Kaplan ACCA Exam Tips December 2014

Paper F5
• Specialist cost and management accounting techniques:
– Target costing.
– Lifecycle costing.
– Environmental accounting.
• Decision making techniques:
– Relevant costs.
– Limiting factors.
– Shut down decisions.
– Payoff tables.
– The value of perfect information. • Budgeting:
– Different types of budgetary systems.
– Quantitative analysis.
– Behavioural aspects of budgeting. • Standard costing and variance analysis:
– Different types of standard costs used in budgets.
– Mix and yield variances.
– Behavioural aspects of standard costing.
• Performance management systems, measurements and control:
– Transfer pricing.
– ROI and RI.
– The scope of performance measurement.

Paper  F6
• Income tax:
– Personal allowance reduction/personal age allowance.
– Husband and wife/civil partners. – Employed vs. self-employed.
– Losses (choice of relief/tax saving/ maximum deduction restriction).
• Corporation tax:
– Possibly a straddling period.
– Long period of account.
– Chargeable gains to calculate.
• VAT:
– Separate part of question 1 or 2 or whole question 4/5.
– Discounts.
– Impaired debts.
– Invoices/simplified invoicing.
• Capital gains tax:
– Husband and wife making disposals.
– Wasting assets or chattels.
– Exempt assets.
• Inheritance tax:
– Transfer of unused NRB between spouses.
• Sundry topics for Q4 and Q5:
– Comparative scenario or other new style question.
– Self assessment.
– Ethics (including general anti- abuse rule).

Paper F7
Tips are no longer relevant for F7, due to the paper now consisting of 40% OTs.

However, it is essential to know the wide variety of accounting standards and concepts, as well as being able to construct sets of financial statements.

Paper F8

• Audit Framework: ethics/ confidentiality/audit committees.
• Internal audit: direct assistance by internal audit for external audit.
• Planning and risk: audit risks and responses.
• Internal control: cash, inventory, purchases (including tests of control).
• Audit evidence: purchases, revenue, inventory.
• Completion and reporting: written representations (ISA 580), subsequent events (ISA 560), and auditor’s reports.
• Specific standards/topics:
– Limited assurance engagements. – Expectation gap.
– Auditor rights and duties.
– Engagement letters (ISA 210).
– Laws and regulations (ISA 250).
– Components of an internal control system (ISA 315).
– Risk assessment procedures (ISA 315).
– Auditing accounting estimates (ISA 540).
– Financial statement assertions.

Paper F9
• Investment appraisal: NPV with inflation and taxation/IRR has not been tested for over three years so may pop up.

• Working capital management: cash operating cycle and receivables management/payables management or inventory management/funding strategies is a key discursive element.

• Valuations: PE ratio and dividend valuation methods/cash flow-based values/efficient market hypothesis.

• Business finance: the impact of financing on ratios/the impact that different policies may have on a company/being able to both calculate and interpret financial ratios/sources of finance.

• Cost of capital.

• Risk management: foreign exchange risk/interest rate risk.

• The financial management function and the financial management environment.

Paper P1
• Corporate governance comparison of approaches – public v private sector.
• Conflict of interest and independence.
• Stakeholders and stakeholder claims.
• Function and importance of internal audit.
• Risk correlation and strategies for management of such risks.
• Corporate codes of ethics critique and improvements.
• Tucker’s ethical decision making model.
• CSR – comparison of approach (profit and not for profit organisations).
• Integrated reporting.

Paper P2
• Q1 Groups and ethics: Q1 is so important to passing P2 that students must practice a wide range of consolidation questions. However, after a break of two sittings, it would not be a surprise to see a consolidated statement of financial position examined.
• Q2 and Q3: revenue, provisions and non-current assets held for sale.
• IAS 41 Agriculture is new to the syllabus and should be considered highly examinable.
• Some areas that have not been tested recently, or in less detail than expected, include:
– IFRS 10 and control.
– Share-based payments (IFRS 2). – Impairment (IAS 36).
– Deferred tax (IAS 12).
• Q4 – Essay-style question: integrated reporting/extant accounting standards and documents. IAS 36 Impairment of Assets or the Framework.

Paper P3
• Project management and benefits management.
• The POPIT model.
• Strategy evaluation.
• Managing strategic change and culture.
• Decision making techniques.
• Strategic analysis.

Paper P4
• Currency hedging and interest rate hedging – read the two recent articles published on the ACCA website.
• Black Scholes option pricing model.
• Business valuation, especially using the free cash flow to firm methodology.
• Cost of capital calculations (including asset and equity betas) and adjusted present value.

Paper P5
• Benchmarking.
• CSFs and KPIs.
• Modern role of management accountant.
• Rewards and evaluation of a performance management system.
• Evaluation of a performance measurement system.
• Divisional performance appraisal.
• Corporate failure.
• Performance Prism or building block.
• NFPOs.
• EMA.

Paper P6
• Corporation tax: consortium relief/overseas aspects, CFCs/anti- avoidance, pre entry capital losses and trading losses.
• Capital gains: reliefs – rollover, gift, disincorporation.
• Inheritance tax: BPR and APR/deed of variation.
• Income tax: income tax comps at marginal rates/benefits – car.
• Personal financial planning: VCT and seed EIS.
• Trusts: description and income tax aspects.
• VAT: registration/pre-registration input VAT.
• Scenarios: employed vs. self- employed/sole trader vs. company.
• Stamp duty and SDLT.

Paper P7
Core areas (as per examiner’s approach article) likely to be examined in every paper:
• Engagement planning and risk assessment (business risk and risk of material misstatement).
• Engagement procedures (or evidence).
• Ethics and professional issues.
• Completion (matters to consider/evidence on file) and engagement reporting.
• Current topics.

Subjects of recent articles:
• IAASB developments.
• Reporting on audited financial statements – significant changes proposed.
Significant topics not examined for at least 18 months:
• Understanding the entity.
• Relying on the work of others including experts.
• Review of interim FS.
• Joint audits.
• Opening balances.
• Internal audit.

Source: Kaplan and PQ Magazine