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SEPT 2017
by Publisher 12 days ago



As any syllabus area could be tested in sections A & B the best advice is to study
all areas of the syllabus.
For section C expect (but not limited to) planning and operational variance, mix
yield variances & evaluation of the company performance (either as a whole or on
a divisional basis).
There is no longer any formal reading and panning time at the start of the exam.
You are strongly advised to plan answers to section C questions before starting to
write. Ensure to make reference to the scenario in your answer!
The exam is approx. 40% calculation and 60% discussion so doing the maths
wont be enough to pass this paper. Interpretation and application are crucial,
especially in section C.

Expect at least a couple of the OTs to be devoted to the administration of income
tax and corporation tax. So, you have to be comfortable with the following:
* Due dates for the payment of income tax (including payments on account).
* Due dates for the payment of corporation tax (including instalments for large
* Filing dates for the income tax and corporation tax returns.
* Penalties and interest for late payments and returns.
Also likely to be tested in section A are:
* VAT rules on registration, impairment loss (bad debt) relief, and SME schemes
relating to cash accounting, annual accounting and flat-rate schemes.
* IHT due to lifetime transfers both in the donors life and on death.
* Statutory residence test for individuals.
* Identification of groups of companies for corporation tax loss reliefs and gains.
* Trading loss reliefs for both companies and sole traders.
Section B see section A and think longer scenario!
At least 50% of your revision time has to be spent answering section C questions
in the practice and revision kit.
Remember to learn the income tax and corporation tax proformas.
Calculations which require no more than two or three entries into your calculator
can be included on the face of your proformas (eg time apportioning a salary).
Calculations which are more complex (eg company car benefits) need separate
workings which are properly referred (W1, W2, etc) and have a heading.
Make sure to attempt the narrative parts of the requirement aim for as many
sentences as there are marks with each sentence containing something technical.
Keep your paragraphs to no more than three sentences long.
The two longest questions will focus on income tax and corporation tax. These
are likely to include the following:
* Employment benefits.
* Property income.
* Adjustments to profit to arrive at trading income for both companies and sole
traders in past sittings we have seen a number of questions whereby you have to
correct errors in computations included in the scenario.
* Relief for pension contributions.
* Capital allowance computations.

Section A a wide range of topics including several on consolidation and
interpretation of financial statements. And expect a few questions on nocore
areas such as inflation, & specialised entities.
Section B scenario will usually consist of two/three calculations and two/three
narratives. The questions are not dependent on each other and can be answered
in any order.
Longer questions two 20 mark questions, one covering interpretations and the
other preparation of financial statements.
* One question likely to be in context of a single company and one in the context
of a group, so you could have a single company interpretation and a groups
preparation or vice versa.
* An accounts prep question may include extracts or stand alone calculations or
full statements of profit or loss and other comprehensive income and/or statement
of financial position.
* Both questions will cover the accounting for items from other areas of the
* May include a short separate part, eg with a statement of changes in equity,
statement of cash flows extract, earnings per share calculation or linked written
* A consolidation question would include one subsidiary and often an associate,
with adjustments, eg fair values, deferred/contingent consideration, PUP on
inventories/PPE, interagroup trading and balances, goods/cash in transit.
* A single entity question could be preparation from a trial balance or restatement
of given financial statements with the usual adjustments for depreciation,
revaluation and current/deferred tax (including deferred tax on revaluations) plus
a mixture of adjustments on other syllabus area, eg leases, substance over form
issues, financial instruments (change in fair value or amortised cost), share
issues, government grants, inventory valuation, revenue recognition ort
construction contracts.
* Interpretation questions are unlikely to be straightforward and you should be
prepared to analyse a group or a single company with a significant change in the

Section A each mini-case question will test syllabus area A, B, C, D or E. Expect
questions to focus on syllabus areas A and E.
Section B Q16 one 30 mark question. Q17, Q18 two 20 mark questions.
The majority of marks in each question will test syllabus areas B, C and/or D.
Q16-18 expect:
* Audit planning.
* Audit risk (identification & explanation of audit risks from a scenario and
explanation of the auditors response to each risk).
* Internal audit.
* Internal controls (identification & explanation of deficiencies in internal control
and the recommendation of suitable internal controls r description of test of
* Audit procedures (both substantive procedures and tests of control).

