usman - 02 Dec 2006, 03:36 am
Can anyone give here the link for BPP tips for Dec2006 or post them here. I'm in a real need of them
Regards
Regards
Part -2
»BPP TIPS???
( >> )Nisar - 03 Dec 2006, 01:40 am
Paper 2.1
Managing Information Systems
* Business strategy and IS/IT strategy
* Legacy systems
* Accounting for IS/IT costs
* Staff roles and responsibilities
* Project management and control
* Centralisation/decentralisation
Designing Information Systems
* Methodologies
* Modelling
* External design: data capture
* Invitation to tender
* Prototyping and 4GL
Evaluating Information Systems
* Security/legislation
* Quality
* Documentation
* Maintenance
Pre examination
* Review lecture notes after each session.
* Rework all questions that were worked during your tuition or revision phase.
* Learn the basis of theory’s and also their application in the real world.
* Read/review all examiners articles as these are often the basis of examination questions.
* Read a quality newspaper, noting uses of IS/IT in the real world.
* Practice as many examination questions as possible prior to the examination, including tuition and revision tests.
The examiners favourite topics include:
1. Analysis and design techniques
2. Security and legislation
3. Outsourcing and cost allocation
4. Testing and maintenance
5. Project management
In the exam
* Look at the marking guide to provide an indication as to the volume and time that should be devoted to each question.
* Watch your time management – don’t overrun your time allocation on each question, its easier to pass an exam attempting 100% of the exam than only doing 80%.
* Read the question carefully – highlight the key words.
* Take time to plan your answer.
* Explains theory and provide examples.
* Relate your answers to the issues raised in the scenario.
Paper 2.2 (GBR[not sure])
* EC law
* Courts
* Offer & acceptance
* Consideration (including Pinnel’s case)
* Exclusion clauses
* Discharge by performance
* Remedies for breach (including liquidated damages clauses & privity)
* Memorandum of Association (especially name clause)
* Reductions of capital
* Dividends
* Debentures and charges
* Directors (especially types & duties)
* Auditors
* Minority protection
* Insolvency
* Common law duties of employer & employee
* Dismissal
* Dissolution of the partnership
* Liability of partners to outsiders
Pre examination
* Review lecture notes after each session.
* Rework all questions that were worked during your tuition or revision phase.
* Learn the theory, but more importantly appreciate its real world application.
* Practice as many other exam standard questions as possible, including completing and course tests/examinations.
Don’t forget:
* Questions in Section A of the paper are designed to test candidates’ knowledge of the law.
* Questions in Section B of the paper are designed to test not only knowledge of the law but also understanding of the law by requiring candidates to apply the law to a factual scenario.
* Questions are often divided into several parts. This is particularly the case with questions on company law and enables the examiner to focus on more than one sub-topic of the syllabus in a single question.
In the exam
* Select your questions carefully, and then allocate your time.
* Look at the marking guide to provide an indication as to the volume and time that should be devoted to each question.
* Watch your time management – don’t overrun your time allocation on each question, its easier to pass an exam attempting 100% of the exam than only doing 80%.
* There are no marks for vague or irrelevant comments.
* In Section B - identify the legal issue, explain the relevant law, apply the law and then provide advice.
* Read the question carefully – highlight the key words.
* Relate your answers to the issues raised in the scenario.
Paper 2.3 (GBR[not sure])
Section A
Corporation Tax Q1 Adjustment of profits with capital allowances & industrial buildings allowance and some calculation of chargeable gain. CTSA. Long period of account.
Section B
VAT Q3 VAT return - calculation of VAT payable
Compulsory registration
Tax point
As from June 2005 exam, the format of the exam has changed and questions 5 to 7 can now be set on any topic:
* Overseas implication - Double tax relief
* Partnership with losses
* Employment Verses Self Employment with income tax and NIC calculations
* Disposal of business with capital allowances, CGT and some planning
* [Terminal loss relief for both Sole Traders has not been examined ]
Pre examination
* Review lecture notes after the end of the course.
* Rework all questions that were worked during your tuition or revision phase.
* Read, re-read and understand the examiner’s articles, as these invariably form the basis for questions on the exam paper.
* Practice as many other exam standard questions as possible, including completing and course tests/examinations.
In the exam
* Stay calm – if you have done the work suggested you are well prepared for the exam.
* Start with section A first as it is compulsory and needs to be done.
* Be precise with time allocation between questions and within questions.
* Where possible, do written sections first.
* Show all workings – as marks are awarded for method even if the answer is wrong. To award method marks, workings must be easy to follow.
* Start each answer on a new page.
Paper 2.4
*
Investment Appraisal; NPV to include relevant costs, tax and inflation, and possibly capital rationing and/or sensitivity analsysis
*
Working capital management, possibly to include stock
*
Costing systems (ABC ?)
*
Budgeting and Budgetary control
*
Long term finance and gearing
Pre Examination
* Review lecture notes after the end of the course
* Rework all questions that were worked during your tuition or revision phase
* Read, re-read and understand the examiner’s articles, as these invariably form the basis for questions on the exam paper
* Make short notes on all the discursive material, to help revise and learn facts
Remember that you should practice questions on the examiners favourite topics, which are:
1. Activity Based Costing
2. Budgeting
3· Variance Analysis
4· Financial management objectives
5· Long-term sources of finance
6· Working capital management
In the exam
* Stay calm – if you have done the work suggested you are well prepared for the exam.
* Look at the marking guide to provide an indication as to the volume and time that should be devoted to each question.
* Watch your time management – don’t overrun your time allocation on each question, its easier to pass an exam attempting 100% of the exam than only doing 80%.
* Read the question carefully – highlight the key words.
* Read the question requirements at least twice before you start writing, and again when you have finished answering it – this will keep you focussed on answering the question set and not the question you thought had been set!
* Spend a few minutes planning your answer – this will help you to build a structure to your answer.
Paper 2.5 (Int)
December 2006
*
Groups
*
Restated financial statement
*
Substance
*
Provisions
*
Cash flow
*
Interpretation
Pre examination
It is assumed that candidates will have passed Paper 1.1 Preparing Financial Statements or have gained an exemption by passing an equivalent examination.
The candidate should have obtained double entry book-keeping skills and be able to prepare basic Ltd Company published accounts and cash flows. Also the following accounting standards become assumed knowledge:
* SSAP 9 Stocks and long term contracts (Stock only)
* SSAP 13 Research and Development
* SSAP 17 Post balance sheet events
* FRS 1 Cash flow statements
* FRS 3 Reporting financial performance
* FRS 12 Provision and contingencies
* FRS 15 Tangible fixed assets
* FRS 18 Accounting policies
In the exam
* Look at the marking guide to provide an indication as to the volume and time that should be devoted to each question.
* Watch your time management – don’t overrun your time allocation on each question, its easier to pass an exam attempting 100% of the exam than only doing 80%.
* Be aware that with numerical questions it is very easy to overrun on your time management.
* Read the question carefully – highlight the key words.
* Read the question requirements first to ensure you focus on what is required and not what you think is required.
* Make good use of proformas, using separate sheets for working papers or appendices.
* If you can’t remember the name and number of a standard don’t put it down.
Paper 2.6 (Int)
*
New Client Appointment / Conflicts of Interest
*
Practical Audit Risk
*
Engagement Letters
*
Materiality
*
Sampling
*
Substantive Testing of Receivables / Payables
*
Audit Report scenarios
*
Role of Audit Committees
*
Responsibilities for fraud
Pre examination
* Examiner requires students to have a thorough knowledge of the audit process, with emphasis on practically applying audit techniques to situations.
* Examiner also expects students to be able to apply this process to given scenarios.
* It is helpful if students are aware of developments in audit, so reading the business pages of a “quality” national newspaper and accountancy journals is advised.
* the examiner wants you to know and understand the content of relevant auditing and accounting standards, but you do not need to know which SAS or FRS/SSAP number.
* Given the paper is likely to be almost entirely written, exam presentation is very important.
The examiners favourite topics include:
* Professional Ethics.
* Risk assessment and the response to risk for external auditors (Planning).
* Internal Controls.
* Substantive audit evidence.
* The role of internal audit in risk management and corporate governance
In the exam
* Look at the marking guide to provide an indication as to the volume and time that should be devoted to each question.
* Watch your time management – don’t overrun your time allocation on each question, its easier to pass an exam attempting 100% of the exam than only doing 80%.
* Read the question carefully – highlight the key words.
* Within your answer, the examiner encourages students to underline key words within their answers.
* Relate your answers to the issues raised in the scenario.
Managing Information Systems
* Business strategy and IS/IT strategy
* Legacy systems
* Accounting for IS/IT costs
* Staff roles and responsibilities
* Project management and control
* Centralisation/decentralisation
Designing Information Systems
* Methodologies
* Modelling
* External design: data capture
* Invitation to tender
* Prototyping and 4GL
Evaluating Information Systems
* Security/legislation
* Quality
* Documentation
* Maintenance
Pre examination
* Review lecture notes after each session.
