risk – the risk of auditor expressing the wrong opinion on the financial statements.
Audit risk is a function of inherent risk, control risk and detection risk. The auditor only has control over the detection risk (using resources, increasing sample sizes, supervision, involvement of an auditor expert, professional skepticism).
The inherent risk and the control risk together make up the risk of material misstatement (or, ROMM). Think about it like this, if RoMM is high (no controls, naturally risky account), we will increase our sample sizes so that we can detect more.
The aim is to reduce audit risks to an acceptable level so that we can support the opinion.
The above are all considered to be financial risks.
Business risks are risks that the entity will not meet its objectives efficiently, effectively or economically (the 3 E’s).
While an external auditor is mostly concerned with financial risks, an internal auditor is probably concerned with both business and financial risks.
However, external auditors can assess business risks for the purposes of gaining assurances over assertions made on the financial statements. A particular frequent occurrence of this, is assessing the use of going concern as a financial statement level assertion.
For example, a business may budget that it will make a loss due to obsolescence in technology. That loss may lead to a default on interest payments. If that default occurs, the entity may no longer be a going concern. Now we must gain additional evidence over going concern as there is a doubt over it and perhaps the financial statements will need to be stated on a break-up basis. The business risk has financial implications.
Don’t worry OT peeps… Keep your head up. Intelligence is not a trait, it can be learned. Just enjoy your summer, wait for the results and if it doesn’t go your way, show the examiner your resilience, determination and ability.
We can all do this. Just be strong.
Yeah i just bombed that beast…
In reality – strategy is about long term and we would all have more time to carefully make good suggestions.
In exam world – we are super people.
Ask the F7 students about time pressure… if you knew your stuff this was a very manageable exam in terms of time, albeit quite tricky.
in the payoff tables:
* if demand = production then its just the contribution times the number of bags
* if demand > production then there is no penalty and its just the contribution x the demanded units.
* if demand < production then its the contribution * demand - (unsold * 0.50). Thats how you get the payoff table. Then you can apply the mini max and the maxi max…. after that to get the expected values you just multiply each payoff table cell with the probability of that corresponding demand to get the value of x. Then sum all the productions to get the expected values… you then select the highest expected value out of the production choices. Thats what I got at least. I can’t remember the numbers but I do remember that the contribution from the 200,000 production level was $1m regardless of the level of demand.I said a prayer this morning and then did some last minute revision – on sales mix variances and on pricing. I cannot believe that they both showed up.
Throughput on the other hand was tough – especially the practical element. I gave every bit a good shot but I know I failed the question.
Flex budget was nice and easy if you picked out the information and just systematically hacked at it.. It would have appeared hard if you took any other approach. I might have got a calculation wrong but I was very clear with my workings and my approach.
Risk and uncertainty was unexpected but the same applies. I saw it in BPP revision notes and was able to tackle it.
I am really happy with my luck and the paper and to tell you the truth, I’d rather be lucky than good because as you will realise when you do a professional level exam, there is too much information to know every last bit of the syllabus.
@marky123 – while they don’t negative mark, its always best to set a good impression with knowledge at the beginning of every script and the beginning of every question so that you buy the markers goodwill. Remember that marking guides can be very subjective so brownie points definetely impact performance.
Corp gov
a) wrote about the OECD definition – simply how companies are managed and controlled. and then wrote a little about the backdrop
b) Extra legal
Listed entities tend to need to use it
Features – INSIDE A CRAB (just gave a few examples, internal control, audit commitee, balanced board, disclosure).c) Just described what NEDs in a balanced board do (supervisory role over execs). and then gave a few examples of subcommitees they make up (audit commitee, etc). Independence and objective element to management.
Quite a simple question if u applied a sensible approach – I hope to come away with 8-10 marks.
I think you will earn more marks than you think.
I talked about both the DvS case, neighborhood principle, caparo v. dickman and then went on to talk about the factors (thin skull etc). My thinking was this was a safer approach because in either case you’d pick up at least a few marks rather than gamble.
usually in these questions they can give u more than 10 marks but they cap at 10 and they should recognise the ambiguity and the fact that you took a sensible approach. So I don’t think it should be a problem.
part b was the part on pre-incorporation contracts.
for part a – i defined promoter. I said that they have all the duties of an agent without the ability to contract for the principal (no indemnity). And then just went on to say how they had a fiduciary duty to act with care and skill, not to make a secret profit, to avoid conflicts of interests etc. No idea about how they are regulated.
I talked a little bit about their liability but then realised it was probably more relevant to part b so I talked about it there.
Part b – I said that they were unable to bound, would be liable for contracts entered into, they still have ostensible authority, the third party would not know. And then talked about the ways to circumvent the problem – novation, contract in draft and purchase off the shelf co.
I am sitting F4, F5 and P3 this sitting. You can definitely sit skills and professional together so long as its the only skills left and you are sitting them at the same time.
Hope that helps.