ACCA

On the
right track
PASS calls on top tutors at 7city, First Intuition, Kaplan and Marcus Evans to bring
you the topics they believe are favourites to come up in next month’s exams

WARNING: These tips come with

Fighting fit: these tips will
help get you in shape

a health warning. Do not use

these exam tips at the expense
of thorough revision
F1
7city
n Business structure, culture, ethics and corporate governance
n PEST analysis
n Porter’s Five Forces model
n Accounting and other business functions
n Internal control and fraud
n Leading and motivating staff
n Recruitment and development
n Diversity
n Appraisal

F2
7city
n Cost classification and behaviour
n Correlation and regression
n Material, labour and overhead cost
n Marginal and absorption costing
n Specific order costing
n Process costing
n Budgeting
n Variance analysis
n Short-term decision-making techniques

F3
7city
n Regulatory framework

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 ACCA

F7 candidates – focus on n Accounting conventions n Decision-making, either apply decision criteria or linear
ratio analysis, say 7city n Double-entry bookkeeping programming
n Adjustments for stock, accruals, debts and provisions
n Trial balance preparation F6
n Preparing financial statements Marcus Evans
n Personal tax admin as a sub requirement of Q1
F4 n Always worth knowing how to do corporate tax re long financial
First Intuition statements for Q2 – if you know how to deal with long financial
n Judicial precedent/interpreting statute statements you also know how to do standard annual ones or
n Consideration those less than 12 months
n Tort, auditor liability for negligent misstatement n Capital gains Q3 – company share pooling rules would be
n Articles sensible to test (to avoid testing the now out-of-date personal
n Remedies for breach of contract rules). PPR would also make sense
n Distinguishing employee from contractor n Q4 and Q5 – corporate losses and personal basis periods?
n Comparison of different business entities, incl. partnerships
and limited companies F7
n Exclusion clauses in contracts 7city
n Separate legal personality, including lifting the veil n Consolidated income statement including subsidiary and
n Directors’ duties associate
n Published financial statements and EPS
F5 n Ratio analysis
7city n Revenue recognition
n Throughput accounting n Framework
n Non-financial and/or public sector performance indicators
n Decision-making under conditions of risk and uncertainty F7
n Qualitative aspects of budgeting First Intuition
n Flexible budgeting n Consolidated income statement, goodwill,
n Activity-based costing/budgeting associate
n Variances with operating statement n Cash flow statement
n Ratios
F5 n Deferred tax
First Intuition n Long-term contracts
n ABC/throughput
n Multiple limiting factors F7
n Expected values Marcus Evans
n Types of budget n Group accounts – income statement and statement of financial
n Time series forecasting position (balance sheet)
n Labour & overhead variances n Published accounts – from trial balance
n Divisional performance n Statement of cash flows – with analysis and interpretation
n Public sector performance. n Non-current assets/impairment
n Construction contracts
F5 n Provisions
Marcus Evans n EPS
n Linear programming
n Pricing decisions F7
n Activity-based costing Kaplan
n Variances analysis (including mix & yield, planning & operational n Consolidated statement of financial position/balance
variances) sheet plus income statement/profit & loss, subsidiary
n Divisional performance and transfer pricing only, possible mid-year acquisition.
n TB to financial statements, including non-current assets/
F5 fixed assets (possible sum of digits depreciation), deferred
Kaplan taxation.
n Performance measurements with both financial and non-financial n Cashflow and related analysis report.
indicators n Impairment
n Budgeting with learning curve or ABB n Framework/statement of principles
n Variances mix and yield n Construction contracts

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 ACCA

n Not-for-profit entities (3 E’s: effectiveness, efficiency, n Risk management F8 candidates –