* Rework all questions that were worked during your tuition or revision phase.
* Learn the basis of theory’s and also their application in the real world.
* Read/review all examiners articles as these are often the basis of examination questions.
* Read a quality newspaper, noting uses of IS/IT in the real world.
* Practice as many examination questions as possible prior to the examination, including tuition and revision tests.
The examiners favourite topics include:
1. Analysis and design techniques
2. Security and legislation
3. Outsourcing and cost allocation
4. Testing and maintenance
5. Project management
In the exam
* Look at the marking guide to provide an indication as to the volume and time that should be devoted to each question.
* Watch your time management – don’t overrun your time allocation on each question, its easier to pass an exam attempting 100% of the exam than only doing 80%.
* Read the question carefully – highlight the key words.
* Take time to plan your answer.
* Explains theory and provide examples.
* Relate your answers to the issues raised in the scenario.
Paper 2.2 (GBR[not sure])
* EC law
* Courts
* Offer & acceptance
* Consideration (including Pinnel’s case)
* Exclusion clauses
* Discharge by performance
* Remedies for breach (including liquidated damages clauses & privity)
* Memorandum of Association (especially name clause)
* Reductions of capital
* Dividends
* Debentures and charges
* Directors (especially types & duties)
* Auditors
* Minority protection
* Insolvency
* Common law duties of employer & employee
* Dismissal
* Dissolution of the partnership
* Liability of partners to outsiders
Pre examination
* Review lecture notes after each session.
* Rework all questions that were worked during your tuition or revision phase.
* Learn the theory, but more importantly appreciate its real world application.
* Practice as many other exam standard questions as possible, including completing and course tests/examinations.
Don’t forget:
* Questions in Section A of the paper are designed to test candidates’ knowledge of the law.
* Questions in Section B of the paper are designed to test not only knowledge of the law but also understanding of the law by requiring candidates to apply the law to a factual scenario.
* Questions are often divided into several parts. This is particularly the case with questions on company law and enables the examiner to focus on more than one sub-topic of the syllabus in a single question.
In the exam
* Select your questions carefully, and then allocate your time.
* Look at the marking guide to provide an indication as to the volume and time that should be devoted to each question.
* Watch your time management – don’t overrun your time allocation on each question, its easier to pass an exam attempting 100% of the exam than only doing 80%.
* There are no marks for vague or irrelevant comments.
* In Section B - identify the legal issue, explain the relevant law, apply the law and then provide advice.
* Read the question carefully – highlight the key words.
* Relate your answers to the issues raised in the scenario.
Paper 2.3 (GBR[not sure])
Section A
Corporation Tax Q1 Adjustment of profits with capital allowances & industrial buildings allowance and some calculation of chargeable gain. CTSA. Long period of account.
Section B
VAT Q3 VAT return - calculation of VAT payable
Compulsory registration
Tax point
As from June 2005 exam, the format of the exam has changed and questions 5 to 7 can now be set on any topic:
* Overseas implication - Double tax relief
* Partnership with losses
* Employment Verses Self Employment with income tax and NIC calculations
* Disposal of business with capital allowances, CGT and some planning
* [Terminal loss relief for both Sole Traders has not been examined ]
Pre examination
* Review lecture notes after the end of the course.
* Rework all questions that were worked during your tuition or revision phase.
* Read, re-read and understand the examiner’s articles, as these invariably form the basis for questions on the exam paper.
* Practice as many other exam standard questions as possible, including completing and course tests/examinations.
In the exam
* Stay calm – if you have done the work suggested you are well prepared for the exam.
* Start with section A first as it is compulsory and needs to be done.
* Be precise with time allocation between questions and within questions.
* Where possible, do written sections first.
* Show all workings – as marks are awarded for method even if the answer is wrong. To award method marks, workings must be easy to follow.
* Start each answer on a new page.
Paper 2.4
*
Investment Appraisal; NPV to include relevant costs, tax and inflation, and possibly capital rationing and/or sensitivity analsysis
*
Working capital management, possibly to include stock
*
Costing systems (ABC ?)
*
Budgeting and Budgetary control
*
Long term finance and gearing
Pre Examination
* Review lecture notes after the end of the course
* Rework all questions that were worked during your tuition or revision phase
* Read, re-read and understand the examiner’s articles, as these invariably form the basis for questions on the exam paper
* Make short notes on all the discursive material, to help revise and learn facts
Remember that you should practice questions on the examiners favourite topics, which are:
1. Activity Based Costing
2. Budgeting
3· Variance Analysis
4· Financial management objectives
5· Long-term sources of finance
6· Working capital management
In the exam
* Stay calm – if you have done the work suggested you are well prepared for the exam.
* Look at the marking guide to provide an indication as to the volume and time that should be devoted to each question.
* Watch your time management – don’t overrun your time allocation on each question, its easier to pass an exam attempting 100% of the exam than only doing 80%.
* Read the question carefully – highlight the key words.
* Read the question requirements at least twice before you start writing, and again when you have finished answering it – this will keep you focussed on answering the question set and not the question you thought had been set!
* Spend a few minutes planning your answer – this will help you to build a structure to your answer.
Paper 2.5 (Int)
December 2006
*
Groups
*
Restated financial statement
*
Substance
*
Provisions
*
Cash flow
*
Interpretation
Pre examination
It is assumed that candidates will have passed Paper 1.1 Preparing Financial Statements or have gained an exemption by passing an equivalent examination.
The candidate should have obtained double entry book-keeping skills and be able to prepare basic Ltd Company published accounts and cash flows. Also the following accounting standards become assumed knowledge:
* SSAP 9 Stocks and long term contracts (Stock only)
* SSAP 13 Research and Development
* SSAP 17 Post balance sheet events
* FRS 1 Cash flow statements
* FRS 3 Reporting financial performance
* FRS 12 Provision and contingencies
* FRS 15 Tangible fixed assets
* FRS 18 Accounting policies
In the exam
* Look at the marking guide to provide an indication as to the volume and time that should be devoted to each question.
* Watch your time management – don’t overrun your time allocation on each question, its easier to pass an exam attempting 100% of the exam than only doing 80%.
* Be aware that with numerical questions it is very easy to overrun on your time management.
* Read the question carefully – highlight the key words.
* Read the question requirements first to ensure you focus on what is required and not what you think is required.
* Make good use of proformas, using separate sheets for working papers or appendices.
* If you can’t remember the name and number of a standard don’t put it down.
Paper 2.6 (Int)
*
New Client Appointment / Conflicts of Interest
*
Practical Audit Risk
*
Engagement Letters
*
Materiality
*
Sampling
*
Substantive Testing of Receivables / Payables
*
Audit Report scenarios
*
Role of Audit Committees
*
Responsibilities for fraud
Pre examination
* Examiner requires students to have a thorough knowledge of the audit process, with emphasis on practically applying audit techniques to situations.
* Examiner also expects students to be able to apply this process to given scenarios.
* It is helpful if students are aware of developments in audit, so reading the business pages of a “quality” national newspaper and accountancy journals is advised.
* the examiner wants you to know and understand the content of relevant auditing and accounting standards, but you do not need to know which SAS or FRS/SSAP number.
* Given the paper is likely to be almost entirely written, exam presentation is very important.
The examiners favourite topics include:
* Professional Ethics.
* Risk assessment and the response to risk for external auditors (Planning).
* Internal Controls.
* Substantive audit evidence.
* The role of internal audit in risk management and corporate governance
In the exam
* Look at the marking guide to provide an indication as to the volume and time that should be devoted to each question.
* Watch your time management – don’t overrun your time allocation on each question, its easier to pass an exam attempting 100% of the exam than only doing 80%.
* Read the question carefully – highlight the key words.
* Within your answer, the examiner encourages students to underline key words within their answers.
* Relate your answers to the issues raised in the scenario.
zaini - 03 Dec 2006, 04:13 pm
Nisar,i guess you have posted the wrong tips.Please do visit the bbp site and verify it yourself.
Paper 2.3 Exam Tips
ACCA Paper 2.3
Business Taxation
December 2006 Exam Tips
Suggested practice questions from the BPP Practice and Revision Kit are shown next to the relevant area.
Section A
The first question will always be on Corporation Tax and the second question on Income tax.
Question 1 is always based on a fairly basic CT computation, and you should expect to see a detailed capital allowances computation and very often IBAs as well.
I would expect to see an adjustment to profit calculation in this exam as we have not seen this in any substantial amount for a couple of sittings.
Capital gains are being examined more commonly within section A; this could possibly be incorporated with capital losses.
Trading losses came up in June 2006 so I would expect a trading profit this time around, and maybe a long period of account (not seen for a while).
There are usually a few marks for admin points within this question (perhaps enquiries/record keeping?).
