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PQmagazineNovember 2014 www.pqmagazine.co.uk / www.pqjobs.co.uk
Here they are the last ever tips for NovembersCIMA exams. Our four-page pull-out is packed
full of top advice but dont forget to revise!
Every accountancy student
needs to have their own
personal study plan that
maps out the time it will
take them to qualify, say
leading tutors.
At a recent PQ magazine
roundtable, our panel of experts
stressed the move from set dates to
flexible exam times will place a new
emphasis on accountancy studentsto manage their journey through to
qualification.
Students need to map out their
whole study plan, from the very first
exam all the way to the end.
Currently, many students just look
to complete a module or stage, say
our experts. But now they must
look at the whole picture.
And all this must be written
down. You need to create a record
that you can go back to, to ensure
you are keeping on track.
Our experts are also concerned
that many students never feel
totally ready for the exams. So if the
onus is on them to book an exam
sitting, the worry is they may
procrastinate and lengthen the time
it takes to move to the next level.
Students will have to learn to put
themselves under pressure and the
only way of doing that is by booking
the exam, was the consensus in
our discussion group.
Recent figures from the Financial
Reporting Council revealed that one
in four (28%) of PQs studying with
the six main UK accountancy
bodies are still waiting to qualify
half a decade after starting their
studies.
As we revealed in Septembers
issue, that is a whopping 140,000
students out of a total of just over
500,000 who are still not qualified
after five years. You have to ask
yourself whether it will take you thatlong. You will need to be realistic
about your own abilities here.
CIMA, which introduces exams
on demand from 1 January 2015,
has the largest percentage of
students at the five-year-plus
milestone. Some 36,576 are still
registered as studying five years
after joining up to CIMA, which is
30% of the total student
population.
The ACCA has 101,185 students
still signed up as a PQ five years
after first signing up (28%).
Read about what our panel of
experts have to say about the move
to exams on demand on page 26.
PQ magazine is the AIAs Accountancy Media of the Year winner for 2014.
At a ceremony in London earlier this month PQ magazine beat off the
challenges from Accountancy Age, The Accountant and AccountingWeb to
win the top prize. Richard Simms of FA Simms, which sponsored the award,
presented editor Graham Hambly with the prize.
Other winners on the night were Ian Ball, chair of CIPFA International and
former CEO of IFAC. LSBF's Hafeez Qazi was also awarded the prize for AIA
Accountant of the Year.
PQ magazine had a great night and, dont forget, you too could be a
winner as we are now looking for nominations for the PQ magazine Awards.
We have 15 PQ trophies up for grabs.
Turn to page 14 to find out how you too can get on the front cover of PQ!
TAKE CONTROL
OF YOUR FUTURE
PQ TRIUMPH AT AWARDS
Look what we won!
WIN!
Weve
five
limited
edition
Canon
calcula-
tors togive
away.
Turn to
page 42
Top tutors: there to help but
you need to help yourself too!
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comment PQ
News
08CIMA resit results P2 passrates plummet to just 27%
10ACCA optional papers ACCAtakes steps to tackle problems
12Boost for N Ireland Three ofthe Big 4 unveil expansion plansthat will boost the local economy
Features, etc
06Mind your Ps&Qs I need helppassing ACCA; E3 woes; and ourTwitter and LinkedIn updates
14PQ Awards 2015 Make yourCV shine get yourself(or your hero) nominatedfor a PQ award
16ACCA F4 The newchallenges Corporateand Business Lawstudents face
17P is for problem The ACCAsAlan Hatfield explains how theassociation is tackling the issueof poor P paper results
18ICAEW spotlight Valuationtechniques the examinersview; and the importance of aproper revision timetable
21Four pages of CIMA tips Atips bonanza for last time beforethe exams go on demand
26Roundtable discussion Ourpanel of experts discuss, amongother things, the move to OTs
28ACCA case studies Two reallife examples of how the AATqualification changes lives
30International standardsEquity accounting is here to stay
32CIMA pre-seen Expert adviceon how to deal with the casestudy element of the NovemberCIMA Strategic exams
34CIPFA spotlight Qualificationchanges reflect workplace needs
35Performance measurementDeveloping a sense of balance36Careers Life at PwC Cyprus;
and how to get to partner level
42Fun time Accountancy songson the web; spot the bill;and more great giveways
The columnists
Robert Bruce Corporatereporting, and why we shouldall be sceptics 8
Prem Sikka OECD proposalsrepresent a missed opportunity 10
Carl Lygo College visa fraud doesour profession no credit 12
Subscribe to PQ magazineIts FREE see page 41 or go to
www.pqmagazine.co.uk
ABC July 2013June 2014
32,361
Publishers statement: We have a
digital issue of the magazine which
is sent to 10,012 requested readers
Auto enrolment is sexy
I was very kindly asked to sit on the panel for the AIAs
Founders Lecture to discuss that sexy subject pension auto
enrolment! No it is sexy, and when you see the fines that kick-in if you
miss your staging date then youll start to be as interested as I am. That
fine is 400 plus 50 per staff member per day. So if you are helping a
micro business with three people then the fine equates to 5,000 if you
miss the date by a month! It seems that while the large firms havesuccessfully negotiated auto enrolment the big challenge is still to come.
There really does seem a need for DWP to get its message heard in
SMEs. Did you know that companies need to understand they cant opt
out until they have opted in? Employees will also have to do this via their
product provider not via their employer.
Pension enrolment affects you as an employee and accountant, and it
is something you should know about. I think sometimes PQs should be
able to show people they have practical solutions to real problems, rather
than the ability to explain the application of IFRS 9 (we are talking
financial instruments here). The discussion was followed by the AIA
awards ceremony and yee-hah! PQ magazine won the Accountancy
Media of the Year award. Can I thank everyone who voted for us. I am
not known in the office for being tech savvy but I was able to help the
AIA President turn off his phone during the debate. I know who wasringing him and you should be ashamed of yourself!
We have a great issue for you this month. We finally got our hands on
the CIMA resit results, and discovered a 27% pass rate for P2. CIMAs
Noel Tagoe has been on tour, but he phoned us the minute he got back
to the UK to explain where he thinks it all went wrong. He really does
read every exam paper and champions the idea that an average student
should be able to pass the exams. They arent just for the very bright,
and he doesnt want clever examiners showing off. He wont like it but we
have four pages of tips for the last ever set of CIMA November exams.
Graham Hambly, PQ magazine editor ([email protected])
CONTENTS November 2014
Study when itsuits you withCIMAstudy.comCIMAstudy.comis the only online learning resourcedeveloped, written and reviewed by the CIMA faculty.
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PQ Magazine Fourth floor, Central House, 142 Central Street, London EC1V 8AR | Phone: 020 7216 6444 | Email: [email protected]
Website: www.pqmagazine.co.uk | Editor/publisher: Graham Hambly [email protected] | Advertising manager: Polly Thrasivoulou [email protected]
Associate editor:Adam Riches | Art editor: Tim Parker | Subscriptions: [email protected] | Contributors: Robert Bruce, Prem Sikka, Carl Lygo,
Tony Kelly, Phil Gammon, Jo Daley | Origination and print services by Classified Central Media
If you have any problems with delivery, or if you want to change your delivery address, please email [email protected]
Published by PQ Publishing PQ Publishing 2014
I need some helpI am an ACCA finalist who has
taken a break from my studies
and am now keen to get themcompleted, but I am unsure of the
best way to go about this. I only
have the optional papers left but
have failed P5 three times my
marks have been in the low 40%.
