General ACCAACCA JUNE 2017 EXAM TIPS - BPP, LSBF, First Intuition

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BPP's EXAM TIPS

F5 • Planning & operation variances. • Mix & yield variances. • Evaluation of the company (either as a whole or on a divisional basis). F6 Section A & B • Due dates for payment of income tax (payments on account). • Due dates for the payment of corporation tax (installments for large companies). • Filing dates for the income tax and corporation tax returns. • Penalties and interest for late payments and returns. • VAT rules on registration, impairment loss (bad debt) relief, and SME schemes relating to cash accounting, annual accounting and flat-rate schemes. • Inheritance tax due on lifetime transfers both in the donor’s life and on death. • Statutory residence tests for individuals. • Identification of groups of companies for corporate tax loss relief and gains. • Trading loss reliefs for both companies and sole traders. Section C • Focus on income tax and corporation tax, including the following: • Employment benefits. • Property income. • Relief for pension contributions. • Adjustments to profit to arrive at trading income. • Capital allowance computations. • 10-marker on VAT, IHT or CGT. F7 Section A • Several on consolidation and interpretation of financial statements. • Non-core areas – inflation, specialized entities. Section C • One covering interpretations and the other preparation of financial statements. • One will be in the context of a single company and one in the context of a group – so you could have a single company interpretation and a groups preparation or vice versa. • Accounts preparation questions may include extracts or stand alone calculations or full statements of profit or loss and other comprehensive income and/or statement of financial position. • Accounting for items from other areas of the syllabus. • Statement of changes in equity, statement of cash flows extract, earnings per share calculation or linked written. • Consolidation question – fair values, deferred/contingent consideration, PUP on inventories/PPE, intragroup trading and balances, goods/cash in transit. • Single entity – trail balance or restatement of given financial statements with the usual adjustments for depreciation, revaluation and current/deferred tax (revaluations). Plus a mixture of adjustments such as leases, substance over form, financial instruments, share issues, government grants, inventory valuation, revenue recognition or construction costs. F8 • Audit planning. • Audit risk – identify and explain audit risk and explain the auditor’s response to each risk. • Internal audit. • Internal controls – deficiencies of internal controls and recommendations of suitable internal controls or description of tests of controls. • Audit procedures – both substantive procedures and tests of controls. F9 Section A • Ratio analysis. • The concept of shareholder wealth. • Financial intermediation. • Fiscal & monetary policies. • The efficient markets hypotheses. Section B • Working Capital management – operating cycle, change in credit period or accepting a factor’s offer. • Business or security valuations – methods of valuation. • Financial risk management – currency risk, interest rate risk. Section C • Working capital management. Section D • Investment appraisal – NPV with inflation and tax. Section E • Business finance – evaluation of financing options (interest coverage and gearing ratios) or cost of capital calculation. P1 • You can expect to see the use of stakeholder, ethical and other CSR theories applied to the scenario. • Use of risk. • Control and governance – board directors, remuneration and reporting. • Dysfunctional behaviour – bribery and corruption, environmental risk and poor ethical stance. P2 • Preparation of a statement of financial position and/or group statement of profit or loss and other comprehensive income or statement of cash flows, including foreign subsidiary, discounted activities, disposal and/or acquisition. • Discursive requirements on a linked accounting adjustment and social/ethical/moral aspects of corporate reporting. • Multi-part question testing – fair value measurement, deferred tax, foreign currency transactions, financial instruments, pensions, share-based payment, non-current assets (recognition and/or impairment of tangible and intangible assets), borrowing costs, accounting treatments on earnings per share or ratios. • Industry based question – testing a range of standards such as accounting policies and the framework, leases, grants, IFRS for SMEs, reorganisations, provisions, events after the reporting period and related parties. • A discussion question looking at current developments in corporate reporting – the definition and disclosure of capital, revision of the conceptual framework, classification in profit or loss vs OCI, leasing, improvements to disclosures, regulatory issues over adoption and consistent application of IFRSs, implementation issues, application of the definition of control and significant influence (equity accounting), improvements in performance measurement, integrated reporting, revenue recognition. P4 • Q1 – project appraisal (domestic or overseas). • Business valuations. • Cost of capital calculations. • Risk management – VaR, real options, hedging, risk mapping. • Risk management (currency or interest rate). • Business re-organisation. • Real options. • Dividend policy. • Behavioural finance. P5 • Data analysis using numerical techniques – KPIs, EVA. • Transfer pricing. • Ratios. • Analysis of quality related costs. • ABC. • Performance management frameworks – building blocks, performance pyramid, balanced scorecard. • Quality management. • Information reporting – CSFs and KPIs. • Application of strategic models – PEST, Porter’s 5 forces, the value chain. • HR frameworks – reward and appraisal systems. • Risk management. P6 • Groups of companies involving overseas aspects and losses. • Unincorporated business particularly loss relief or involving a partnership, basis period rules should also be expected. • Capital gains tax versus inheritance tax including availability of reliefs. • Overseas aspects of income tax, capital gains tax, IHT or corporation tax. • Personal service company. • Share schemes. • Company purchase of own shares. • Enterprise investment schemes/Seed EIS/ venture capital trusts. • Takeover. • VAT – partial exemption or land and buildings or transfer of a going concern or overseas transactions. • Transfer of trade versus sale of subsidiary. • Disincorporation relief. • Pension contributions. • Patent box, research and development expenditure. P7 • Planning, risk assessment, evidence gathering & practice management. • Non-audit engagement – prospective financial information (PFI). • Due diligence. • Audit completion or consolidation groups. • Audit evidence. • Financial reporting issues. • Practice management – ethics & quality control and reporting. • Reporting – completion and communication. • Environmental management accounting.