Practice and revision kit relevant questions:
Q3 Unforeseen Ultrasonics Ltd
Q6 Arable Ltd
Q57 Tick-Tock Ltd
The Income Tax question might involve an individual who has been employed and has commenced trading (or vice versa)- Dec 05 was entirely employment based and June 06 wholly based on a self-employed individual with lots of adjustment to profits. No opening/closing year rules have come up for a while in a compulsory question (except with 5 April year ends!) so I could see potential for an opening years question, maybe with a loss.
Practice and revision kit relevant questions: Q30 Malcolm
Q37 Clayton Delaney
Q56 Mark Kett
Section B
These questions are likely to comprise of:
Q3 VAT – The examiner has so far covered a variety of VAT topics in each exam. Registration has not been seen for a while.
Q4 CGT – Potentially a question with a company making an inter-company transfer, or claiming rollover/holdover relief. The examiner is keen on the deferral reliefs so if the question centres around an individual, I may expect to see incorporation relief as it hasn’t come up recently.
Practice and revision kit relevant questions:
Q13 Astute Ltd
Q15 Forward Ltd
Q42 Alice Lim
Q5, Q6 & Q7 OTHER – Any other topics will be examined here.
These may include:
Partnerships (possibly with IT losses)
Corp tax - Self assessment procedures
Tax planning – incorporation
Practice and revision kit relevant questions: Q53 Sarah Style
Please note the examiners deliberately try to avoid question spotting. Just because a question featured last time, it doesn’t mean it won’t feature this time. Use the tips as areas to have a look at, but remember that no one knows what is in the exam, apart from the examiner. Your safest bet is to achieve good syllabus coverage in your revision, as the examiner aims to do in the exam.
ACCA Paper 2.3
Business Taxation
Relevant Articles (updated July 2006)
At the time of writing, no new articles have been published that are relevant to paper 2.3 (GBR). Hence the articles below are as for the June 2006 sitting.
ARTICLE NAME AUTHOR DATE
Finance Act 2005 David Harrowven Oct 05
VAT Pattie Laycock Aug 05
Income Tax Pattie Laycock Aug 05
Corporate Tax Pattie Laycock Aug 05
Capital gains Pattie Laycock Aug 05
Groups of companies and overseas aspects David Harrowven Jun 05
Capital gains David Harrowven May 05
Value Added Tax David Harrowven Mar 05
Paper 2.1 Exam Tips
Exam Tips and Relevant Articles The key issue about the exam format is that each section will have just one question on each major section of the syllabus.
The three key areas are: -
1. Managing information systems,
2. Designing information systems,
3. Evaluating information systems.
Overall there will therefore be 2 questions on each key area; one compulsory (section A) and one chosen (section B).
The section A questions are often in two parts, with the marks split evenly across the two parts: -
Part 1 - State the theory
Part 2 - Apply the theory to the scenario
It therefore follows that unless students learn the scenario approach of extracting information from the scenario and applying this to their answers they will have difficulty in gaining a pass mark from section A.
Managing information systems
There will be a maximum of 40 marks on offer applicable to this area.
Business Strategy and IS/IT alignment (Q1 and Q70)
Delivering information systems – accounting issues (Q9 and Q91)
Project planning – Gantt charts (Mock Exam 1 Q4 and Q81 )
Organising IS – End user computing
Designing information systems
There will be a maximum of 40 marks on offer applicable to this area.
External design – User friendly systems and Prototyping (Q40 and Q83)
The information systems development process – Waterfall and Spiral models (Q24, Q25 and Q26 )
Modelling user requirements – data flow diagrams (Q85)
Developing solutions – Bespoke systems (Q83)
Evaluating information systems
There will be a maximum of 40 marks on offer applicable to this area.
Quality assurance in the management and development process – V model (Q47 and Q87)
Relationship of development processes and quality (Q94 and Q80)
Implementing security – physical security (Q53)
Implementation issues – training (Q!07)
Practice questions
Practice questions listed above can be found in the Practice & Revision Kit for exams in 2006. Where possible both section A and B questions have been identified.
Health Warning!
The examiners deliberately try to avoid question spotting; just because a question featured last time doesn’t mean that it won’t feature this time. Use the tips as areas to have a good look at, but remember no one knows what is in the exam, apart from the examiner. Your safest bet is to achieve good syllabus coverage in your revision, as the examiner aims to do in the exam.
Latest most Relevant Articles
IT development methodologies
Ruth Court
Student Accountant August 2005
The V model
Steve Skidmore
Student Accountant January 2006
(Students should review all the relevant articles on the accaglobal website – in the last exam the examiner examined a 2001 article AGAIN!)
Paper 2.2 Exam Tips
ACCA paper 2.2
Corporate and Business Law
December 2006 Exam Tips For each area described please note the reference to a question from the BPP Practice and Revision kit (P&R kit)
The examiner is likely to test mainstream areas of the syllabus on Section A. Section A tests the law in a factual way. It is rare for Section A questions to require application. Students should expect at least one question on the English legal system, two on contract law, possibly one question on employment law, one on agency and/or partnerships and two to three on company law.
Offer and/or Acceptance (P&R kit Q14)
Exclusion clauses (P&R kit Q29)
Breach (P&R kit Q35)
The veil of incorporation – a core syllabus area. (P&R kit Q54)
Auditors (P&R Kit Q84)
Company formation (P&R kit Q58,Q60)
Insolvency (P&R kit Q107)
Section B questions could come from anywhere in the syllabus and it is likely that at least three will include application. Two questions are likely to come from the business area of the syllabus and two from the corporate law section.
Consideration (P&R kit Q22)
Insider Dealing(P&R kit Q82)
Directors and minority rights (P & R kit Q90,Q76)
Partnerships (P & R kit Q50,Q52)
Paper 2.4 Exam Tips
ACCA Paper 2.4
Financial Management and Control
December 2006 Exam TipsAnthony Head is the examiner for FMC. He has set exams, which are fair and focused on the core areas of the syllabus.
The references after each topic are to questions in the 2006 Practice and revision kit:
Section A
Section A is a compulsory 50-mark question based on a case scenario of about 1½ - 2 pages. It tends to contain questions on investment appraisal and sources of finance.
• Investment appraisal – Q86 Water supply services, Q95 Springbank, Q98 Sassone
• Sources of finance – Q65 Newsam, Q66 Sources, Q69 Collingham, Q72 Raising finance, Q74 Tirwen
• Performance measures – Q95 Springbank, Q38 Investment Group
Remember that the more complete case scenarios you attempt the better prepared you will be. The Case scenarios in our practice and revision kit are questions 88 to 98.
Section B
In section B of the exam there will be two questions on Financial Management – if investment appraisal does not appear in section A then it will definitely appear in section B, the examiner has never set a 2.4 exam which does not have an investment appraisal question. The other two questions will be on areas from the Management Accounting section of the syllabus.
• Working capital (probably stock management but possibly debtor management) – Q59 JIT and EOQ, Q56 PCB, Q55 Special gift suppliers, Q61 Velm
• Modern costing techniques – Q7 Throughput accounting, Q10 Abkaber
• Variance analysis – Q19 Hairdressers, Q22 Woodeezer, Q23 Carat, Q24 Linsil
• Capital rationing - Q83 Filtrex, Q84 PI, Q85 Basril
• Sensitivity analysis, risk and uncertainty – Q80, Q81 Forex risk, Q82 Umunat
Health Warning! The examiners deliberately try to avoid question spotting. Just because a question featured last time, doesn’t mean it won’t feature this time. Use the tips as areas to have a good look at, but remember that no one knows what is in the exam, apart from the examiner. Your safest bet is to achieve good syllabus coverage in your revision, as the examiner aims to do in the exam.
Paper 2.5 Exam Tips
ACCA Paper 2.5 (Global)
Part 2 - Financial Reporting
December 2006 Exam TipsFor each area described, please note the reference to useful questions from BPP’s Practice and Revision kit (P&R kit) (2006 edition) for the International Stream or UK Variant. We recommend you practise them all to get broad syllabus coverage.
Section A
Question 1
Section A will comprise one compulsory question that will examine group accounting. Group accounting is a core area and this question could ask you to produce a consolidated balance sheet and/or income statement (profit & loss account) with one subsidiary and possibly an associate or joint venture.
It usually includes adjustments for items such as: fair values, unrealised profit on inventories (stock) or tangible assets, cancellation of intragroup trading, goods/cash in transit, pre-acquisition dividends.
Part (b) of the question usually includes a related discussion element.
2006 P&R Kit Questions: Q52 Hanford (B/S), Q46 Hydrate (I/S and B/S), Q50 Holdrite (I/S with associate), Q55 Hapsburg (B/S with associate), Q51 Augment (joint venture).
Section B
Section B will comprise four questions out of which candidates should select three questions. The examiner, Steve Scott has stated that the style of the paper will remain fairly static:
Question 2
Question 2 will be preparation/restatement of an income statement (profit & loss account) and/or balance sheet. This question normally requires adjustments for current tax, depreciation, interest and dividends. Other adjustments may relate to debt factoring or other substance over form issues, leases, financial/capital instruments, revaluations, share issues, inventory (stock) valuation, government grants or deferred tax. There may be further disclosure requirements such as discontinued operations, movement in reserves or an earnings per share calculation.