I have worked overseas and
was recently offered a fairly senior
financial controller role, but I
declined as my top priority is to
pass the optional papers.
I am contemplating
studying full time for P5
and Advanced Tax. I am
even thinking about
switching to CIMA with
exemptions I would have just five
exams to sit and I can take them
on demand from January.The main advice I get from
tutors is keep trying, but I am
feeling very frustrated. I suppose
the big questions I have are: how
much will I increase my chances
by studying full time? And should
I switch to CIMA?
Name and address supplied
The editor says: Please take a
look at the increased support the
ACCA is putting into place for P5
(see page 17). There are going to
be a lot more resources available
to options sitters this December.
The writer of the star letter each month wins a fantastic I PQ mug!
Hot & TweetThe FTSE 100
companies are
upping their gameon Twitter, says social media
agency Battenhall. They sent
out a total of 1.4m tweets in
the past year, nearly three
times the number they sent in
the previous year. Remember,
the US SEC now allows firms to
use social media to announce
important information.
So, who is doing well?
Burberry has added a million
followers in just 12 months.
Other fast-growers in the
corporate world are ITV andRolls-Royce.
We were, as usual, the only
magazine at the ACCA AGM
and tweeting about it. The AGM
also doubles up with our yearly
get together with top columnist
Professor Prem Sikka. It was
Prem who brought it to
everyones attention that one
newly appointed ACCA council
member, Nur Jazlan, could be
in trouble. Apparently his
election was announced before
being voted in at the AGM!
Prem had the
evidence to
prove it too
We also
rolled along to
the FRCs
annual open
meeting this
month. CEO Stephen Haddrill
stressed the importance of the
work the council has been
doing on the UK Corporate
Governance Code. The three
things he wanted the audience
to concentrate on in the newreport were the onus on the
long-term health of the
company, provisions on
clawback, and the need for a
company to explain a
significant, if not majority, vote
against the remuneration
packages of directors. The big
story here was the move to
Viability Statements in a
companys report to investors.
Follow us @PQmagazine
email [email protected]
I cant get past E3Im really struggling with E3. The
problem is that I am taking too long
on Q1. I know that there is a lot of
great advice out there on how to
approach the exam, but my mind
just goes to mush in the exam hall
stress I suppose! One problem is
that the scenarios seem too long,
they took ages to analyse.
Interpreting what the examiner
wants becomes part of the test
itself, which cant be right.
The latest resit also had a 22
marker on ratios, which was tough,
so I am not confident of the result.
If I fail this then I have just one
more chance in November!
Name and address supplied
The editor says: This was one of
several complaints we received
about E3. The resit pass rate was
just 40% in September. That was
good when compared with the P2
resit result that was a scary 27%.
The Tesco
accounting
debacle was a
recent discussion
topic on CIMAs
pages. One contributor
questioned whether three
decades of uninterrupted
service provided by PwC
as auditors had made them
complacent about some of
the fundamental accounting
principles. One CIMA qualified also
wondered if they still taught income
recognition and cost deferment in
the ACA exams. It was suggested
that the head of the
ICAEW may need to
check that the
syllabus is still fit for
purpose and special
attention had to be
paid to what PwC trainees are being
taught. Clearly, the inference is that
this lack of knowledge doesnt
apply to CIMA PQs!
While we are talking about
LinkedIn, when was the last time
you updated your page? It is really
important to keep your LinkedIn
profile up-to-date it is your online
CV! We know our editor has already
added PQs award for Accountancy
Media of the Year presented at the
recent AIA Awards!
8/10/2019 Pq November acca
7/44
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8/10/2019 Pq November acca
8/448 PQ Magazine November 2014
PQ news
1,000 to 1 shot
Getting a change to your
ACCA exam result through an
administrative review is currently a
1000 to 1 shot. In all,
there were 966
administrative reviews
following the June
exam. A total of four
errors were confirmed.
While three of these
remained a fail just one
resulted in a pass. The ACCA has
also confirmed that none of the 46
appeal cases were successful.
Chocolate heaven
CIMAs pre-seen for the
November Strategic exams has
now hit the streets. The big advice
from BPPs head of
CIMA, Steve
Malpass, is dont
spend too long
trying to find a real-
life company that
mirrors the case.
This time around
Y plc looks a bit like Thorntons!
See page 32 for his full advice on
how to use the pre-seen.
The DNA of a partner
Do you have a can-do
attitude? If you want to climb the
career ladder to partner then this
is seen as the top characteristic by
those who have made it. Top
recruitment firm Hays has just
released the findings of its report
DNA of a Partner. Interestingly, its
research discovered that you
could make it to the top quicker if
you trained with a regional
independent rather than with a
Big 4 firm. Karen Young of Hays
discusses the findings on page 35.
In brief
Big changes aheadfor CIPFA studentsCIPFA has unveiled its new-look
professional qualification, which
becomes fully operational from 2016.
The changes reflect the changingpublic services environment and will
increase the focus on the wide range
of commercial skills needed by UK
public finance professionals. The
institute also wants to deliver greater
portability between the public and
private sectors.
AATs will be pleased to hear that
they should have a smoother route to
become a CIPFA PQ.
The E&T department is also using
the new syllabus to introduce e-
assessment and more blended and
online learning options for PQs.
For current PQs exemptions from
new syllabus modules will be granted
on like-for-like basis. So, for example,
if you have passed Financial
Accounting you will be granted a
transitional exemption from FinancialAccounting in the new syllabus.
Among the other key changes is a
move to reduce the case study exam
from a full day to half a day from
June 2016. A qualification time
limited of 10 years will also be
imposed.
CIPFA has promised lots of
specimen exam papers in all the new
papers.
Students commencing CIPFA at
the Certificate level in 2015 will be
able to join the new scheme a little
bit early, the institute has confirmed.
See page 34 for more details on
the proposals.
CIMA RESIT PASS RATES
SEPT 14 MAR 14 SEPT 13 MAR 13 SEPT 12
P1 Performance Operations 51% 53% 52% 58% 42%
E1 Enterprise Operations 63% 69% 68% 62% 88%
F1 Financial Operations 61% 71% 57% 71% 54%
P2 Performance Management 27% 67% 45% 44% 51%
E2 Enterprise Management 58% 63% 65% 55% 59%
F2 Financial Management 52% 52% 26% 51% 53%
P3 Performance Strategy 58% 58% 56% 56% 56%
E3 Enterprise Strategy 40% 50% 56% 48% 40%
F3 Financial Strategy 56% 50% 55% 52% 55%
T4 Part B case study exam 57% 65% 66% 54% 48%
It is often said, and quite rightly, that
auditors need to ensure that a highlevel of scepticism is maintained at
all times. But the same level of
scrutiny needs to be maintained by
many other participants in thebusiness of corporate reporting.
