Paper F5
• Target costing with learning curve.
• CVP analysis and decision tree.
• Written budgeting.
• Mix and yield, planning and operational variances.
• Non financial performance or transfer pricing.
Paper F6
• Question 1:
– Employment income including the evaluation of benefits.
– Savings income and dividend income.
– Introducing a partner into the partnership with opening year rules.
– Computing the income tax payable.
– computing national insurance.
• Q2: corporation tax computation - adjustment of a trading loss including capital allowances for plant and machinery and relief for the trading loss. VAT or maybe a separate question.
• Q3: capital gains for companies or individuals a mixed bag.
• Q4: property business income and trading losses for a sole trader. • Q5: The residency position of a number of individuals and the IHT implications of a making gifts into a trust.
Paper F7
• The 40 marks of MCQs will be mainly on the standards/published accounts, and some on interpretation/cash flows. Watch out also for brief consolidation calculations or principles.
• The 30 marker will probably be a consolidation or published accounts exercise.
• One of the 15 markers will be the topic not examined as the 30 marker.
• The second 15-marker will be a statement of cash flow/with some interpretation, or on standards.
• The well-prepared student has nothing to fear with MCQs, but the student who has not covered the breadth of the syllabus will find it difficult to pass.
Paper F8
• MCQ – likely to be a mix of knowledge and practical, so knowledge of ISAs, corporate governance etc will be important.
• Substantive testing: tangible non- current assets, trade payables,
provisions, bank and cash.
• Controls: reporting to management and tests of controls on purchases (including asset purchases), bank and cash.
• Planning: audit risk and response, with ratios.
• Ethics: threats to objectivity, confidentiality.
• Finalisation/reports: subsequent events, other Information.
• Internal audit: reliance by external auditors (ISA 610).
• Other: roles of audit committees, CAATS, levels of assurance, ISA 240, 250, 260, 402.
Paper F9
• Investment appraisals: calculation of NPV. Discussion question on risk and uncertainty (example: sensitivity analysis and probability distribution).
• Working capital management: quantity discount (EOQ) or factoring calculations. Discussion of working capital financing and/or investment policies.
• Cost of capital: WACC – calculating cost of equity using CAPM or dividend valuation model, cost of redeemable debt and bank loan/preference shares. Discussion of circumstances under which WACC can be used.
• Business valuation: valuation of equity using; DVM, P/E ratio and asset basis. Explanation of weak/semi-strong and strong form of efficient market.
• Sources of finance: the effect of different financing options on key ratios like EPS, debt/equity ratio and interest cover, including calculation of TERP. Discussion of factors to consider in raising short/long-term capital or equity/debt capital.
• Risk management: hedging currency risk using forward contract and money market hedge. Using purchasing power parity and interest rate parity theories to estimate future spot rate and forward rate respectively.
• Dividend policy: factors to consider in formulating dividend policy or the effect of a change in dividend policy on share price.
Paper P1
• Governance:
– Role of Board.
– Unitary/two tier.
– Chair role/CEO chair split.
– Induction/performance appraisal. – Reward systems.
– Family based structure.
– Global standards in governance.
- Stakeholder classifications.
• Control:
– Objectives of a sound system.
– COSO failures.
– Reasons for internal audit.
– Internal control disclosure.
• Risk management:
– Risk committee or risk manager. – Strategic/op/static and dynamic risk.
– Risk diversification.
– ALARP.
• Ethics:
– Absolute/relative, consequential. – Grey, Owen and Adams.
– Professionalism.
– AAA model or Tucker.
Paper P2
• Q1: consolidated position statement with adjustments.
• Q2 and Q3: two mix questions with a host of issues including maybe revenue, pensions and financial instruments.
• Q4: current issues of integrated reporting or transparency or equity accounting or maybe SMEs.
Paper P3
• External analysis.
• Strategic choice.
• Corporate social responsibility/ integrated reporting.
• Marginal costing for decision- making.
• Improving business processes.
• Project teams.
• POPIT approach to change management.
Paper P4
• Hedging exchange rate and interest rate risk using futures, options and swaps.
• Option pricing theory. Real options, example, option to abandon, expand and delay. Valuation of company using the Black-Schole option pricing model. • Investment appraisal using adjusted present values/net present values or modified internal rate of return.
• Cost of capital using the principles of Modigliani and Miller prepositions or geared and ungeared bias.
• Mergers and acquisitions – valuation using free cash flows, defensive tactics/regulations of takeovers and cash offer or share exchange.
• Capital reconstruction schemes - designing a capital reconstruction scheme or assessing the success of a given scheme.
Paper P5
• Corporate failure.
• Environmental management accounting.
• Human resources management, including reward systems.
• Quality:
– TQM, Kaizen, JIT and target costing.
– Quality related costs.
– Six Sigma.
• Transfer pricing.
• Performance Measurement
Systems:
– The balanced scorecard.
– The building blocks model.
– The performance prism.
– The BCG matrix.
• Benchmarking.
Paper P6
• IHT with the death estate.
• Changing the will after a person is dead, using a deed of variation to apply the reduced rate of IHT when a charitable legacy is made.
• Company selling shares and the substantial share exemption or a company selling its trade and assets.
• Research and development expenditure for large companies.
• Controlled foreign companies.
• Badges of trade, partnership with a partner joining/leaving with opening year rules, choice of accounting date, conditions to change the accounting date.
• Trading losses at the beginning or middle of the trading cycle maybe in a partnership.
• Personal pension schemes.
• Capital gains tax including entrepreneurs’ relief, shares matching rules.
• Opting to tax a building, electronic filing of the VAT return.
• The capital goods scheme.
Paper P7
• Business risk and risk of material misstatement.
• KPIs and evidence to audit/review them for social/environmental and public sector operational.
• Forensic audit.
• Matters and evidence – IAS 10, 11, 12, 23, 36, 37, 38, IFRS 2, 5. • Ethics and professional issues – threats to objectivity.
• Practice management – advertising, tendering.
• Finalisation and report – subsequent events, other information.
• Current issues – ISA 610, new format audit report/extending the auditor’s role.
Source: LSBF / PQ Magazine