economy) n Hedging foreign exchange risk and interest rates and risk Marcus Evans say
management. corporate governance
F8 n Valuations may be tested
Marcus Evans n Asset and cash flow-based values.
n Audit planning n The financial management function and the
n Internal controls economic environment’s impact on it
n Substantive testing (either non-current assets, sales or payroll n Objectives in both the corporate and NFP sectors.
are due)
n Corporate governance P1
n Internal audit Section A
n Regulation and responsibilities, including ethics and the 7city
engagement Letter n Corporate governance principles and objectives
n Audit evidence, including sampling, working papers and n Stakeholder analysis
reliance on experts n Internal controls and internal audit
n Directors remuneration
F9 n Risk assessment and management
7city
n Asset replacement decision with unequal lease lives Section B
n Business valuation and the use of geared betas n Ethical theories and CSR
n Working capital management, debt factoring and EOQ with n Tucker’s 5 Question model
discounts n Professional ethics and Kohlbergs stages of moral
n DCF calculations with uncertainty and taxation development
n Single period capital rationing or lease vs buy decision n Audit committee and risk committee
n Interest rate risk and hedging techniques
P1
F9 First Intuition
First Intuition n Corporate governance – rules vs principles approach
n Economic environment (Section B) n Non-executive directors
n Investment appraisal (Section D) n Business risk – a methodical approach to identifying,
n Cost of capital (CAPM) (Section F) categorising and managing risks
n Risk management (Section H) n Stakeholders
n Professional values and ethics
F9 n Corporate social responsibility
Marcus Evans
n WACC/CAPM/risk-adjusted WACC P2
n Objectives & three decisions 7city
n Working capital – cash & Miller Orr model n Consolidated statement of income including disposals
n Interest rate management n Consolidated statement of cash flows
n NPV – standard calculation n Foreign exchange
n NPV – application – possibly asset replacement or capital n Related parties
rationing n Segmental reporting
n Sources of finance n Intangible non-current assets
n Impairment
F9 n Off-balance sheet finance
Kaplan n Share based payment
n Investment appraisal n Specialised entities (eg not-for-profit)
n NPV/IRR with tax and possibly inflation. Payback, replacement n Global harmonisation
analysis and capital rationing.
n Working capital management P2
n Receivables and payables. First Intuition
n Business finance n Group topics:
n Gearing/capital structure calculations and comment thereon. n Foreign subsidiary
n Cost of capital n Disposal
n CAPM theory, its advantages and disadvantages, and its use in n Other topics:
calculating a cost of equity and a risk-adjusted WACC. n Pensions

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Tips.indd 3 24/04/2008 08:34:25

 ACCA

P7 candidates – look out n Financial instruments P5

for audit evidence, say n Provisions Kaplan
Kaplan n Impairments n Transfer pricing
n Conceptual framework n Performance appraisal question (financial and non-financial
measures, maybe benchmarking)
P2 n Strategy – missions & objectives
Marcus Evans n Gap analysis, pest or SWOT
n Group statement of cash flows n Corporate failure (z score)
n Ethical and social responsibilities n NPV & ROCE or RI
n Intangibles n EMA
n Financial instruments
n Segment reporting P6
n Related parties Kaplan
n Current developments – harmonisation, changes to n Corporation tax including IBA, loss relief (S393A),
IAS 27 and IFRS 3 group and consortium relief, overseas
subsidiaries, group gains and VAT
P2 n Key scenarios:
Kaplan One or more of the following is likely to feature on
n Foreign entity statement of financial position/IS the exam:
(comprehensive income)/reconciliation or cashflow n CGT vs IHT for lifetime gifts
Revision of IAS 1/ethics n Employed vs self-employed (IT and NICs)
n Mixed transactional n Badges of trade (IT vs CGT)
n Financial instruments/deferred tax/actuarial gains and n Employee vs partner (IT and NICs)
losses/revaluation of assets/forex gains/losses n Extraction of funds from company: salary vs
n Segmental reporting/related party transactions/ dividend (IT, NICs, Corp. Tax)
revenue recognition n Incorporation (IT, NICs, VAT, CGT), perhaps
n Current issue with incorporation relief vs gift relief
n Harmonisation of accounting standards (IFRS and US) n Comparison of employment packages and
benefits (eg. cash vs car, share options vs
P3 bonus)
Marcus Evans n Corporation tax – disposal of business: sale of
There is always likely to be an element of analysis, choice and shares vs sale of assets
implementation in the compulsory question. n Close companies – maybe a letter on this
Specific areas to be tested on the exam may include: n VAT – cash accounting scheme, annual
n 5 Forces accounting scheme, due date for registration
n Strategy lenses /different approaches to strategic planning n Financial planning – sources of finance, lease
n Portfolio matrices (maybe public sector?) versus buy, investments including EIS vs VCT, the
n BPR Financial Services and Markets Act 2000,
n Stakeholders, ethics & culture pensions
n Change management
n Quality in information systems P7
Kaplan
P4 n Risk assessment/risk management/
Kaplan audit strategy
Section A n Audit evidence
n NPV or APV of a foreign investment project, with discussion of n Practice management – obtaining professional
political risk work/tendering
n Business valuation for a takeover, using book plus model, and n Assurance Services – prospective financial
including discussion of defence tactics and ethical issues Information/due diligence reviews
n Reporting/application of GAAP
Section B n Professional conduct & ethical issues
n Interest rate management including a recommendation
to the board
n Discussion question on stakeholder conflicts and dividend policy.
n Cost of capital and free cash flow for a valuation.

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Tips.indd 4 24/04/2008 08:34:36