2006 P&R Kit Questions: Q8 Chamberlain, Q28 Telenorth, Q35 Deltoid (also includes convertible debt), Q54 Bloomsbury.
Question 3
Question 3 will be a written question examining theoretical/conceptual areas or accounting standards. This could be on construction contracts, leases, provisions, inflation, intangible assets, accounting policies or substance over form issues with reference to the Framework for the Preparation and Presentation of Financial Statements (Statement of Principles).
2006 P&R Kit Questions: Q13 Dexterity (intangibles), Q26 Bodyline (provisions), Q31 Atkins (substance), Q57 Update (inflation). For other topics, see Question 5.
Question 4
Question 4 is likely to examine interpretation and/or cash flow statements. There could also be a discursive part on why, for example, related party or discontinued operations disclosures are useful.
2006 P&R Kit Questions: Q39 Planter (CFS), Q40 Bigwood (CFS and interps), Q63 Comparator (interps).
Question 5
Question 5 has no specified format or content and will cover other areas of the syllabus. The examiner frequently includes a 'mixed bag' question, which examines three or four different accounting standards.
Possibilities this sitting include: deferred tax, segment reporting, events after the balance sheet date, governments grants, financial/capital instruments, discontinued operations or substance over form issues.
2006 P&R Kit Questions: Q3 Derringdo (revenue and grants), Q7 Tintagel (accounts preparation & financial instruments), Q17 Linnet (construction contracts, segment reporting) (Q16 in UK kit), Q21 Bowtock (deferred tax, leases, events after the balance sheet date), Q27 IFRS 5 (INT kit only).
Relevant Articles (www.accaglobal.com/students)
Problems areas in group accounts
Steve Scott (Examiner), 30 May 2006
How to approach performance appraisal questions
Steve Scott (Examiner), 28 April 2004
First time adoption of International Financial Reporting Standards
Steve Scott (Examiner), 4 January 2005
Dealing with debtors
Graham Holt, 14 October 2005
Health Warning! The examiners deliberately try to avoid question spotting. Just because a question featured last time, doesn’t mean it won’t feature this time. Use the tips as areas to have a good look at, but remember that no one knows what is in the exam, apart from the examiner. Your safest bet is to achieve good syllabus coverage in your revision, as the examiner aims to do in the exam.
Paper 2.5i Exam Tips
ACCA Paper 2.5 (Global)
Part 2 - Financial Reporting
December 2006 Exam TipsFor each area described, please note the reference to useful questions from BPP’s Practice and Revision kit (P&R kit) (2006 edition) for the International Stream or UK Variant. We recommend you practise them all to get broad syllabus coverage.
Section A
Question 1
Section A will comprise one compulsory question that will examine group accounting. Group accounting is a core area and this question could ask you to produce a consolidated balance sheet and/or income statement (profit & loss account) with one subsidiary and possibly an associate or joint venture.
It usually includes adjustments for items such as: fair values, unrealised profit on inventories (stock) or tangible assets, cancellation of intragroup trading, goods/cash in transit, pre-acquisition dividends.
Part (b) of the question usually includes a related discussion element.
2006 P&R Kit Questions: Q52 Hanford (B/S), Q46 Hydrate (I/S and B/S), Q50 Holdrite (I/S with associate), Q55 Hapsburg (B/S with associate), Q51 Augment (joint venture).
Section B
Section B will comprise four questions out of which candidates should select three questions. The examiner, Steve Scott has stated that the style of the paper will remain fairly static:
Question 2
Question 2 will be preparation/restatement of an income statement (profit & loss account) and/or balance sheet. This question normally requires adjustments for current tax, depreciation, interest and dividends. Other adjustments may relate to debt factoring or other substance over form issues, leases, financial/capital instruments, revaluations, share issues, inventory (stock) valuation, government grants or deferred tax. There may be further disclosure requirements such as discontinued operations, movement in reserves or an earnings per share calculation.
2006 P&R Kit Questions: Q8 Chamberlain, Q28 Telenorth, Q35 Deltoid (also includes convertible debt), Q54 Bloomsbury.
Question 3
Question 3 will be a written question examining theoretical/conceptual areas or accounting standards. This could be on construction contracts, leases, provisions, inflation, intangible assets, accounting policies or substance over form issues with reference to the Framework for the Preparation and Presentation of Financial Statements (Statement of Principles).
2006 P&R Kit Questions: Q13 Dexterity (intangibles), Q26 Bodyline (provisions), Q31 Atkins (substance), Q57 Update (inflation). For other topics, see Question 5.
Question 4
Question 4 is likely to examine interpretation and/or cash flow statements. There could also be a discursive part on why, for example, related party or discontinued operations disclosures are useful.
2006 P&R Kit Questions: Q39 Planter (CFS), Q40 Bigwood (CFS and interps), Q63 Comparator (interps).
Question 5
Question 5 has no specified format or content and will cover other areas of the syllabus. The examiner frequently includes a 'mixed bag' question, which examines three or four different accounting standards.
Possibilities this sitting include: deferred tax, segment reporting, events after the balance sheet date, governments grants, financial/capital instruments, discontinued operations or substance over form issues.
2006 P&R Kit Questions: Q3 Derringdo (revenue and grants), Q7 Tintagel (accounts preparation & financial instruments), Q17 Linnet (construction contracts, segment reporting) (Q16 in UK kit), Q21 Bowtock (deferred tax, leases, events after the balance sheet date), Q27 IFRS 5 (INT kit only).
Relevant Articles (www.accaglobal.com/students)
Problems areas in group accounts
Steve Scott (Examiner), 30 May 2006
How to approach performance appraisal questions
Steve Scott (Examiner), 28 April 2004
First time adoption of International Financial Reporting Standards
Steve Scott (Examiner), 4 January 2005
Dealing with debtors
Graham Holt, 14 October 2005
Health Warning! The examiners deliberately try to avoid question spotting. Just because a question featured last time, doesn’t mean it won’t feature this time. Use the tips as areas to have a good look at, but remember that no one knows what is in the exam, apart from the examiner. Your safest bet is to achieve good syllabus coverage in your revision, as the examiner aims to do in the exam.
Paper 2.6 Exam Tips
ACCA Paper 2.6
Audit & Internal Review
December 2006 Exam TipsThe following list is an idea of the type of questions that may come up in the coming exam. The list highlights areas of the syllabus and how they may well be tested.
Suggested practice questions from the BPP Practice and Revision Kit (2006 edition) are shown after the relevant area. It is also worth reviewing the past exam questions mentioned to give you an idea of how a topic has been examined recently. These are easily available on the ACCA website (www.accaglobal.com/students).
• Internal audit/ Internal review – Following the new examiner’s article on how the internal audit department can assist in corporate governance and risk management, this area has been frequently tested. (In all papers, June 2006, December 2005 and June 2005). Note that in addition to a specific question on internal audit or reviews conducted by internal or external staff, questions could be in the form of a report to management on control weaknesses with recommendations, very similar in substance to that produced by an external auditor (see Systems and Controls below) (P&R kit practice: Q6 Internal Auditors, Q8 Roxy Hotels)
• Substantive testing – This will be in the exam, but what will be tested? In June 2006 Fixed (Non current) assets were tested. December 2005 covered inventories (stock). In June 2005 sales and tangible assets were tested. In December 2004 substantive testing of payroll balances was tested (Q4). In June 2004 inventories (stock) (Q3) and payables (creditors) and accruals (Q4) came up. In December 2003 payroll audit was tested (Q2). In June 2003, Inventories (stock) (Q2) and provisions were tested (Q3). In the December 2002 exam, payables (creditors) (Q3) and inventories (stock) were tested (Q5). In June 2002 cash was tested (Q2) and in December 2001 receivables (debtors) were tested (Q4). That would appear to leave bank/cash and receivables (debtors) and possibly another appearance of inventories as likely candidates for examination this time round. (P&R kit practice: Q42 Springfield Nurseries, Q49 Goodfoot & Q51 Villawood Computers)
• Systems and controls – Again this topic will be included in the exam in some format. In June 2006, the question covered the objectives of internal controls. In June 2005 Q3 was centred around a complex computer system. The examiner has warned that computers will be expected to feature in scenarios. In December 2004 Q3 risks from a scenario had to be spotted, and controls recommended. In June 2004, they came up in the context of outsourced catering and payroll (Q5). In December 2003 controls over payroll were tested in Q2 and Q1 included controls over business risks in the areas of human resources, procurement and marketing. In June 2003, controls over non-current (fixed) assets were tested (Q6). In the December 2002 exam the sales system was tested (Q2). In June 2002 the cash system was tested (Q2) and in December 2001 Purchases/ capital expenditure were tested (Q3). Any of these could come up again: the purchases/payables and sales/receivables systems looking the most likely. (P&R kit practice: Q36 Cosmo & Q34 Internal Control)
• Planning and risk assessment (from a scenario) – risk in one form or another comes up at most sittings. It is one of the key stages of the audit, but can also be examined in the context of a company's business risk as it was in June 2004. In December 2005, an audit planning memorandum, or audit strategy, was required. In June 2005 Q1 was a straightforward question looking for risks from a simple scenario. In December 2004, Q2 was centred around planning and the information you require, and Q1 was about spotting the risks of fraud and error. (P&R kit practice: Q20 EWheels & Q25 Nepco)
• Professional ethics – This is a core area examined in June 2006 (confidentiality) after a period away from the exam frm the previous 4 sittings. It is still a topical issue with all of the recent corporate collapses bringing the independence and professionalism of their advisors into question. Confidentiality came up again in December 2003 (Q6), conflicts of interest in June 2003 (Q3) and objectivity in December 2002 (Q1). Independence issues are still important and likely to be examined again at this sitting. (P&R kit practice: Q10 Billington Travel & Q11 Manly).
