ACCA DEC 2008 EXAM TIPS

FTC Tips for Dec 2008 ACCA Examination

F4 – Corporate & Business Law (English variant)
English legal system
• Delegated legislation/interpretation of statutes
Obligations
• Formation and terms of a contract. Duty of care in tort or professional negligence
Employment
• Dismissal
Company law
• Incorporation procedure or articles
• Maintenance of capital
• Termination of directors office and directors powers
• Types of meetings and resolutions
• Fraudulent behaviour - Money Laundering

F5 – Performance Management
• Budgeting
• Learning curves
• Variances, possibly including mix and yield
• Performance measurement including financial and non financial performance indicators
• Transfer pricing or ROCE/ RI
• Throughput accounting

F6 – Taxation (UK)
Question 1 [25 or 30 marks]
• Income Tax
• Income from employment [in particular, the assessable income, benefits and allowable
deductions.]
• Income from self employment [in particular, the basis of assessment, allowable
expenditure, assessable profits on commencement and cessation, capital allowances
and relief for trading losses.]
• Property and investment income [in particular, property business profits, savings
income and dividend income.]
• The computation of taxable income and income tax liability
• The self assessment system [in particular, the time limit for submission of information,
claims and payment of tax.]

Question 2 [25 or 30 marks]
• Corporation tax
• Profits chargeable to corporation tax [in particular, the allowable expenditure in
calculating the tax adjusted trading profit, capital allowances, property business profits,
and relief for trading losses.]
• Computation of corporation tax liability
• Gains group aspect
Question 1 or 2 might include a small element of chargeable gains.
Value Added Tax [10 marks]
A minimum of 10 marks will always be allocated to VAT which will be examined either as part
of Question 1 or 2.
The VAT element will be self contained and so can be answered on its own.
• The computation of VAT liabilities [in particular, the tax point, valuation of supplies,
non deductible input VAT, relief for impairment losses on trade debts]
• Default Surcharge
• The annual accounting scheme.

Question 3 [20 marks]
Capital Gains Tax
• Computation of capital gains
• Computation of the amount of allowable expenditure for a part disposal
• Computation of a chargeable gain on disposal of a chattel
• Computation of exemption when PPR is disposed
• Share identification rules - Individuals
• Exemptions and reliefs [in particular rollover and holdover relief]
• Computation of capital gains tax payable by Individuals [in particular the calculation of
taper relief.]

Question 4 [15 marks]
Some aspect of Income Tax or Corporation Tax not examined within question 1
Question 5 [10 marks]
Some aspect of Corporation Tax or Income Tax not examined within question 2
Partnerships [with explanation of loss relief]
Corporation tax loss relief
Change of accounting date
National Insurance contributions - will not be examined as a separate question, but may
be examined in any question involving income tax or corporation tax.

F7 UK – Financial Reporting (UK variant)
Question 1
Consolidation possibly 3 company B/S or 2 company P/L and B/S
FV adjustments to both purchase consideration and subsidiaries net assets, inter-co loan and PURP.

Question 2
Preparation of published accounts from TB to include P/L, STRGL and B/S - possible transactions, depreciation, revaluation, income tax and deferred tax, lease, development costs.

Question 3
Possible mixed interpretation question to include calculation of a basic cash flow statement and a report to include calculation of ratios and interpretation of the accounts using the cash flow and ratio results.

Question 4 and 5
Long-term contracts, ASB Statement of Principles (elements or qualitative characteristics), Impairment or Provisions.

