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ACCA December Exam Tips
23 November 2016
BPPís December 2016 Exam Tips
Section A & B
* Expect the unexpected.
* The promise is these will cover the whole syllabus.
*There is no official reading time now, but you need to plan your answers to section C before you start writing.
* Make sure you make reference to the scenario in your answers.
* Planning & operational variances.
* Mix and yield variances.
* Evaluation of the company performance: either as a whole, or on a divisional basis.
* A wide range of topics, but you can expect a couple of OTs to be devoted to the administration of income tax and corporation tax.
* Due dates for payment of income tax: including payments on account.
* Due dates for payment of corporation tax: including installments for large companies.
* Filling 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 the SME schemes relating to cash accounting, annual accounting and flat-rate schemes.
* Inheritance tax die on lifetime transfers both in the donorís life and on death.
* Statutory residence tests for individuals.
* Identification of groups of companies and sole traders.
* Trading loss reliefs for both companies and sole traders.
* Think Section A topics with a longer scenario!
* The two longest form questions will focus on income tax an corporation tax. They are likely to include:
- Employment benefits.
- Property income.
- Relief for pension contributions.
- Adjustments to profit to arrive at trading income for both companies and sole traders Ė in past sitting we have seen a number of questions whereby you have to correct errors in computations included in the scenario.
- Capital allowance computations.
* 10 marker on VAT, inheritance tax or capital gains tax.
* Consolidation & interpretation of financial statements.
* Non-core areas: inflation, specialised entities.
* Two 20-mark questions, one covering interpretations and the other preparation of financial statements.
* One question in the context of a single company and one in context of a group.
* Both questions will cover the accounting items from other areas of syllabus.
* Short separate part, with a statement of changes in equity, statements of cash flows extract, earnings per share calculation or linked written topic.
* Consolidated question could include subsidiary and associate, with adjustments, eg fair values deferred/contingent consideration, PUP on inventories/PPE, intragroup trading balances, goods/cash in transit.
* Single entity question could be prep of trail balance or restatement of given financial statements with the usual adjustments. Think depreciation, revaluation and current/deferred tax, plus a mix of adjustments on other areas, eg leases, substance over form issues, financial instruments, share issues, government grants, inventory valuation, revenue recognition or construction contracts.
* Audit planning.
* Audit risk: identification and explanation of audit risks from a scenario and explanation of the auditorís response to each risk.
* Internal audit.
* Internal controls: identification and explanation of deficiencies in internal control and the recommendation of suitable internal controls or description of tests and control.
* Audit procedures: both substantive procedures and tests of control.
Section A (donít neglect the following)
* Financial objectives: ratio analysis, the concept of shareholder wealth.
* Economic environment & financial institutions: financial intermediation, fiscal and monetary policies.
* The efficient market hypothesis.
* Working capital management.
* Risk management.
* Working capital management: receivables management & inventory management.
* Investment appraisal: NPV with inflation and tax.
* Business finance: evaluation of financing options (ratio analysis).
* Cost of capital calculations & discussion.
* Will aim to test all three main syllabus areas in section A.
* Typically four written requirements.
* Donít forget the four professional marks.
* The June 2015 exam tested content from the examinerís technical articles on corporate social responsibility strategy and strategic CSR, so be familiar with any new articles.
* Use of stakeholder, ethics and other CSR theories applied to scenarios.
* Risk and governance syllabus content: board directors, remuneration and reporting.
*Preparation statement of financial position and/or a group statement of profit of loss and other comprehensive income or statement of cash flows, which may include a foreign subsidiary, discounted activities, disposals and/or acquisitions.
* Discursive requirements on linked accounting adjustment and social/ethical/moral aspects of corporate reporting.
* Deferred tax.
* Foreign currency transactions.
* Financial instruments.
* Share-based payments.
* Non-current assets: recognition and/or impairment of tangible and intangible assets.
* Borrowing costs.
* The effect of accounting treatments on earnings per share or ratios.
* Accounting standards: accounting policies and the framework, leases, grants, IFRS for SMEs, reorganisations, provisions, events after reporting period and related parties.
* Current developments: revision of conceptual framework, leasing, improvements to disclosures, adoption and consistent application of IFRSs, equity accounting, improvements of performance measurement, classification in profit or loss vs OCI (see exam team article), integrated reporting (exam team article), revenue recognition (exam team article).
* Project appraisal: domestic and overseas, cost of capital calculations.
* Business valuations: cost of capital calculations.
* Risk management: VaR, real options, hedging.
* Risk management: currency or interest rate.
* Business reorganization.
* Real options.
* Ethics and general financing issues: dividend policy.
* Behaviour finance: new from September 2016 and the examiner has written a recent article.
* Often require a significant level of data analysis using numerical techniques: KPIs, EVA.
* Transfer pricing.
* Analysis of quality related costs.
* Performance management frameworks: building blocks, performance pyramid or balanced scorecard.
* Quality management.
* Information reporting: CSFs, KPIs.
* The application of strategic models: PEST, Porterís 5 Forces, the value chain.
* HR frameworks: reward & appraisal systems.
* Risk management.
* Environmental management accounting.
* Read recent articles: big data, integrated reporting and performance management models (BCG and 5 Forces).
* Groups of companies,: overseas aspects and losses.
* Unincorporated business: loss relief or partnership.
* CGT v IHT: availability of reliefs.
* Overseas aspects: income tax, CGT, IHT and corporation tax.
* Personal service company.
* Share schemes.
* Company purchase of own shares.
* Enterprise investment schemes/venture capital trusts.
* Change in accounting date.
* VAT: partial exemption or land and buildings or overseas transactions.
* Transfer of trade v sale of subsidiary.
* Disincorporation relief.
* Pension contributions.
* Patent box, research and development expenditure.
* Planning, risk assessment, evidence gathering and practice management.
* Expect financial statement extracts, which you will need to consider.
* Non-audit engagement, with the prospective financial information or due diligence.
* Specific question on audit completion or consolidated groups.
* Audit evidence and financial reporting issues.
* Practice management: ethics & quality control.
* Reporting: completion and communication.
* Recent examinerís articles: Corporate governance and recent changes to the auditorís report.
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