• Audit/ Assurance Reports – This is a very important area of the syllabus, it is deliverable from the end of all assurance engagements. You also need to be aware of the differences between internal audit reports/ external audit reports and other assurance reports such as review reports. It was tested in June 2005 as an unpopular optional question asking for errors in a given audit report. It has been tested in December 2003 (Q3 b and c), June 2003 (Q3c and Q5), June 2002 (Q3b) and December 2001 (Q5), but not in the last few sittings. (P&R kit practice: Q62 Audit Reports, Q65 Cremorne)
• Parts of questions – The following topics could form discrete parts of questions at this sitting: fraud, management representations, audit regulation, materiality, e-technology (see article below) so make sure you are up to speed on these areas.
Relevant Articles
The following articles can be found in the Student Accountant magazine (or ACCA website)
• Auditing manual and computerised systems, Alan Lewin, June 2006
• ISAs and SASs, Alan Lewin, March 2006
• The regulatory environment, Alan Lewin, 4 January 2005
• Audit risk in a brave new world, Namasiku Liandu, 30 September 2004
• Confirmation as audit evidence, Graham Cosserat and Katherine Bagshaw, 28 October 2003
• Electronic technology and the auditor, Katherine Bagshaw, 25 June 2003
• Service organisations, Katherine Bagshaw, 26 March 2003
• Internal audit and review reports, Katherine Bagshaw, 29 January 2003
• Corporate governance in the 21st century, Namasiku Liandu, 30 September 2002
• The independence of accountants, Namasiku Liandu, 10 June 2002
• The role of internal audit in risk management, Katherine Bagshaw, 1 March 2002
• Technique in auditing questions, Kim Smith, 4 September 2001
• Audit and internal review, Katherine Bagshaw, 1 June 2001
Health Warning! The examiners deliberately try to avoid question spotting. Just because a question featured last time, doesn’t mean it won’t feature this time. Use the tips as areas to have a good look at, but remember that no one knows what is in the exam, apart from the examiner. Your safest bet is to achieve good syllabus coverage in your revision, as the examiner aims to do in the exam.
Paper 2.6i Exam Tips
ACCA Paper 2.6
Audit & Internal Review
December 2006 Exam TipsThe following list is an idea of the type of questions that may come up in the coming exam. The list highlights areas of the syllabus and how they may well be tested.
Suggested practice questions from the BPP Practice and Revision Kit (2006 edition) are shown after the relevant area. It is also worth reviewing the past exam questions mentioned to give you an idea of how a topic has been examined recently. These are easily available on the ACCA website (www.accaglobal.com/students).
• Internal audit/ Internal review – Following the new examiner’s article on how the internal audit department can assist in corporate governance and risk management, this area has been frequently tested. (In all papers, June 2006, December 2005 and June 2005). Note that in addition to a specific question on internal audit or reviews conducted by internal or external staff, questions could be in the form of a report to management on control weaknesses with recommendations, very similar in substance to that produced by an external auditor (see Systems and Controls below) (P&R kit practice: Q6 Internal Auditors, Q8 Roxy Hotels)
• Substantive testing – This will be in the exam, but what will be tested? In June 2006 Fixed (Non current) assets were tested. December 2005 covered inventories (stock). In June 2005 sales and tangible assets were tested. In December 2004 substantive testing of payroll balances was tested (Q4). In June 2004 inventories (stock) (Q3) and payables (creditors) and accruals (Q4) came up. In December 2003 payroll audit was tested (Q2). In June 2003, Inventories (stock) (Q2) and provisions were tested (Q3). In the December 2002 exam, payables (creditors) (Q3) and inventories (stock) were tested (Q5). In June 2002 cash was tested (Q2) and in December 2001 receivables (debtors) were tested (Q4). That would appear to leave bank/cash and receivables (debtors) and possibly another appearance of inventories as likely candidates for examination this time round. (P&R kit practice: Q42 Springfield Nurseries, Q49 Goodfoot & Q51 Villawood Computers)
• Systems and controls – Again this topic will be included in the exam in some format. In June 2006, the question covered the objectives of internal controls. In June 2005 Q3 was centred around a complex computer system. The examiner has warned that computers will be expected to feature in scenarios. In December 2004 Q3 risks from a scenario had to be spotted, and controls recommended. In June 2004, they came up in the context of outsourced catering and payroll (Q5). In December 2003 controls over payroll were tested in Q2 and Q1 included controls over business risks in the areas of human resources, procurement and marketing. In June 2003, controls over non-current (fixed) assets were tested (Q6). In the December 2002 exam the sales system was tested (Q2). In June 2002 the cash system was tested (Q2) and in December 2001 Purchases/ capital expenditure were tested (Q3). Any of these could come up again: the purchases/payables and sales/receivables systems looking the most likely. (P&R kit practice: Q36 Cosmo & Q34 Internal Control)
• Planning and risk assessment (from a scenario) – risk in one form or another comes up at most sittings. It is one of the key stages of the audit, but can also be examined in the context of a company's business risk as it was in June 2004. In December 2005, an audit planning memorandum, or audit strategy, was required. In June 2005 Q1 was a straightforward question looking for risks from a simple scenario. In December 2004, Q2 was centred around planning and the information you require, and Q1 was about spotting the risks of fraud and error. (P&R kit practice: Q20 EWheels & Q25 Nepco)
• Professional ethics – This is a core area examined in June 2006 (confidentiality) after a period away from the exam frm the previous 4 sittings. It is still a topical issue with all of the recent corporate collapses bringing the independence and professionalism of their advisors into question. Confidentiality came up again in December 2003 (Q6), conflicts of interest in June 2003 (Q3) and objectivity in December 2002 (Q1). Independence issues are still important and likely to be examined again at this sitting. (P&R kit practice: Q10 Billington Travel & Q11 Manly).
• Audit/ Assurance Reports – This is a very important area of the syllabus, it is deliverable from the end of all assurance engagements. You also need to be aware of the differences between internal audit reports/ external audit reports and other assurance reports such as review reports. It was tested in June 2005 as an unpopular optional question asking for errors in a given audit report. It has been tested in December 2003 (Q3 b and c), June 2003 (Q3c and Q5), June 2002 (Q3b) and December 2001 (Q5), but not in the last few sittings. (P&R kit practice: Q62 Audit Reports, Q65 Cremorne)
• Parts of questions – The following topics could form discrete parts of questions at this sitting: fraud, management representations, audit regulation, materiality, e-technology (see article below) so make sure you are up to speed on these areas.
Relevant Articles
The following articles can be found in the Student Accountant magazine (or ACCA website)
• Auditing manual and computerised systems, Alan Lewin, June 2006
• ISAs and SASs, Alan Lewin, March 2006
• The regulatory environment, Alan Lewin, 4 January 2005
• Audit risk in a brave new world, Namasiku Liandu, 30 September 2004
• Confirmation as audit evidence, Graham Cosserat and Katherine Bagshaw, 28 October 2003
• Electronic technology and the auditor, Katherine Bagshaw, 25 June 2003
• Service organisations, Katherine Bagshaw, 26 March 2003
• Internal audit and review reports, Katherine Bagshaw, 29 January 2003
• Corporate governance in the 21st century, Namasiku Liandu, 30 September 2002
• The independence of accountants, Namasiku Liandu, 10 June 2002
• The role of internal audit in risk management, Katherine Bagshaw, 1 March 2002
• Technique in auditing questions, Kim Smith, 4 September 2001
• Audit and internal review, Katherine Bagshaw, 1 J
Paper 2.3 Exam Tips
ACCA Paper 2.3
Business Taxation
December 2006 Exam Tips
Suggested practice questions from the BPP Practice and Revision Kit are shown next to the relevant area.
Section A
The first question will always be on Corporation Tax and the second question on Income tax.
Question 1 is always based on a fairly basic CT computation, and you should expect to see a detailed capital allowances computation and very often IBAs as well.
I would expect to see an adjustment to profit calculation in this exam as we have not seen this in any substantial amount for a couple of sittings.