Take the Tesco case. It involved
payments that suppliers pay to ensure
that, for example, their products areon a more attractive display than their
competitors, and so on. Payments
vary, involve complicated things likerebates, and require a fair amount of
estimates about the final outcome
when you are taking a view, as here,
at the half-year mark. And they could,as appears in this case, go askew.
Instantly the call goes up: where
were the auditors? The answer, if you
look at the annual report, is that theyknew that problems could arise and
they flagged it up. Auditors can now
do this far more easily under the newaudit report regime that requires more
explanation and discussion. So the
auditors talked about the difficulties
of revenue recognition in such areas.
They warned of the judgmentrequired, of the risk of manipulation,
and talked carefully about the
potential problem. And this was waybefore the half-year figures in which
the overstatement was revealed.
There should have been no surprise.
This theme recurs down the years.The manipulation of the figures in the
Enron scandal was all detectable
deep within the notes to the accountsif any expert had cared to look.
It is not just auditors who need to
be more sceptical. Analysts and, dare
we say it, journalists could do more.
ROBERTBRUCE
Its up to allof us to besceptical
Robert Bruce is anaward-winning writer onaccountancy for The Times
P2 resit pass rate slumps
Helen Brand, centre, at the AGM
PQmagazineEXCLUSIVE
Two papers stand out in the latestCIMA resit results P2 and E3.
While the P2 pass rate plummeted
to an all-time low, just 27%, the E3
pass rate fell to 40% this time.
CIMAs executive director of
education, Noel Tagoe, said the
pass rate had come as a surprise.
The pass rate for March 2014 was
67%, and he admitted he thought
CIMA had turned the table in this
paper. He admits that he was
wrong. His concern is that students
are not properly prepared for the
resit. They have to put in as muchwork as they would for a main
sitting, he stressed.
Turning to the 40% pass rate in
E3, Tagoe promised to look more
deeply into the reasons behind the
drop in the number of PQs passing.
He told PQ magazine that he
personally looks at all of the exampapers to ensure they fulfill the
brief. He particularly checks the
language to ensure they can be
understood no matter where the
exams are being taken. These are
not, he assured us, exams that only
bright people can pass. The
average student should be able towrite an answer to one of our
exams and pass.
ACCA AGMPLEDGE TOIMPROVECEO Helen Brand told the 109th
AGM that the ACCA has introduced
a range of measures to improve
quality and speed of its customer
services. Some 83% of emails are
now answered in one day and 90%
of student registrations are
processed in three working days.
She did, however, admit that UK
members and students seem fed
up with too much email
communication. Nearly a third
wanted less. The ACCA has listened
and is now sending more targeted
emails.
One member asked for the
re-instatement of graduation
ceremonies. Brand explained that
these have been switched to
member celebrations, which she
said were working well.
8/10/2019 Pq November acca
9/44
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8/10/2019 Pq November acca
10/4410 PQ Magazine November 2014
PQ news
The ACCA has begun to scope out
a whole series of initiatives aimed at
helping students through the tricky
optional papers.ACCA Director Learning, Alan
Hatfield, told PQ magazine that it
will be interviewing students who
passed P4, P5, P6 or P7, but only
at their second attempt! ACCA
believes understanding what they
did differently might give current
students a real insight into what
they need to do to get a pass in
these papers. He has promised that
these interviews will then be made
available to PQ magazine to
disseminate.
A pilot online webinar was alsolaunched at the end of September.
This gave general advice on how to
study for the P papers. If feedback
is positive and we have no reason
to believe it will be otherwise then
more webinars will be rolled out for
each of the optional papers. We will
be pushing for these to be made
available before the December
sitting revision phase.
The 29% June pass rate for P5
was a real disappointment for the
ACCA. The P5 technical advisor
has now recorded a video giving
advice on how to achieve success
in the paper. A video on P4 is alsobeing record to support the
December exams.
Finally, ACCA is using a
programme of Facebook Q&A
sessions, which will focus on the
options in the run up to the
Christmas exams. These will last
about an hour and provide students
with instant feedback.
See page 17 for more on this.
ACCA TACKLING THEOPTIONAL PROBLEM
Gut feeling
Business
leaders are
taking major
strategic
decisions about
the future of their business based
on their gut instinct and
experience in preference to the
use of data and analytics,
according to a new report
published by PwC and written by
the Economist Intelligence Unit.
The report, Guts & Gigabytes,
explores the changing nature of
corporate decision-making and
the use of data by companies
across the globe. What is telling is
the influence of negative past
experiences. British executives
reveal greater scepticism about
the value of data analysis
compared with their counterparts
overseas. Some 61% say that
relying on data analysis has been
detrimental to their business in
the past, compared with 34% in
Western Europe and 46% globally.
Partner profit up at EY
EY UK has had another good year.
Revenues are up 8.6% and the
average distributable profit per
partner has increased by 11.7%
to a healthy 727,000. EY
chairman Steve
Varley explained
that the firm was
investing heavily
outside of London,
including a
650,000 investment in a new
technology hub based in
Manchester.
Get on the property ladder
KPMG has reportedly joined
forces with Clydesdale and
Yorkshire banks to give its
employees the chance to get on
the London property ladder. The
Big 4 firm unveiled the
initiative to staff in mid-
September and is part of a
private banking package.
UK chairman, Simon
Collins, said: Owning a
home is fast becoming a fairytale
for all but societys wealthiest. We
are working hard to raise the issue
with policy makers and clients,
but we also want to make a
tangible difference to our staff
who also face this problem.
The Financial Reporting Council
(FRC) has confirmed that boards
must include a viability statement
in their strategic report to investors.
This, says the FRC, will provide animproved and broader assessment
of long-term solvency and liquidity.
It is expected that this statement
will have to look forward
significantly longer than 12 months.
Changes here will focus companies
on aligning reward with the
sustained creation of value.
The updated version of the UK
Corporate Governance Code (the
Code) has also been changed in
relation to remuneration. Boards of
listed companies will now need to
ensure executive remuneration isdesigned to promote the long-term
success of the company and
demonstrate how this is being
achieved more clearly to
shareholders. The FRCs Stephen
Haddrill said the Code will continue
to operate on the principle of
comply and explain, which has
served investors and the corporate
sector well for over 20 years.
Viability keyto long term
With the EU losing around 1 trillion a
year due to tax avoidance and
evasion, the OECD has recommended
sharpening of transfer pricing rules,
possibly restricting tax relief on
intragroup royalty and interest
payments. The corporate tax system is
the outcome of some 3,000 treaties
and the OECD wants to see reforms so
firms cant manufacture transactions
purely with a view to generating tax
credits twice.
The OECD has also recommendedcountry-by-country reporting (CBCR).
This would require multinationals to
disclose capital, revenues, profits,
taxes and employees for each country
in which they operate, which can
highlight profit shifting. However, the
OECD limits the availability of CBCR to
tax authorities only.
These proposals do not address the
fundamental faultlines. In a world of
global monopolies, independent arms
length prices are difficult to ascertain.