FTC Exam Tips for F8 Audit and Assurance DEC 2008
Tips include:
Identify and explain / address risks in a scenario
Substantive tests on debtors/receivables, stock/inventory
Weaknesses in internal controls and recommendations (sales, payroll)
Types of assurance assignments
Completion – overall review
Confidentiality and conflicts of interest
Role of internal audit, reliance by external auditors

F9 – Financial Management
• Investment appraisal - NPV/IRR with tax, inflation and working capital is a favourite topic of the examiner, although areas not examined to date include payback, replacement analysis, capital rationing and lease v buy.
• Working Capital Management - receivables are traditionally the most popular topic but payables and cash are due a turn.
• Cost of Capital – given recent articles CAPM, its advantages and disadvantages, and its use in calculating a cost of equity and a risk-adjusted WACC must be expected.
• Risk Management - hedging foreign exchange risk
• Business Finance - gearing/capital structure calculations and comment
• Valuations - asset and cash flow based values

P1 – Professional Accountant
Section A: Compulsory
• always covers range of syllabus areas
• some element of ethics in this question
Section B: 2 from 3
• one question solely on governance
• one question with significant ethics element
Key topics – in section A or B:
• internal audit: independence or appointment (possibly via audit committee)
• remuneration committee
• directors induction and / or appraisal
• ethical decisions: AAA or Tucker
• stakeholder categorisation
• normative / instrumental views of stakeholders
• board structure: family / insider or unitary / two tier
• Corporate Social Responsibility (CSR)
• sound internal controls

P2 INT – Corporate Reporting (International variant)
Compulsory group question within part A could be:
• Cashflow (not examined under the new syllabus, but in the pilot paper)
• Group income statement which will examine aspects of IFRS 3 revised (goodwill and NCI at fair value)
• Accounting for changed shareholdings in group structure
Within the compulsory question, there may also be some explanation and application of ethics and/or a written element which includes IFRS 3 revised.
Multi-topic question to include aspects of:
• Impairments
• Share-based payment
• Financial instruments
• Retirement benefits
• Discontinued and held-for-sale
• Deferred tax
• Provisions and events after the b/s date
Current issues:
• Retirement benefits – Discussion Paper within examinable documents
• Financial Instruments – Discussion Paper within examinable documents
• IFRS 3 Revised
• Harmonisation of international standards

P3 – Business Analysis
Section A
• Question 1 will still focus mainly on the strategic planning process. Key areas may be:
? SWOT
? Ansoff
? Acquisition
• Also expect an implementation issue such as culture or change management
Section B
• If culture and/or change management do not appear in the compulsory question then they may appear in the option questions
• Other areas may be:
? TQM
? Supply chain management
? Choosing & evaluating an IT system

P4 – Advanced Financial Management
Section A
• Business valuation (various methods, with pros and cons)
• Option pricing – Black Scholes model
Section B
• Interest rate hedging (futures and options), bond pricing and credit spreads
• Stakeholders and conflict of objectives
• Investment appraisal – with foreign currency

P5 – Advanced Performance Management
• Corporate failure as per recent article (July 08)
• Pricing (transfer pricing)
• Strategic planning and gap analysis
• Performance measures for both private and public sector
• Environmental management accounting

P6 – Advanced Taxation
- IHT vs CGT for lifetime gifts
- Sole trader/partnership cessation (IT, NICs, CGT and VAT), possibly with incorporation
- Lease versus buy for assets
- Employed versus self-employed (IT and NICs)
- Badges of trade (IT vs CGT)
- Trusts (not a whole question)
- Corporation tax – possible areas:
-R&D
-SSE
-Expansion overseas/CFCs
-Group reorganisations
-Liquidations
- Overseas aspects of personal tax
- VAT group registration
- Ethics (up to 5 marks)

P7 – Advanced Audit & Assurance (UK & INT variant)
Core areas of the syllabus expected to be examined in every sitting:
• Engagement planning and risk (audit risk likely this sitting);
• Gathering evidence;
• Ethics/professional issues; and
• Engagement reporting (particularly audit qualifications).
Subject of recent articles:
• Forensic investigations and audit (September 2008). (Likely to include elements of planning
and/or gathering evidence similar to question 2 of pilot paper).
‘Peripheral topics’ from exam approach article yet to be covered:
• Regulatory framework;
• Obtaining professional work; and
• Corporate governance.