Capital gains are being examined more commonly within section A; this could possibly be incorporated with capital losses.
Trading losses came up in June 2006 so I would expect a trading profit this time around, and maybe a long period of account (not seen for a while).
There are usually a few marks for admin points within this question (perhaps enquiries/record keeping?).
Practice and revision kit relevant questions:
Q3 Unforeseen Ultrasonics Ltd
Q6 Arable Ltd
Q57 Tick-Tock Ltd
The Income Tax question might involve an individual who has been employed and has commenced trading (or vice versa)- Dec 05 was entirely employment based and June 06 wholly based on a self-employed individual with lots of adjustment to profits. No opening/closing year rules have come up for a while in a compulsory question (except with 5 April year ends!) so I could see potential for an opening years question, maybe with a loss.
Practice and revision kit relevant questions: Q30 Malcolm
Q37 Clayton Delaney
Q56 Mark Kett
Section B
These questions are likely to comprise of:
Q3 VAT – The examiner has so far covered a variety of VAT topics in each exam. Registration has not been seen for a while.
Q4 CGT – Potentially a question with a company making an inter-company transfer, or claiming rollover/holdover relief. The examiner is keen on the deferral reliefs so if the question centres around an individual, I may expect to see incorporation relief as it hasn’t come up recently.
Practice and revision kit relevant questions:
Q13 Astute Ltd
Q15 Forward Ltd
Q42 Alice Lim
Q5, Q6 & Q7 OTHER – Any other topics will be examined here.
These may include:
Partnerships (possibly with IT losses)
Corp tax - Self assessment procedures
Tax planning – incorporation
Practice and revision kit relevant questions: Q53 Sarah Style
Please note the examiners deliberately try to avoid question spotting. Just because a question featured last time, it doesn’t mean it won’t feature this time. Use the tips as areas to have a look at, but remember that no one knows what is in the exam, apart from the examiner. Your safest bet is to achieve good syllabus coverage in your revision, as the examiner aims to do in the exam.
ACCA Paper 2.3
Business Taxation
Relevant Articles (updated July 2006)
At the time of writing, no new articles have been published that are relevant to paper 2.3 (GBR). Hence the articles below are as for the June 2006 sitting.
ARTICLE NAME AUTHOR DATE
Finance Act 2005 David Harrowven Oct 05
VAT Pattie Laycock Aug 05
Income Tax Pattie Laycock Aug 05
Corporate Tax Pattie Laycock Aug 05
Capital gains Pattie Laycock Aug 05
Groups of companies and overseas aspects David Harrowven Jun 05
Capital gains David Harrowven May 05
Value Added Tax David Harrowven Mar 05
Paper 2.1 Exam Tips
Exam Tips and Relevant Articles The key issue about the exam format is that each section will have just one question on each major section of the syllabus.
The three key areas are: -
1. Managing information systems,
2. Designing information systems,
3. Evaluating information systems.
Overall there will therefore be 2 questions on each key area; one compulsory (section A) and one chosen (section B).
The section A questions are often in two parts, with the marks split evenly across the two parts: -
Part 1 - State the theory
Part 2 - Apply the theory to the scenario
It therefore follows that unless students learn the scenario approach of extracting information from the scenario and applying this to their answers they will have difficulty in gaining a pass mark from section A.
Managing information systems
There will be a maximum of 40 marks on offer applicable to this area.
Business Strategy and IS/IT alignment (Q1 and Q70)
Delivering information systems – accounting issues (Q9 and Q91)
Project planning – Gantt charts (Mock Exam 1 Q4 and Q81 )
Organising IS – End user computing
Designing information systems
There will be a maximum of 40 marks on offer applicable to this area.
External design – User friendly systems and Prototyping (Q40 and Q83)
The information systems development process – Waterfall and Spiral models (Q24, Q25 and Q26 )
Modelling user requirements – data flow diagrams (Q85)
Developing solutions – Bespoke systems (Q83)
Evaluating information systems
There will be a maximum of 40 marks on offer applicable to this area.
Quality assurance in the management and development process – V model (Q47 and Q87)
Relationship of development processes and quality (Q94 and Q80)
Implementing security – physical security (Q53)
Implementation issues – training (Q!07)
Practice questions
Practice questions listed above can be found in the Practice & Revision Kit for exams in 2006. Where possible both section A and B questions have been identified.
Health Warning!
The examiners deliberately try to avoid question spotting; just because a question featured last time doesn’t mean that it won’t feature this time. Use the tips as areas to have a good look at, but remember no one knows what is in the exam, apart from the examiner. Your safest bet is to achieve good syllabus coverage in your revision, as the examiner aims to do in the exam.
Latest most Relevant Articles
IT development methodologies
Ruth Court
Student Accountant August 2005
The V model
Steve Skidmore
Student Accountant January 2006
(Students should review all the relevant articles on the accaglobal website – in the last exam the examiner examined a 2001 article AGAIN!)
Paper 2.2 Exam Tips
ACCA paper 2.2
Corporate and Business Law
December 2006 Exam Tips For each area described please note the reference to a question from the BPP Practice and Revision kit (P&R kit)
The examiner is likely to test mainstream areas of the syllabus on Section A. Section A tests the law in a factual way. It is rare for Section A questions to require application. Students should expect at least one question on the English legal system, two on contract law, possibly one question on employment law, one on agency and/or partnerships and two to three on company law.
Offer and/or Acceptance (P&R kit Q14)
Exclusion clauses (P&R kit Q29)
Breach (P&R kit Q35)
The veil of incorporation – a core syllabus area. (P&R kit Q54)
Auditors (P&R Kit Q84)
Company formation (P&R kit Q58,Q60)
Insolvency (P&R kit Q107)
Section B questions could come from anywhere in the syllabus and it is likely that at least three will include application. Two questions are likely to come from the business area of the syllabus and two from the corporate law section.
Consideration (P&R kit Q22)
Insider Dealing(P&R kit Q82)
Directors and minority rights (P & R kit Q90,Q76)
Partnerships (P & R kit Q50,Q52)
Paper 2.4 Exam Tips
ACCA Paper 2.4
Financial Management and Control
December 2006 Exam TipsAnthony Head is the examiner for FMC. He has set exams, which are fair and focused on the core areas of the syllabus.
The references after each topic are to questions in the 2006 Practice and revision kit:
Section A
Section A is a compulsory 50-mark question based on a case scenario of about 1½ - 2 pages. It tends to contain questions on investment appraisal and sources of finance.
• Investment appraisal – Q86 Water supply services, Q95 Springbank, Q98 Sassone
• Sources of finance – Q65 Newsam, Q66 Sources, Q69 Collingham, Q72 Raising finance, Q74 Tirwen
• Performance measures – Q95 Springbank, Q38 Investment Group
Remember that the more complete case scenarios you attempt the better prepared you will be. The Case scenarios in our practice and revision kit are questions 88 to 98.
Section B
In section B of the exam there will be two questions on Financial Management – if investment appraisal does not appear in section A then it will definitely appear in section B, the examiner has never set a 2.4 exam which does not have an investment appraisal question. The other two questions will be on areas from the Management Accounting section of the syllabus.
• Working capital (probably stock management but possibly debtor management) – Q59 JIT and EOQ, Q56 PCB, Q55 Special gift suppliers, Q61 Velm
• Modern costing techniques – Q7 Throughput accounting, Q10 Abkaber
• Variance analysis – Q19 Hairdressers, Q22 Woodeezer, Q23 Carat, Q24 Linsil
• Capital rationing - Q83 Filtrex, Q84 PI, Q85 Basril
• Sensitivity analysis, risk and uncertainty – Q80, Q81 Forex risk, Q82 Umunat
Health Warning! The examiners deliberately try to avoid question spotting. Just because a question featured last time, doesn’t mean it won’t feature this time. Use the tips as areas to have a good look at, but remember that no one knows what is in the exam, apart from the examiner. Your safest bet is to achieve good syllabus coverage in your revision, as the examiner aims to do in the exam.
Paper 2.5 Exam Tips
ACCA Paper 2.5 (Global)
Part 2 - Financial Reporting
December 2006 Exam TipsFor each area described, please note the reference to useful questions from BPP’s Practice and Revision kit (P&R kit) (2006 edition) for the International Stream or UK Variant. We recommend you practise them all to get broad syllabus coverage.
Section A
Question 1
Section A will comprise one compulsory question that will examine group accounting. Group accounting is a core area and this question could ask you to produce a consolidated balance sheet and/or income statement (profit & loss account) with one subsidiary and possibly an associate or joint venture.
It usually includes adjustments for items such as: fair values, unrealised profit on inventories (stock) or tangible assets, cancellation of intragroup trading, goods/cash in transit, pre-acquisition dividends.
Part (b) of the question usually includes a related discussion element.
2006 P&R Kit Questions: Q52 Hanford (B/S), Q46 Hydrate (I/S and B/S), Q50 Holdrite (I/S with associate), Q55 Hapsburg (B/S with associate), Q51 Augment (joint venture).