So transfer pricing disputes will
remain. The tax system regards each
company subsidiary as an independenttaxable entity rather than part of an
integrated group. Thus, HSBCs 500
subsidiaries are taxed separately,
leaving plenty of room for tax
arbitrage. An alternative system,
known as unitary taxation, would base
tax on consolidated profits,
apportioned to each country according
to sales and other factors. All
intragroup profits/losses are negated
and profit shifting can be checked. But
big corporations oppose this and the
OECD has danced to their tune.
PREMSIKKA
OECDproposalsare a missedopportunity
Prem Sikka is professor
of accountancy at the
University of Essex
Hatfield:
talking
to PQs
RAP FOR AAT STUDENTSThe AAT disciplinary team has been busy recently.Among those disciplined are Emma Way, who gainednational notoriety for being convicted of
driving offences after tweeting about a
collision with a cyclist. She has been
found guilty of misconduct by the AAT
and has been reprimanded.
George Gray, who has been convicted
of rape while a student member, has by
consent had his student membership
withdrawn.
Student membership has been
withdrawn for 15 months from Thato
Dihutso after it was found she took a
computer-based assessment for another student.
Thobile Nxumalo was found guilty of having
unauthorised material in her possession while sitting an
assessment. She was severely reprimanded
and debarred from sitting assessments for
six months, and fined 50.
Nomfundo Dlamini was found guilty of
possessing unauthorised material while
sitting an assessment. She also assisted/
encouraged another AAT student to breach
codes by preparing crib notes with them.
She has been severely reprimanded and
fined 50.
Finally, student Monametsi Die took an
exam for another student. He was severely
reprimanded and fined 50.
Emma Way
8/10/2019 Pq November acca
11/44
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8/10/2019 Pq November acca
12/4412 PQ Magazine November 2014
PQ news
In June, the Home Office announced a
further tightening of the rules relating
to the issue of student visas, and
suspended 57 private colleges and
three public universities from being
able to issue visas to international
students. Home Office minister James
Brokenshire said: We have already
removed some 750 bogus colleges
from the list of those entitled to bring
foreign students to Britain. Many of
the private colleges are providers of
full-time ACCA courses and so readersof PQ magazine will have an interest
in these developments. The latest
crackdown was prompted by
undercover reporting on the BBCs
Panorama, aired in February. They
secretly filmed English language
testing for the TOEIC (Test Of English
for International Communication)
exams run by an organisation called
ETS. They appeared to find answers
being read out to students by
invigilators cheating. The Home
Office launched a detailed and wide-
ranging investigation into actions by
organised criminals to falsify Englishlanguage tests for student visa
applicants. It found that over 30,000
TOEIC certificates have been falsified
and 19,000 others are questionable.
Colleges and universities have
admitted students relying on these
falsified TOEIC certificates and the
Home Office crackdown relates to
whether private colleges and
universities have abused their highly
trusted status. Cheating, falsifying
certificates and working in breach of
immigration rules are not compatible
with the professional ethics of
accountancy. Some colleges and
universities are now no longer
suspended but you should check with
your provider if you have any doubts.
CARLLYGO
Visa frauddoes theprofessionno credit
Professor Carl Lygo is
chief executive of BPP
Cant read it!
IRISH EYES SMILING
CIFPA win
CIPFA has won
the contract with the
NHS Leadership
Academy to be the
exclusive provider of
tuition services for
the finance
management stream
of the NHS
Graduate Scheme.
The contract has just started
and will initially run for two
years, with graduates on the
scheme expected to become
fully qualified CIPFA
accountants as part of their
training.
F4 a fairer test
The new-look F4 means
the well-prepared candidates
should get the result they deserve,
says Kaplans Sue Tuffnell. She felt
the exam will be more balanced
and less of a lottery regarding
which topics appear on the paper.
Find out how to prepare for the
new test on page 16.
Final audit changes
The Competition & Markets
Authority has published its final
order, putting into action major
changes in the audit market.
These include the requirement for
FTSE 350 companies to put their
statutory audit engagement out to
tender at least every 10 years.
There are also measures to
strengthen the accountability of the
external auditor to the Audit
Committee and reduce the
influence of management.
Inbrief
Illegible handwriting and poor
layout of answers is still a
common issue in many ACCApapers, according to the latest
batch of examiners reports
The F5 examiner highlighted
this as a big
problem in
June. The F7
also revealed
many markers
are struggling
to read
students
answers. Meanwhile, the F8
examiner wondered why
candidates are not using
columns for questions when
this would have helped to
maximise marks.
The P4 examiner reminded
PQs that legible, well-presented
and well-structured answers
often get high marks. Good,
clear handwriting is essential,
says the latest report. Poorpresentation and illegible
handwriting also got a mention
in the P7 examiners report.
Another worry
is the fact that
many candidates
seem to be
avoiding the
ethics elements
in the exams.
The P2 examiner
especially felt in many ways
this was worrying as it would
be hoped at this level of exam
that candidates would be able
to discuss an ethical scenario
in some detail. It was stressed
that additional marks can be
easily gained for well-argued,
ethically-based answers.
Mental healthissues top listThis summer, for the first time, mental health
topped the list of reasons for enquiries madeby chartered accountants and their families
to the Chartered Accountants' Benevolent
Association (CABA) .
Employment usually heads the list of
issues presented by members, but these
were pushed into second place.
The most common mental health issue
recorded by CABA during 2014 is stress,
followed by depression, bereavement and
relationship issues. CABA's Kelly Feehan
said: These statistics should not be taken
as a direct indication that mental health is
becoming an increasing issue among
accountants. We have little or no evidence
that this is the case. She said the figuresshow that when it comes to mental health
accountants are just like anyone else. She
went on: When they come under pressure,
as they often do at work as part of their
profession, they can develop problems.
Northern Ireland must be the place
to be if the investment of three of
the Big 4 firms is anything to go by.
PwC is to create 800 new jobs in
a 40m investment in Northern
Ireland. This includes thedevelopment and delivery of cloud-
based management information
services and social project
management teams delivering
support worldwide to the firms
clients.
The jobs are aimed primarily at
graduates and follow an already
successful expansion of PwC
activities, through which the firm
has created over 300 jobs in the
past two years.
PwC top man Ian Powell said the
announcement reinforces PwCsstrategy to develop innovative client
services that draw on the strength
of the UKs skilled workforce.
Deloitte also recently announced
that it will be investing more than
30m in the next five years,
creating another 338 jobs across a
range of services. Its phase 2,
launched recently by First Minister
Peter Robinson, will deliver 338
jobs by 2019, in addition to the177 posts announced last year (for
phase 1).
When complete, Deloitte
estimates the 338 jobs will inject a
massive 11.4m annually in
salaries into the local economy and
bring the total number of people
employed by Deloitte in Northern
Ireland to more than 700.
Back in May, PQ revealed EY
was creating 486 jobs in Belfast.
Half of these jobs will be inmanagement consultancy and most
of the remainder in other functions,
such as auditing. The firm already
employs 1,500 people in both
Northern Ireland and the Republic.