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LSBF's JUNE EXAM TIPS

F5 • Sections A and B: Costing methods (ABC, throughput and lifecycle) and decision making (relevant costing, linear programming and uncertainty). Section C: Transfer pricing, budgeting and advanced variances. F6 • Income tax – looking at a sole trader or partnership business and calculating the tax adjusted profit. Calculating the income tax liability, with the savings income and dividend income nil rate bands being examined. • Corporation tax – looking at a company with a long period of account, requiring two corporation tax computations. Corporation tax implications of companies belonging to a 75% loss group. • Chargeable gains – calculating gains made by an individual on disposals of residential property versus disposals of non-residential assets. • Inheritance tax – calculating IHT on lifetime gifts made within seven years, with taper relief, and looking at advantages of lifetime gifts over death gifts. • VAT – calculation of VAT payable, overseas aspects of VAT and VAT groups. • Watch out for some sort of tax planning question, for example, how profits from a company should be extracted or looking at the tax planning opportunities available to married couples. F7 • For the 60 marks of MCQs in Section A and B, the entire syllabus must be covered, including the more obscure standards (recent questions have covered R&D, government grants, borrowing costs, investment properties, etc). • Depreciation and revaluation, deferred tax, associates, effect of company payment policies, etc, on working capital ratios. Watch out also for objective test questions, that is where no alternative answers are given to guide you, usually in numerical questions. • Section C: Ratios & interpretation, including adjustments to be made before comparison to last year or a different company; published accounts with standards, including cash flow aspects; consolidations. F8 • Corporate governance recommendations. • Audit committee roles/benefits. • Audit risk and response. • External auditor’s responsibility for fraud/laws and regulations, affecting the client. • Internal controls: deficiencies in the client’s systems (purchasing/ payroll), recommendations for improvement and tests of control. • Substantive procedures on revenue, tangible non-current assets, payroll, inventory. • Computer assisted audit techniques. • Auditor relying on the work of others. • Subsequent events. • Audit report. • Internal auditor. F9 • Section A – various questions from across the syllabus. • Section B – valuations and risk management. • Section C – investment appraisal, including an NPV and business finance. P1 • Roles of NEDs and chairman. • Board performance evaluation. • Rules v principles governance. • Public v private sector governance. • Stakeholder prioritisation (e.g. Mendelow). • External IC reporting. • Objective v subjective risk. • Correlated risks. • ERM. • Bribery and corruption. • Kohlberg. • Gray, Owen and Adams. • Corporate codes of ethics. • Integrated reporting and social/environmental footprints. P2 • Q1 – balance sheet or CFS or Sploci, in that order. • Q2 and Q3 – usual suspects of FI and NCA and impairment and revenue and leases groups, and so on. • Q4 – investors needs or provisions or groups current issues. P3 • Strategic analysis. • Evaluation of options. • Scenario planning. • Suitability of and Implementation of BPR. • Improving website effectiveness. • Decision trees. P4 • International NPV. • Foreign exchange risk. • Mergers & acquisitions. P5 • Suitabilty of metrics. • Financial approaches to decision making. • Value based approaches to decision making. • Link between new processes and new information requirements. • Improving quality. P6 • IHT with the death estate including BPR and APR and lifetime gifts, gifts with reservation and relief for a fall in value. Domicile including deemed domicile and election to be treated as UK domiciled and deed of variation. • Takeovers and mergers. • Group question, sale of shares versus sale of the trade and assets. • Relief for trading losses made by a sole trader/partnership at the beginning or end of the trading cycle. • Residency rules, remittance basis and overseas aspects of income tax. • Investment in a VCT the theory versus investing in a registered pension scheme. • Overseas aspects of VAT. • Share incentive plan versus EMI share option scheme. • Ethics – conflict of interest or duties of a senior accounting officer. P7 • Audit risk. • Business risk. • Audit of public sector performance information, social and environmental info. • Accounting matters and audit evidence. • Ethics and professional issues including money laundering, advertising, quality control. • Audit report scenarios including KAM, MURGC. • For UK students, insolvency.

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First Intuition

P1 • 50-mark scenario question to include ethics, governance and risk management, integrated reporting and directors’ remuneration. • Optional questions to include evaluation of risks and their mitigation, Tucker’s five question model on ethics and the role of NEDs in the management of risk.   P2 • Q1 – Group question on disposals or step acquisitions. • Ethics. • Revenue recognition. • Provisions. • Deferred tax share-based payments. • Pensions P3 • Three strategic lenses. • Industry lifecycle. • Pricing strategy. • Value chain. • Critical success factors. • Organigram. • Globalisation. • Porter’s generic strategies. • Change Kaleidoscope. • Harmon’s process strategy mix. • 6 I’s. • Business case. • Leadership. P4 • International investment appraisal techniques focusing on risk management tools such as value at risk. • Option valuation. • Capital structure: traditional debt finance and Islamic finance – Sukuk bonds. • Financing strategy. • Business valuation. P5 • Critique an existing performance management system and the performance hierarchy. • Quality as a critical success factor. • Benchmarking. • Effective use of information systems. • Reward systems linked to performance measures. • Performance model (balanced scorecard or performance pyramid). • Risk management techniques. • Transfer pricing. P6 • Incorporation relief/ disincorporation relief. • Remittance basis. • Pensions consortia. • Patent box. • Takeovers. • Commencement of trade (basis periods/losses). • VAT – option to tax and partial exemption. • EIS, SEIS and VCTs. P7 • Business or audit risks in a scenario. • Identifying ethical and other professional issues in a scenario. • Matters to be considered and audit evidence for a couple of core accounting issues. • Forensic auditing. • Insolvency issues (UK stream). • Discussion on current issues.