Section A the MCQs/OTs will often be knowledge based and will out the
questions in section B and C. Likely to be a good number of questions testing
your understanding of financial management and objectives (ratio analysis, the
concept of shareholder wealth), as well as the economic environment and
financial institutions topics (financial intermediation, fiscal and monetary
policies). The efficient hypothesis is likely to be tested here too.
Section B commonly tested areas are:
* Working capital management operating cycle, the impact of a change in credit
period or accepting a factors offer.
* Business or security valuations methods of valuation.
* Financial risk management currency risk or an interest rate risk.
Section C two 20-mark questions, which will focus mainly on syllabus section C,
D and E.
Section C is working capital management, section D is investment appraisal and
is likely to feature NPV with inflation and tax. Section E is business finance
either an evaluation of financing options (interest coverage & gearing ratios) or a
cost of capital calculation most likely.
Whichever of these three topics does not feature in section C is likely to appear in
section B.
Section As compulsory 50-marker uses a lengthy scenario, often based on real-
life events, tests all three main syllabus areas. Typically consists of four written
requirements, some of which may be broken down into smaller sub-requirements.
The 4 professional marks are available for producing some form of written
communication (briefing note, press release or letter to shareholders).
Due to the typical size of the compulsory scenario BPP advise PQs that you use
the notional 15 minutes (now part of the 3 hour 15 minute exam) to plan this
question above all others.
Recent exams have tested content from the examiners technical articles (such as
June 2015 on corporate social responsibility (CRS) strategy& strategic CSR) so
ensure you are familiar with any new articles.
Expect to see the use of stakeholder, ethical and other CSR theories applied to
scenarios, as well as the use of risk, control and governance syllabus content
especially relating to board directors, remuneration and reporting.
Test yourself with past-papers, especially those focussing on dysfunctional
behaviour in areas such as bribery & corruption, environmental risk or poor
ethical stance.
Section A is the 50-mark compulsory case study and will include a preparation
statement of financial position and/or a group statement of profit of loss and other
comprehensive income or statement of cash flows which may include foreign
subsidiary, discounted activities, disposals and/or acquisitions. This will include
other accounting complications such as financial instruments, pensions, share-
based payment and impairment.
There will also be discursive requirements on a linked accounting adjustment and
social/ethical/moral aspects of corporate reporting.
Section B
Q2 & Q3: One multi-part question covering a range of topics or a theme such as
fair value measurement (see exam team article), deferred tax, foreign currency
transactions, financial instruments, pensions, share-based payment, non-current
assets (recognition and/or impairment of tangible and intangible assets),
borrowing costs, the effect of accounting treatments on earnings per share or
The other, an industry-based question testing a range of standards such as
accounting policies and the framework, leases, grants, IFRS for SMEs,
reorganisations, provisions, events after the reporting period and related parties.
Q4: A discussion question looking at current developments in corporate reporting
and problems with existing standards, such as capital reporting (see 2 exam team
articles), leasing, revision of the conceptual framework, classification in profit or
loss vs OCI (see exam team article), improvements to disclosure, regulatory
issues over adoption and consistent application of IFRSs, implementation issues,
application of the definition of control and significant influence (equity
accounting), improvement in performance measurement, integrated reporting (see
exam team article), revenue recognition (see exam team articles). It will also
normally include a related computational part based on figures from a case study.
One of these questions can also include elements of group accounting, especially
if Q1 is a statement of cash flow question.
General advice: Dont spend too much time on numerical parts at the expense of
the written bits! It is often easier to pick up marks in written questions than in
complex numerical ones. Work on the basis of 1 mark per well-explained point for
written questions.
Section A will be a compulsory case study question with several requirements
relating to the same scenario information. This section continues to consume time
in reading and absorbing 3 pages of text and number are becoming the norm.
Dont underestimate the importance of practising 50-mark questions not only from
a knowledge perspective, but also from a time management and effort
perspective too.
Section B are more likely to examine discrete subject areas. Sorry, but you need
to know all the key areas of the syllabus.

Q1: expect section A questions to be mainly based on core syllabus areas such as
project appraisal (domestic or overseas) and business valuations. Both of these
areas are likely to include cost of capital calculations. Rick management may also
feature as an asoects of this question in a number of different ways, eg value at
risk, real options, hedging, risk mapping.
Q2-4: Risk management (currency or interest rate; business reorganisation; and
real options are the tips here.
In section B one question may be entirely discussion based (but this is not
guaranteed from June 2013), and often involves ethical and general financing
issues (eg dividend policy).

In recent exams Q1 has often required a significant level of data analysis using
numerical techniques, eg KPIs, EVA. You are aiming to turn data into information
NOT to produce complicated calculations. Nevertheless any numerical techniques
in this paper (eg transfer pricing, ratios, analysis of quality related costs, ABC)
need to be mastered.
Performance management frameworks (eg building blocks, performance pyramid
or the balanced scorecard) are also commonly tested in Q1. You must understand
the purpose and limitations of these models and must ensure you can apply them
in a practical way.
Q2-4: In section B commonly tested areas include quality management,
information reporting (eg CSFs and KPIs), the application of strategic models
(such as PEST, Porters 5 forces, the value chain), HR frameworks (eg reward &
appraisal systems), risk management, and environmental management
keep checking the ACCA website for articles in the lead up to the exam (eg recent
articles on complex business structures, big data, integrated reporting and
performance management models (BCG & 5 forces).

The whole syllabus is examinable, but the topics we would expect to see are:
* Groups of companies involving overseas aspects and losses.
* Unincorporated business particularly loss relief or involving a partnership, basis
period rules should also be expected.
* Capital gains tax versus inheritance tax including availability of reliefs.
* Overseas aspects of income tax, CGT, IHT or corporation tax.
* Personal service company.
* Share schemes.
* Company purchase of own shares.
* Enterprise investment schemes/ Seed EIS/venture capital trusts.
* Takeover.
* VAT partial exemption or land and buildings or transfer of a going concern or
overseas transactions.
* Transfer of trade versus sale of subsidiary.
* Disincorporation relief.
* Pension contributions.
*Patent box, research and development expenditure.
Typically Q1 will test planning, risk assessment, evidence gathering and practice
management issues using a scenario where audit client details are presented,
often including financial statement extracts.
Topics covered by Q2 will be more uncertain to predict possibly a non-audit
engagement such as prospective financial information (PFI) or due diligence, or a
question testing specific parts of the syllabus, such as audit completion or
consolidated groups.
Section B typically tests the following syllabus areas: audit evidence and financial
reporting issues, practice management including ethics and quality control and
reporting, including completion and communication.
Recent exams have tested fresh content from the examiners technical articles: for
example key audit matters were examined in December 2016, while INT candidates
were tested on the audit of public sector performance information in December