Stormonts ministerial executive
has confirmed it will be contributing
19m a year in direct salaries once
all the roles are filled.
Mike McKerr of EY Ireland said:
We are delighted to bring this
investment to Belfast, which will
further enhance our current service
offering to clients. He confirmedthat since July 2013, EY has added
180 people to its payroll across the
Republic and Northern Ireland.
The big question then: KPMG,
what are your plans for the
province?
Changing fortunes: investmentwill boost Belfasts economy
8/10/2019 Pq November acca
13/44
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8/10/2019 Pq November acca
14/44PQ Magazine November 201414
PQ Awards 2015
ITS TIME TO GET
NOMINATING
So, a new lush awards venue has been
booked for early next year the Caf de
Paris. All we need now are the stars to fill
this top London Venue on Tuesday 10 February
for the PQ Magazine awards 2015.
How do you guarantee your ticket to the top
awards ceremony around? Well, it helps to get
on one of the shortlists! But, as we say, every
year you cant win an award unless you enter
sad to say, some people are still surprised when
we tell them that.We have some great new sponsors this year in
the shape of the ACCA, CIMA, CIPFA and
ICAEW to name just four big ones. They know
just how good these awards are and wanted to
get involved. And, of course, a big thank you
goes to our regular supporters!
There must be someone you know who really
deserves one of our PQs. It could be you and
your colleagues as our Accountancy Team of
the Year, enjoying the dizzy lights of London
and dont forget to nominate your training
manager, you could make a friend for life!
Nominating couldnt be any easier all we
want is 250 words, plus any supporting
evidence, as to why your nominee should win.
Dont forget, you can enter yourself it shows
initiative, we think.
You can download an application form fromour website just click on the pq awards bar.
Or you can email your entry direct to
Finally, you can send your entry to: the Editor,
PQ magazine, 4th floor, Central House, 142
Central Street, London EC1V 8AR. This years
deadline is Friday 19 December. PQ
We have begun the search for the winners of 16 PQ awards the best
awards around! You too can make your CV shine with a PQ shortlisting
CATEGORIES
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Winning an award will get you
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Students Chris Vickers and Sanam Razaq,
from the MMU Accounting and Finance and
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award for Best Student Society
Quick Learning AAT student Donna Smith, who
won our Distance Learning Student of the Year
award, got star billing in Accounting Technician
The accountancy team and students at
Birmingham Metropolitan College celebrated after
winning our College of the Year Public Sector
8/10/2019 Pq November acca
15/44
December 2014 Exam
Revision Classes willcommence on
Saturday 8th November 2014
Lecture Timings:9:30am to 4:30pm
Quality, Affordability, Employability
LCA Business School London, 19 Charterhouse Street, London EC1N 6RA
Tel: 020 7400 6772 enrol with us on-linewww.lca.anglia.ac.uk
OUR
REVISIONC
OURSE
S Exam focused course
ACCA - Revision Kit
Practice Questions
Advice on Exam Techniques
Past Exam Evaluation
Emphasis on Key Topics
P1 Rev
P1 Rev
F7-F9 P1-P3 P5-P7F4-F6
F4 Rev
F4 Rev
F6 Rev
F6 Rev
F5 Rev
F5 Rev
F7 Rev
F7 Rev
F9 Rev
F9 Rev
F8 Rev
F8 Rev
P3 Rev
P3 Rev
P2 Rev
P2 Rev
P7 Rev
P7 Rev
P5 Rev
P5 Rev
P6 Rev
P6 Rev
DateDay
Saturday
Saturday
Saturday
Sunday
Sunday
Sunday
08 November 2014
15 November 2014
22 November 2014
09 November 2014
16 November 2014
23 November 2014
Saturday
Sunday
29 November 2014
30 November 2014
8/10/2019 Pq November acca
16/44
Pass rate: 45% (December 2013)
Technical difficulty: 3/10
Weighting of calculations: 0%
Weighting of discursive
elements: 100%
Exam technique: 4/10
The syllabus .
The F4 exam changes format dramatically from
November 2014. Students will have a choice as
to whether to sit a computer based exam or a
paper based exam.
Format of computer based exam
The examination consists of:
Section A
25 x 2 mark objective test questions.
20 x 1 mark objective test questions.
Section B
5 x 6 mark multi task questions.
All questions are compulsory. Duration is two
hours.
Question description
Section A: The two-mark objective questions will
give the candidate four alternative answers.Candidates will be expected to usually give one
correct answer, although sometimes it may be
two depending upon the nature of the question
asked. Some of the questions will be simply
identifying the correct legal principle and some
will require application of a legal principle and
may be based on a well-known case.
The one-mark objective questions will give the
candidate three alternative answers. Candidates
will have to give one correct answer.
Section B: The multi task questions will usually
be scenario-based questions, and may be based
on relevant important cases. Candidates will be
expected to apply their knowledge to give the
correct answers from the different alternatives
given. A minimum of three different questions
may be asked on each scenario. Due to the
nature of the multi task questions it is unlikely
that there will be questions on the English legal
system.
Format of paper based exam
The examination is in the same format as the
computer based exam. The difference is that the
Section B multi task questions require the
candidate to write short essays as their answer.
Candidates will be asked questions on the
scenario and have to apply the law to the
scenario. There may be 2 or 3 parts to each
question.
Syllabus content
The content of the syllabus for both formats is
exactly the same. The main syllabus areas are:
The English legal system
This covers:
The civil and criminal courts.
The different sources of English law.
The Law of ObligationsThis covers:
The formation of contracts.
The content of contracts.
Breach of contract and remedies.
The law of torts and professional negligence.
Employment law
This aspect of the syllabus covers:
The contract of employment.
Dismissal and redundancy.
The Formation and Constitution of business
organisations
This deals with:
Agency.
Partnerships.
Corporations and legal personality.
The formation and constitution of the
company.
Capital and financing of companies
This includes:
Share capital.
Loan capital.
Capital maintenance and dividend law.
Management, administration and the regulation
of companies
This includes:
Company directors.
Other company officers.
Company meetings and resolutions.
Insolvency law
This deals with:
Different types of liquidations.
Administrations.
Corporate fraudulent and criminal behaviour
This includes:
Insider dealing.
Money laundering.
Fraudulent and wrongful trading.
Content of new syllabus v old syllabusThere are no additions to the new syllabus from
the old syllabus. The examiner has removed
corporate governance and the structure and
operation of tribunals. There is less emphasis on
human rights.
Sitting the F4 exam .
Previously, students were required to learn a lot
of information which had to be reproduced when
answering questions. Reference was required to
the most important cases and statutes.
Candidates used to be able to do some
question spotting, which enabled them to miss
out certain areas of the syllabus.
The new format does not require rote learning
of definitions, etc, but candidates will need to
study the whole syllabus. The use of a large
number of multiple-choice questions allows the
ACCA to exam every area of the syllabus even
the most fringe areas. The scenario questions
require not only knowledge of the law, but
understanding of it to apply it correctly.
This means that there is no escaping the need
for more knowledge of the whole of the syllabus
in order to score well. Do not fall into that the
trap that as it is mainly multiple choice questions
the paper is very easy to pass.