Section B
Section B will comprise four questions out of which candidates should select three questions. The examiner, Steve Scott has stated that the style of the paper will remain fairly static:
Question 2
Question 2 will be preparation/restatement of an income statement (profit & loss account) and/or balance sheet. This question normally requires adjustments for current tax, depreciation, interest and dividends. Other adjustments may relate to debt factoring or other substance over form issues, leases, financial/capital instruments, revaluations, share issues, inventory (stock) valuation, government grants or deferred tax. There may be further disclosure requirements such as discontinued operations, movement in reserves or an earnings per share calculation.
2006 P&R Kit Questions: Q8 Chamberlain, Q28 Telenorth, Q35 Deltoid (also includes convertible debt), Q54 Bloomsbury.
Question 3
Question 3 will be a written question examining theoretical/conceptual areas or accounting standards. This could be on construction contracts, leases, provisions, inflation, intangible assets, accounting policies or substance over form issues with reference to the Framework for the Preparation and Presentation of Financial Statements (Statement of Principles).
2006 P&R Kit Questions: Q13 Dexterity (intangibles), Q26 Bodyline (provisions), Q31 Atkins (substance), Q57 Update (inflation). For other topics, see Question 5.
Question 4
Question 4 is likely to examine interpretation and/or cash flow statements. There could also be a discursive part on why, for example, related party or discontinued operations disclosures are useful.
2006 P&R Kit Questions: Q39 Planter (CFS), Q40 Bigwood (CFS and interps), Q63 Comparator (interps).
Question 5
Question 5 has no specified format or content and will cover other areas of the syllabus. The examiner frequently includes a 'mixed bag' question, which examines three or four different accounting standards.
Possibilities this sitting include: deferred tax, segment reporting, events after the balance sheet date, governments grants, financial/capital instruments, discontinued operations or substance over form issues.
2006 P&R Kit Questions: Q3 Derringdo (revenue and grants), Q7 Tintagel (accounts preparation & financial instruments), Q17 Linnet (construction contracts, segment reporting) (Q16 in UK kit), Q21 Bowtock (deferred tax, leases, events after the balance sheet date), Q27 IFRS 5 (INT kit only).
Relevant Articles (www.accaglobal.com/students)
Problems areas in group accounts
Steve Scott (Examiner), 30 May 2006
How to approach performance appraisal questions
Steve Scott (Examiner), 28 April 2004
First time adoption of International Financial Reporting Standards
Steve Scott (Examiner), 4 January 2005
Dealing with debtors
Graham Holt, 14 October 2005
Health Warning! The examiners deliberately try to avoid question spotting. Just because a question featured last time, doesn’t mean it won’t feature this time. Use the tips as areas to have a good look at, but remember that no one knows what is in the exam, apart from the examiner. Your safest bet is to achieve good syllabus coverage in your revision, as the examiner aims to do in the exam.
Paper 2.5i Exam Tips
ACCA Paper 2.5 (Global)
Part 2 - Financial Reporting
December 2006 Exam TipsFor each area described, please note the reference to useful questions from BPP’s Practice and Revision kit (P&R kit) (2006 edition) for the International Stream or UK Variant. We recommend you practise them all to get broad syllabus coverage.
Section A
Question 1
Section A will comprise one compulsory question that will examine group accounting. Group accounting is a core area and this question could ask you to produce a consolidated balance sheet and/or income statement (profit & loss account) with one subsidiary and possibly an associate or joint venture.
It usually includes adjustments for items such as: fair values, unrealised profit on inventories (stock) or tangible assets, cancellation of intragroup trading, goods/cash in transit, pre-acquisition dividends.
Part (b) of the question usually includes a related discussion element.
2006 P&R Kit Questions: Q52 Hanford (B/S), Q46 Hydrate (I/S and B/S), Q50 Holdrite (I/S with associate), Q55 Hapsburg (B/S with associate), Q51 Augment (joint venture).
Section B
Section B will comprise four questions out of which candidates should select three questions. The examiner, Steve Scott has stated that the style of the paper will remain fairly static:
Question 2
Question 2 will be preparation/restatement of an income statement (profit & loss account) and/or balance sheet. This question normally requires adjustments for current tax, depreciation, interest and dividends. Other adjustments may relate to debt factoring or other substance over form issues, leases, financial/capital instruments, revaluations, share issues, inventory (stock) valuation, government grants or deferred tax. There may be further disclosure requirements such as discontinued operations, movement in reserves or an earnings per share calculation.
2006 P&R Kit Questions: Q8 Chamberlain, Q28 Telenorth, Q35 Deltoid (also includes convertible debt), Q54 Bloomsbury.
Question 3
Question 3 will be a written question examining theoretical/conceptual areas or accounting standards. This could be on construction contracts, leases, provisions, inflation, intangible assets, accounting policies or substance over form issues with reference to the Framework for the Preparation and Presentation of Financial Statements (Statement of Principles).
2006 P&R Kit Questions: Q13 Dexterity (intangibles), Q26 Bodyline (provisions), Q31 Atkins (substance), Q57 Update (inflation). For other topics, see Question 5.
Question 4
Question 4 is likely to examine interpretation and/or cash flow statements. There could also be a discursive part on why, for example, related party or discontinued operations disclosures are useful.
2006 P&R Kit Questions: Q39 Planter (CFS), Q40 Bigwood (CFS and interps), Q63 Comparator (interps).
Question 5
Question 5 has no specified format or content and will cover other areas of the syllabus. The examiner frequently includes a 'mixed bag' question, which examines three or four different accounting standards.
Possibilities this sitting include: deferred tax, segment reporting, events after the balance sheet date, governments grants, financial/capital instruments, discontinued operations or substance over form issues.
2006 P&R Kit Questions: Q3 Derringdo (revenue and grants), Q7 Tintagel (accounts preparation & financial instruments), Q17 Linnet (construction contracts, segment reporting) (Q16 in UK kit), Q21 Bowtock (deferred tax, leases, events after the balance sheet date), Q27 IFRS 5 (INT kit only).
Relevant Articles (www.accaglobal.com/students)
Problems areas in group accounts
Steve Scott (Examiner), 30 May 2006
How to approach performance appraisal questions
Steve Scott (Examiner), 28 April 2004
First time adoption of International Financial Reporting Standards
Steve Scott (Examiner), 4 January 2005
Dealing with debtors
Graham Holt, 14 October 2005
Health Warning! The examiners deliberately try to avoid question spotting. Just because a question featured last time, doesn’t mean it won’t feature this time. Use the tips as areas to have a good look at, but remember that no one knows what is in the exam, apart from the examiner. Your safest bet is to achieve good syllabus coverage in your revision, as the examiner aims to do in the exam.
Paper 2.6 Exam Tips
ACCA Paper 2.6
Audit & Internal Review
December 2006 Exam TipsThe following list is an idea of the type of questions that may come up in the coming exam. The list highlights areas of the syllabus and how they may well be tested.
Suggested practice questions from the BPP Practice and Revision Kit (2006 edition) are shown after the relevant area. It is also worth reviewing the past exam questions mentioned to give you an idea of how a topic has been examined recently. These are easily available on the ACCA website (www.accaglobal.com/students).
• Internal audit/ Internal review – Following the new examiner’s article on how the internal audit department can assist in corporate governance and risk management, this area has been frequently tested. (In all papers, June 2006, December 2005 and June 2005). Note that in addition to a specific question on internal audit or reviews conducted by internal or external staff, questions could be in the form of a report to management on control weaknesses with recommendations, very similar in substance to that produced by an external auditor (see Systems and Controls below) (P&R kit practice: Q6 Internal Auditors, Q8 Roxy Hotels)
• Substantive testing – This will be in the exam, but what will be tested? In June 2006 Fixed (Non current) assets were tested. December 2005 covered inventories (stock). In June 2005 sales and tangible assets were tested. In December 2004 substantive testing of payroll balances was tested (Q4). In June 2004 inventories (stock) (Q3) and payables (creditors) and accruals (Q4) came up. In December 2003 payroll audit was tested (Q2). In June 2003, Inventories (stock) (Q2) and provisions were tested (Q3). In the December 2002 exam, payables (creditors) (Q3) and inventories (stock) were tested (Q5). In June 2002 cash was tested (Q2) and in December 2001 receivables (debtors) were tested (Q4). That would appear to leave bank/cash and receivables (debtors) and possibly another appearance of inventories as likely candidates for examination this time round. (P&R kit practice: Q42 Springfield Nurseries, Q49 Goodfoot & Q51 Villawood Computers)
• Systems and controls – Again this topic will be included in the exam in some format. In June 2006, the question covered the objectives of internal controls. In June 2005 Q3 was centred around a complex computer system. The examiner has warned that computers will be expected to feature in scenarios. In December 2004 Q3 risks from a scenario had to be spotted, and controls recommended. In June 2004, they came up in the context of outsourced catering and payroll (Q5). In December 2003 controls over payroll were tested in Q2 and Q1 included controls over business risks in the areas of human resources, procurement and marketing. In June 2003, controls over non-current (fixed) assets were tested (Q6). In the December 2002 exam the sales system was tested (Q2). In June 2002 the cash system was tested (Q2) and in December 2001 Purchases/ capital expenditure were tested (Q3). Any of these could come up again: the purchases/payables and sales/receivables systems looking the most likely. (P&R kit practice: Q36 Cosmo & Q34 Internal Control)
• Planning and risk assessment (from a scenario) – risk in one form or another comes up at most sittings. It is one of the key stages of the audit, but can also be examined in the context of a company's business risk as it was in June 2004. In December 2005, an audit planning memorandum, or audit strategy, was required. In June 2005 Q1 was a straightforward question looking for risks from a simple scenario. In December 2004, Q2 was centred around planning and the information you require, and Q1 was about spotting the risks of fraud and error. (P&R kit practice: Q20 EWheels & Q25 Nepco)
• Professional ethics – This is a core area examined in June 2006 (confidentiality) after a period away from the exam frm the previous 4 sittings. It is still a topical issue with all of the recent corporate collapses bringing the independence and professionalism of their advisors into question. Confidentiality came up again in December 2003 (Q6), conflicts of interest in June 2003 (Q3) and objectivity in December 2002 (Q1). Independence issues are still important and likely to be examined again at this sitting. (P&R kit practice: Q10 Billington Travel & Q11 Manly).
