English legal system - court structure, court vs tribunal.
Contract law - exclusion clauses, intention to create legal relations.
Tort of negligence - general negligence, professional misstatement.
Employment law - common law duties, dismissal.
Agency/partnership - how agency relationship arises, termination of partnership.
Company law - separate personality/lifting the veil, company registration, class rights.
Fraudulent behaviour - insider dealing, bribery.
• Throughput accounting and TOC.
• Learning curves.
• Variances - Sales Variances, market size and market share.
• Decision Trees.
– joint investment income
– adjustment of profits
– national insurance
– chargeable gains to calculate, with rollover relief
– group loss relief – with some tax planning
– interest on late payment of corporation tax
– VAT registration – futures test
– cash accounting scheme
– default surcharges
Capital gains tax
– Transfer between spouses
– Incorporation relief
– PPR, gift and entrepreneurs’ relief
Q1: Consolidated statement of comprehensive income and consolidated statement of financial position with adjustments to include: PURP, share exchange, current accounts, impairment, revaluation, fv adj.
Q2: Published accounts to include: statement of comprehensive income, statement of financial position and SOCIE from TB. Possible adjustments to include: revenue recognition, depreciation, revaluation, tax & deferred tax.
Q3: Ratios with interpretation.
Q4/Q5: Qualitative characteristics, finance leases, tangible & intangible assets, government grants.
• Audit risk including analytical procedures.
• Systems: purchasing/sales (including tests of control).
• Evidence: purchases/payables; share capital/directors transactions.
• Specific standards/topics:
− communicating with those charged with governance (ISA 260/265).
− materiality (ISA 320).
− external confirmations (ISA 505).
• Completion (ISA 580 – written representations)
• Auditor’s reports
Investment appraisal: this is a key topic which is highly likely to be examined every time. The most common technique assessed is NPV with inflation and taxation although be prepared for a twist.
Working Capital Management: exams to date have covered much of this topic but it’s been a while since we’ve seen the more numerical aspects surrounding inventory or payables management.
Valuations: cash flow based values have yet to be examined
Business Finance: make sure you’re able to discuss the impact that different policies may have on company by being able to both calculate and interpret financial ratios.
Cost of Capital: it’s been a while since we’ve seen any of the more technical CAPM based calculations regarding de-gearing and re-gearing betas.
• Corporate governance: stock exchanges.
• Ethical theories – Absolutism.
• Internal control failures.
• Transaction cost theory.
• Sustainability – Social and environmental footprints.
Question 1: Group statement of cash flows plus ethics, possibly including inappropriate application of IFRS 10 and/or accounting errors.
Other questions: Content of Questions 2, 3 and 4 can come from any part of the syllabus.
Possible topics which may be examined include:
• Employee benefits and share option schemes.
• Financial instruments.
• Foreign currency.
• Fair value measurement.
• Decision trees.
• Strategic change.
• Strategy evaluation.
• Benefits realisation.
Interest rate hedging
The Eurozone debt crisis
• Building block model linked to CSFs.
• Importance of political factors in performance management.
• Evaluation of a performance management system.
• Corporate failure.
• Divisional performance appraisal and transfer pricing.
- Capital gains groups: NGNL and rollover relief.
- Degrouping charges.
- Overseas aspects: branch vs sub/CFCs/transfer pricing.
- Reliefs: Rollover, holdover, gift, PPR and letting.
- Lifetime gifts.
- Valuation of shares.
- Death estate computation.
- Sole traders opening year rules, trading losses.
- Self assessment admin: payment by instalment, new penalty regime.
- Income tax comps at marginal rates, possible overseas income.
- Partial exemption.
- Land and buildings.
Core areas likely to be examined in every paper:
• Engagement planning and risk assessment.
• Engagement procedures.
• Ethics and professional issues.
• Completion (matters to consider/evidence on file) and engagement reporting.
• Subsequent Events (ISA 560).
• Review engagements.
• Obtaining work.
• Competition in the statutory audit market.
• Improving the audit report.
Please note: these are for the INT variant. The UK variant is likely to additionally include an aspect of Insolvency.