However, a well-prepared candidate should
feel more confident about achieving the result
they deserve as the exam will be more balanced
and less of a lottery regarding which topics
appear on the paper.
Sue Tuffnell is the F4 Content Specialist at
Kaplan Financial
PQ
16
PQ ACCA F4 paper
PQ Magazine November 2014
Sue Tuffnell explains the changes
PQs will face in the all-new F4
Corporate and Business Law paper
BE A LEGAL EAGLE
8/10/2019 Pq November acca
17/44PQ Magazine November 2014 17
ACCA exams PQ
H
ow, PQ magazine asked the ACCAs
Alan Hatfield, was he going to deliveron his promise after the last set of
exam results to provide students with additional
learning support, focusing on the optional
papers?
He explained that ACCA is currently working
on a number of initiatives or scoping others out,
but he wanted to reiterate that it is championing
a flexible approach to help its students success.
Employers want greater flexibility so that
students are aligned to business needs and not
exam timetables, Hatfield stressed. He went on:
As a result we will be introducing additional
exam sessions giving students the opportunity to
sit exams four times a year. Unlike otherprofessional bodies, our exam sessions will be
available to all students and not just re-sits.
Hatfield believes the changes will mean that
students and the organisations that support
them will be able to choose the pace at which
they progress through the qualification, while
also having the flexibility to make decisions
based on work and personal commitments.
Responding to calls to avoid big bang changes,
the ACCA starts the first phase with an exam
session in September 2015 in some key
markets. Then from 2016, all ACCA students will
be able to take exams in March, June,
September and December.So how is he going to help those striving for
success in the optional papers? Hatfield revealed
that the ACCA is seeking feedback directly from
sitters. We are in the process of interviewing
students who failed an optional paper on their
first attempt, then passed second time, he said.
These candidates are being asked what they did
differently second time around and what advice
they can pass on to other students about the
approach they took.
Hatfield has promised that these interviews
can then be issued in a targeted way to other
students via PQ magazine and Student
Accountant. He believes that by doing this the
ACCA is tackling the reasons for failure head on
and finding ways to improve.
As PQ went to press, the ACCA was also
running an online webinar pilot, which covered
study at the professional level generally. Hatfield
said he expected high levels of engagement here
and was hoping for positive feedback. He can
then give the green light to rolling out sessions
for each of the optional exams.
Tutors from Platinum Approved Learning
Prividers (ALPs) are involved in the pilot; they
will discuss the challenges of the P level and
generally give as much advice as possible on
how to achieve success in the exams. The pilot
will be available globally, as would any further
webinars.
At the end of September, the P5 Qualification
Technical Advisor, a key member of the
examining team, recorded two videos (one for
tutors and one for students). This gives clear
advice on how to achieve success in P5. ACCA
is also planning to arrange the same for P4, to
be released in time to support the December
exams.
Finally, the ACCA is using social media. It has
put in place a programme of Facebook Q&A
sessions and is looking to focus on options in
the run up to the December sittings. The
sessions last an hour and include the ACCA
publishing team, the relevant Qualifications
Technical Adviser (QTA) and, if appropriate, a
tutor from a Platinum ALP. This will be an
interactive session where students can post
questions and ACCA replies. PQ
PQMAGAZINE
GOESGLOBALSign up for the Emagazine and read PQ magazineno matter where you are online. Go to
www.pqmagazine.co.uk and sign up for FREE today
online. Go to
Alan Hatfield, ACCA Director
Learning, wants to help students
pass. Heres what he is planning to
help them turn a fail into a passHELPING PQs
TO SUCCEED
8/10/2019 Pq November acca
18/4418 PQ Magazine November 2014
PQ ICAEW spotlight
This month the examiners look
at valuation techniques, which
crop up in the ICAEW Financial
Management exam
Things are only worth what
someone is willing to pay. When
valuing a company, both the buyer
and seller will want an estimate of its value.
In practice, both will determine a range of
values within which they can negotiate.Historically, valuation exam questions
have been with or without a present value
calculation included. Candidates should
not expect the big NPV question on every
paper. NPV questions will continue to be
set, alongside valuation questions requiring
discounting knowledge and those that do
not.
The asset based approach requires a
calculation of the balance sheet value of
the equity (= net assets), which may or
may not require revaluation, using up to
date figures (e.g. for non-current assets).
Many candidates fail to pick up the historic
net assets figures direct from the financial
information provided (with no adjustment
required), choosing instead to focus on
assets rather than assets less liabilities.
The revaluations required the substitutionof two new values to replace the historic
figures for both companies, and a
recasting of the balance sheet total for net
assets. Many candidates in March 2014
could not perform these straightforward
calculations.
Patrick Connelly outlines how you can organise your life to give yourself the best chance of getting a pass
What is it worth?
Get a diary and work out how many days
you have between now and the exam.
Transfer this to an Excel spreadsheet (I am
sure as an accountant you will enjoy this)
and then assign an activity to each day.
Write in all your existing commitments such
as holiday, work and tuition dates. You will
instantly realise how few extra days/evenings
you now have left to undertake revision.
Contact your tutor to determine the
questions that will be attempted during the
course; this will avoid repetition when
planning question practice. Ask them if they
can recommend extra questions to attempt.
ICAEW has many past exams on their
website target the 2014 exams as they will
not be in the learning materials and have the
correct syllabus content.
Question practice is key it is not efficient
to endlessly re-read the manual or make
notes. If you are entering the revision phase,
practising exam standard questions is the
most important.
Distribute the questions you are aiming to
attempt over your calendar and be realistic:
you are unlikely to do five questions when
you come in from work. Perhaps try one
question after work for three weekdays and
then five questions over the weekend.
Keeping this up over a few weeks will give
you good coverage over the entire syllabus.
Stick to the programme; there is no point
drawing up this plan and not undertaking
the question practice. If you miss a nights
revision, ensure you catch up.
Have some good, clean fun, such as
watching TV or reading a book. Spending
all night in the pub is not a good idea you
are better than that. There will be time for
non-clean fun such as the pub after the
exam.
Patrick Connolly, Kaplan Financial
PQ
Income based approachesss
Exam questions normally require
earnings, dividends or cash flow based
valuations or some combination.
The earnings technique requires two
key inputs. The first is a P/E ratio. If the
company is unquoted, sufficient data will
exist on comparable quoted companies
P/E ratios in the question data to enable
you to find a suitable P/E. If it is a quotedcompany, it will already have a P/E ratio.
A non-marketability adjustment is only
needed for the unquoted company. Many
candidates unnecessarily lower the
quoted companys P/E. For quoted
companies, a premium is usually offered
on the existing published share price,
and the P/E ratio used to value
comparable companies in recent
takeovers can be used rather than the
companys own P/E ratio.
Dividend-based valuations make use of
the dividend valuation model (DVM) or, in
a simpler form, dividend yield wheregrowth in dividends is ignored. Use the
formula sheet, particularly if you cannot
remember what the dividend yield is (put
g=0 in the DVM and you have it).