• Audit/ Assurance Reports – This is a very important area of the syllabus, it is deliverable from the end of all assurance engagements. You also need to be aware of the differences between internal audit reports/ external audit reports and other assurance reports such as review reports. It was tested in June 2005 as an unpopular optional question asking for errors in a given audit report. It has been tested in December 2003 (Q3 b and c), June 2003 (Q3c and Q5), June 2002 (Q3b) and December 2001 (Q5), but not in the last few sittings. (P&R kit practice: Q62 Audit Reports, Q65 Cremorne)
• Parts of questions – The following topics could form discrete parts of questions at this sitting: fraud, management representations, audit regulation, materiality, e-technology (see article below) so make sure you are up to speed on these areas.
Relevant Articles
The following articles can be found in the Student Accountant magazine (or ACCA website)
• Auditing manual and computerised systems, Alan Lewin, June 2006
• ISAs and SASs, Alan Lewin, March 2006
• The regulatory environment, Alan Lewin, 4 January 2005
• Audit risk in a brave new world, Namasiku Liandu, 30 September 2004
• Confirmation as audit evidence, Graham Cosserat and Katherine Bagshaw, 28 October 2003
• Electronic technology and the auditor, Katherine Bagshaw, 25 June 2003
• Service organisations, Katherine Bagshaw, 26 March 2003
• Internal audit and review reports, Katherine Bagshaw, 29 January 2003
• Corporate governance in the 21st century, Namasiku Liandu, 30 September 2002
• The independence of accountants, Namasiku Liandu, 10 June 2002
• The role of internal audit in risk management, Katherine Bagshaw, 1 March 2002
• Technique in auditing questions, Kim Smith, 4 September 2001
• Audit and internal review, Katherine Bagshaw, 1 June 2001
Health Warning! The examiners deliberately try to avoid question spotting. Just because a question featured last time, doesn’t mean it won’t feature this time. Use the tips as areas to have a good look at, but remember that no one knows what is in the exam, apart from the examiner. Your safest bet is to achieve good syllabus coverage in your revision, as the examiner aims to do in the exam.
Paper 2.6i Exam Tips
ACCA Paper 2.6
Audit & Internal Review
December 2006 Exam TipsThe following list is an idea of the type of questions that may come up in the coming exam. The list highlights areas of the syllabus and how they may well be tested.
Suggested practice questions from the BPP Practice and Revision Kit (2006 edition) are shown after the relevant area. It is also worth reviewing the past exam questions mentioned to give you an idea of how a topic has been examined recently. These are easily available on the ACCA website (www.accaglobal.com/students).
• Internal audit/ Internal review – Following the new examiner’s article on how the internal audit department can assist in corporate governance and risk management, this area has been frequently tested. (In all papers, June 2006, December 2005 and June 2005). Note that in addition to a specific question on internal audit or reviews conducted by internal or external staff, questions could be in the form of a report to management on control weaknesses with recommendations, very similar in substance to that produced by an external auditor (see Systems and Controls below) (P&R kit practice: Q6 Internal Auditors, Q8 Roxy Hotels)
• Substantive testing – This will be in the exam, but what will be tested? In June 2006 Fixed (Non current) assets were tested. December 2005 covered inventories (stock). In June 2005 sales and tangible assets were tested. In December 2004 substantive testing of payroll balances was tested (Q4). In June 2004 inventories (stock) (Q3) and payables (creditors) and accruals (Q4) came up. In December 2003 payroll audit was tested (Q2). In June 2003, Inventories (stock) (Q2) and provisions were tested (Q3). In the December 2002 exam, payables (creditors) (Q3) and inventories (stock) were tested (Q5). In June 2002 cash was tested (Q2) and in December 2001 receivables (debtors) were tested (Q4). That would appear to leave bank/cash and receivables (debtors) and possibly another appearance of inventories as likely candidates for examination this time round. (P&R kit practice: Q42 Springfield Nurseries, Q49 Goodfoot & Q51 Villawood Computers)
• Systems and controls – Again this topic will be included in the exam in some format. In June 2006, the question covered the objectives of internal controls. In June 2005 Q3 was centred around a complex computer system. The examiner has warned that computers will be expected to feature in scenarios. In December 2004 Q3 risks from a scenario had to be spotted, and controls recommended. In June 2004, they came up in the context of outsourced catering and payroll (Q5). In December 2003 controls over payroll were tested in Q2 and Q1 included controls over business risks in the areas of human resources, procurement and marketing. In June 2003, controls over non-current (fixed) assets were tested (Q6). In the December 2002 exam the sales system was tested (Q2). In June 2002 the cash system was tested (Q2) and in December 2001 Purchases/ capital expenditure were tested (Q3). Any of these could come up again: the purchases/payables and sales/receivables systems looking the most likely. (P&R kit practice: Q36 Cosmo & Q34 Internal Control)
• Planning and risk assessment (from a scenario) – risk in one form or another comes up at most sittings. It is one of the key stages of the audit, but can also be examined in the context of a company's business risk as it was in June 2004. In December 2005, an audit planning memorandum, or audit strategy, was required. In June 2005 Q1 was a straightforward question looking for risks from a simple scenario. In December 2004, Q2 was centred around planning and the information you require, and Q1 was about spotting the risks of fraud and error. (P&R kit practice: Q20 EWheels & Q25 Nepco)
• Professional ethics – This is a core area examined in June 2006 (confidentiality) after a period away from the exam frm the previous 4 sittings. It is still a topical issue with all of the recent corporate collapses bringing the independence and professionalism of their advisors into question. Confidentiality came up again in December 2003 (Q6), conflicts of interest in June 2003 (Q3) and objectivity in December 2002 (Q1). Independence issues are still important and likely to be examined again at this sitting. (P&R kit practice: Q10 Billington Travel & Q11 Manly).
• Audit/ Assurance Reports – This is a very important area of the syllabus, it is deliverable from the end of all assurance engagements. You also need to be aware of the differences between internal audit reports/ external audit reports and other assurance reports such as review reports. It was tested in June 2005 as an unpopular optional question asking for errors in a given audit report. It has been tested in December 2003 (Q3 b and c), June 2003 (Q3c and Q5), June 2002 (Q3b) and December 2001 (Q5), but not in the last few sittings. (P&R kit practice: Q62 Audit Reports, Q65 Cremorne)
• Parts of questions – The following topics could form discrete parts of questions at this sitting: fraud, management representations, audit regulation, materiality, e-technology (see article below) so make sure you are up to speed on these areas.
Relevant Articles
The following articles can be found in the Student Accountant magazine (or ACCA website)
• Auditing manual and computerised systems, Alan Lewin, June 2006
• ISAs and SASs, Alan Lewin, March 2006
• The regulatory environment, Alan Lewin, 4 January 2005
• Audit risk in a brave new world, Namasiku Liandu, 30 September 2004
• Confirmation as audit evidence, Graham Cosserat and Katherine Bagshaw, 28 October 2003
• Electronic technology and the auditor, Katherine Bagshaw, 25 June 2003
• Service organisations, Katherine Bagshaw, 26 March 2003
• Internal audit and review reports, Katherine Bagshaw, 29 January 2003
• Corporate governance in the 21st century, Namasiku Liandu, 30 September 2002
• The independence of accountants, Namasiku Liandu, 10 June 2002
• The role of internal audit in risk management, Katherine Bagshaw, 1 March 2002
• Technique in auditing questions, Kim Smith, 4 September 2001
• Audit and internal review, Katherine Bagshaw, 1 J