Present value of cash flows valuation
questions may be similar to project NPVs;
namely, relevant cash flow, inflation and
tax calculations may all be required or
the cash flows may be given in a
simplified form. You should understand
the technique, its weaknesses, and the
calculations. In June 2014, candidates
struggled to calculate the present value of
growing cash flows beyond the period ofcompetitive advantage, did not subtract
the value of debt to determine the value
of equity (discounting at the WACC finds
the value of debt and equity combined)
and did not add the value of short-term
investments at the end. PQ
Sorting out your ICAEW revision timetable
8/10/2019 Pq November acca
19/44
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8/10/2019 Pq November acca
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8/10/2019 Pq November acca
21/44PQ Magazine November 2014 21
CIMA exam tips PQ
BPP.
P1
Working capital management
the calculation of the cycle, the
impact of decisions on the cycle,
EOQ calculation, cash flow forecast
and compound interest calculation.
Operating statement reconciling
budgeted to actual profits including
fixed overhead variances and
possibly mix and yield calculations. NPV including tax and inflation
and/or incremental revenue and
costs.
Sensitivity calculations and yield
to maturity using the IRR.
Expected values, joint probabilities
and risk based decisions.
Decision trees requiring both
appropriate construction and
evaluation.
Activity based costing calculations
and discussion of benefits and
drawbacks.
Benefits/problems of budgeting
techniques for discursive marks.
P2
Limiting factors calculations and
discussion of shadow prices.
Pricing optimal pricing and
discussion of pricing policies.
Learning curve calculations and
impact on variances.
Budgeting impact of
participation on motivation.
Performance evaluation via
financial/non financial measures.
Transfer pricing discussion of
differing policies and their
consequences linked with NPV.
Brought forward knowledge from
P1 this can be pretty random, so
expect the unexpected.
P3
Risk management being able to
evaluate risks and discuss their
significance in the context of the
scenario (pre seen and optional).
Corporate governance (but not
always in a profit-making context)
and its role as a form of
organisational control, including
identifying weaknesses and
recommending improvements.
Controls (especially organisational,
HR and management accounting so dont forget what youve learned
in P1 and P2!).
Internal audit especially as a
form of control and when being
used for specific internal control
purposes (such as fraud
investigations or value-for-money
projects).
Financial risk (including hedging
controls and economic risk in the
context of transnational
organisations exposed to multi-
jurisdictional currency risk you
must be prepared to discuss these
risks as well as perform the
necessary calculations).
IT/IS systems in specific
organisations for specific purposes
recent examples have included
supermarket customer data
analysis, transport route revenue
analysis and online vacation
booking systems.
E1
The political, social and economic
context explaining how a business
relates to the national and
international environment it finds
itself in.
Operations management
explaining how an organisations
relationship with suppliers has
developed (e.g. TQM, relational
procurement).
Information systems discussing
how information systems can be
used to add value to an organisation
(potentially linked to HR/operations
issues).
Marketing applying key
concepts such as the marketing mix
to a scenario that could have ethical
implications.
Managing human capital
explaining how HR can maximise
the potential of an organisation,
both strategically (HR plan) and
operationally (recruitment andselection).
E2
The competitive environment
discussing and distinguishing
between different competitive
environments (e.g. using
stakeholder mapping and PEST).
Strategic management
discussing how a firm develops a
strategy, including the rational
planning model and its alternatives.
Project management explaining
what a project is and discussing the
tools and techniques used to
manage it (e.g. 4-D/7-S models).
Linking project management to
the external environment
(e.g. stakeholder management/
reconciling time, cost and quality
criteria).
Leadership discussing the
difference between power, authority
and responsibility as well as
understanding and managing
conflict.
Managing the relationship
between manager and subordinate,
including teamwork, legal issues
and interpersonal (negotiating/
communication) skills.
E3
The competitive environment:
The way an organisation develops
strategy is affected by its external
This is it, our lastever exam tips pull-out supplement
for the CIMA November exams. Good luck you lot!
Continued on page 22
TOP
OFTHETIPS
environment and stakeholders. Be
familiar with the PEST and Five
Forces models.
Strategic planning approaches
vary from the rational model to
emergent strategy.
Information systems (IS) and
information technology (IT) can
have a significant impact on an
organisation and its competitiveposition.
Strategic position and choices:
Internal resources and capabilities
of an organisation shape its
strategic options.
Be able to identify different
strategic options, using models
such as Ansoff, Lynch and Porters
generic strategies.
The evaluation of strategic options
should be structured around the
SAF framework.
Change management:
Be able to discuss the changeprocess and identify triggers for
change, be able to draw on models
such as Balogun & Hope Haileys
change matrix and Lewins Force
Field Analysis.
You may also need to recommend
how change can be managed
successfully to support an
organisations strategy, and how
resistance to change can be
overcome, referring to the McKinsey
7S model.
Implementation and performance
evaluation: Performance measurement is very
important for an organisation to be
able to evaluate the performance
implications of a given strategy, and
whether it is delivering the benefits
an organisation hoped it would.
Performance measures can be
both financial and non-financial, be
able to refer to the balanced
scorecard and the performance
pyramid.
F1
Section A:
Taxation (three to five questions)
definitions of key terms such as
jurisdiction and hypothecation;
calculations such as corporate tax
due, underlying and withholding tax
and sales tax.
External audit the purpose of
the audit and the rights and duties
of the auditor.
Ethics definitions of the
fundamental principles and ethical
threats.
Accounting standards questions
testing definitions/calculations on
areas such as IAS 18 Revenue, IAS
38 Intangibles and IFRS 8
Operating Segments.
Section B:
Taxation (three to four questions)
written questions relating to tax
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PQ CIMA exam tips
definitions such as underlying and
withholding tax and the
administration of taxes as well as
more detailed calculations on the
areas of direct, indirect,
international tax and deferred
taxation.
External audit practical
questions based on a scenariorequiring you to consider whether
the auditors report needs to be
modified.
Ethics practical questions based
on a scenario requiring you to
explain the ethical dilemma and
consider the practical steps that
could be taken to address the issue.
Accounting standards written or
computational questions on areas
such as IAS 7 Statements of Cash
Flows, IAS 11 Construction
Contracts, IAS 17 Leases and IFRS
5 Assets Held for Sale andDiscontinued Operations.
Section C:
Prepare the statement of profit or
loss and other comprehensive
income, statement of financial
position and statement of changes
in equity for a single entity
(including adjustments for
inventory, property, plant and
equipment, intangibles, current and
deferred tax, provisions, leases and
construction contracts).
Prepare the statement of cash
flows for a single entity. Prepare the consolidated
statement of financial position and/
or the consolidated statement of
profit or loss for a parent, subsidiary
and associate (including
adjustments for goodwill, the
impairment of goodwill, inter-
company trading and unrealised
profit).
The preparation of financial
statements for a single company
and a group are the most common
requirements in Section C. Where
the statement of cash flows is
tested, it is likely that this will be
worth 1520 marks and a separate
requirement will examine another
aspect of the F1 syllabus.
F2
Section A:
Groups question numerical
(consolidated statement of profit or
loss and other comprehensive
income, financial position or
changes in equity; extracts/workings
from group financial statements) or
written question (explanation of
accounting treatment of various
investments).
Interpretation of accounts
question segment reporting
(usefulness, limitations, analysis),
limitations of financial analysis,
interpretation of pre-calculated
You will often be asked to
produce a forecast to assess
whether objectives will be achieved.
Discussion areas could include
analysing the appropriate dividend
policy and the inter-relationships
between dividend, financing and
investment policies
Financial decisions:
You are often required to analysea source of finance (leasing is an
especially important area),
including cost of capital
calculations and discussion of
gearing levels; knowledge of the
role and limitations of Modigliani &
Miller theory is very important.
Make sure that you can discuss
the role and structure of a Treasury
Department.
The different working capital
financing and dividend strategies
are a popular area for this
examiner.Investment decisions and project
control:
Overseas investment appraisal is
one of the most important areas in
this syllabus and is often tested in
question 1. Make sure that you
revise this area very carefully and
that you can apply the two different
methods for assessing overseas
investments and also that you can
discuss risk and financing issues,
too.
Business valuations are another
crucial area and is also commonlyexamined in question 1 of the
exam; make sure that you can
apply all of the valuation methods
and that you can debate financing
issues and post acquisition
integration.
Adjusted present value and real
options are also important areas
where a solid knowledge is
important.
Make sure that you are able to
discuss project control techniques
such as post auditing.
Kaplan FinancialE1
Section A:
Expect the questions to cover the
full range of the syllabus.
Sections B and C:
The global business environment:
Emerging economies with
possible link to outsourcing/
offshoring.
Culture.
Corporate political activity.
Information systems:
System testing and/ or
maintenance.
Resistance to change.
Operations management:
Capacity planning/inventory
management.
Cousins or Reck and Long.
Marketing:
Market planning process and
the 4Ps.
B2B and B2C marketing.
Managing human capital:
HR theories (e.g. McGregor).
HR planning including
learning, training and development.
E2
Strategic management: Corporate appraisal and its
components, especially PEST and
Porters five forces.
Corporate social responsibility.
Stakeholder analysis.
Relationship management:
Corporate Governance and ethics.
Mentoring.
Communication.
Project management:
Benefits/drawbacks of a single
methodology such as PRINCE 2.
Project management tools, such
as CPA or WBS. Managing project teams.
E3
Strategic analysis and evaluation.
Mission and objectives.
Corporate social responsibility
and ethics.
F1
Company income statement,
statement of financial position,
statement of changes in equity
examined as a section C question.
Consolidated income statement
and statement of financial position
incorporating adjustments for intercompany selling/balances,
unrealised profit, impairment, fair
value and depreciation. Likely to be
a section C question.
Statement of cash flows using the
direct method (likely to be the
section B question).
Finance lease payment in
advance.
IAS 11 Construction contracts
possibly a loss making scenario.
IAS 37 Provisions and
contingencies.
PPE note including
depreciation, disposal, revaluation
and possibly asset held for sale
could be a section B question or
part of a note in section C for a
single entity question.
Business tax:
VAT calculation and impact on
profit.
Avoidance versus evasion
explanation.
Calculation of deferred and
current tax as part of a section C
question.
F2
General interpretation plus
limitations of analysis/further
information.
Earnings per share.
Financial instruments.
Share based payment.
Continued from page 21ratios/statement of cash flow or
written/numerical EPS question.
Written question on external
reporting, for example, human asset
accounting, environmental/social
reporting, narrative reporting (such
as management commentary or
operating and financial review), or
convergence between US GAAP
and IFRS. Two multi-topic or single-topic
questions on Issues in Recognition
and Measurement on some or all of
the following:
Classification, recognition, initial
and subsequent measurement of
financial instruments requiring
explanation of accounting treatment
and/or calculations and/or journals.
Substance over form
discussion of accounting treatment
(risks and benefits) and journal in
context of consignment inventories,
sale and repurchase, structuredentities, debt factoring or loan asset
transfers.
Share-based payment cash or
equity settled; requiring explanation
of accounting treatment and/or
calculations and/or journal entries.
Pension accounting
numerical question with notes to
financial statements or written
question explaining accounting
treatment for defined benefit plan
and/or defined contribution plan.
Asset valuation and changing
prices explanation of, comparisonbetween or advantages and
disadvantages of historic cost
accounting, current cost accounting
and current purchasing power;
IFRS 13 Definition of Fair Value and
/or advantages and disadvantages
of fair value accounting.
Section B:
Group financial statements,
e.g. preparation of consolidated
statement of profit or loss and other
comprehensive income, financial
position, changes in equity or cash
flow incorporating a change in
group structure (step acquisition
and/or disposal), a foreign
subsidiary or a complex group and
often written explanation of
accounting treatment.
Analysis of financial performance
and position in a scenario
(including some or all of statement
of profit or loss and other
comprehensive income, financial
position, changes in equity, cash
flow, segment analysis, pre-
calculated ratios). Usually, about
eight marks are available for
calculation of ratios and 12 marks
for commentary. Possible part (b)
on limitations of ratio analysis or
extra information required.
F3
Formulation of financial strategy:
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Developments in external
reporting voluntary reporting.
F3
Section A:
In the past, section A has
generally focused on topics from
syllabus section C: Investment
Decisions and Project Control,
which accounts for 45% of the
syllabus, so investment appraisaland business valuation have been
the main topics. Although the
examiner has said that section A
will not always focus on these
areas, the last six papers have all
covered one or other of them,
emphasising how important it is to
be ready for a question on either of
these core topics.
Section B:
This will contain three questions.
Key topic areas which may be
tested this sitting are:
Rights issues (theoretical ex-rights prices).
Lease v buy decision.
The role of treasury.
P1
NPV.
Planning and operating
variances.
Decision trees and expected
values.
Working capital management.
P2
Breakeven analysis.
Relevant costing and decision
making. Participation in budgeting.
Transfer pricing.
Responsibility accounting.
Divisional performance
evaluation.
P3
Management control systems:
Employee or management risks
and controls.
Risk and internal control:
Ethics a small requirement
(around 5 marks) usually features
somewhere on the paper.
Corporate governance different
types of committees used to control
companies.
Review and audit of control
systems:
Internal audit.
Management of financial risk:
Interest rate risk and swaps
(foreign exchange risk management
came up in September 2014).
Risk and control in information
systems:
IT strategy.
IT risks and controls.
LSBF
E1
National cultural differences (The
Hofstede Model).
Implementation of systems with a
view to overcoming user resistance.
Measuring service quality
(SERVQUAL).
Pricing strategies.
Effective appraisal systems.
E2
Levels of strategy.
Porters diamond.
Transaction cost theory.
Project planning.
Network diagram.
Conflict.
Groups and teams.
Communication.
Ethics and corporate social
responsibilities.
E3
Ansoff growth strategies.
Change management on
implementation possibly via Lewin.
Management of stakeholder
ethical context.
CSF and performance measure
identification.
Using technology to enhance
advantage.
F1
Income tax and deferred tax
calculations.
Property, plant and equipment,
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