F1, F2, F3
Since these exams are multiple choice it is not possible to give specific tips as the papers effectively cover the breadth of the syllabus - no topics can be ruled out. The key to success on all three papers is to practice as many mock exams as possible. When you attempt a mock exam do not guess any of the questions. Instead, make a note of it and move on to the next question. Mark the exam when you are finished and any questions that were left unanswered or you got wrong find the answer in your text book, read the whole chapter and make notes.
Courts and sources of law.
Contract- consideration, exclusion clauses.
Articles of Association.
Capital (including debentures).
Criminal law e.g. Insider dealing , money laundering etc.
Costing systems - ABC, throughput accounting and the theory of constraints.
Short term decision making: CVP analysis, limiting factors.
Budgeting and variance analysis (calculations).
Budgetary systems ( ABB, ZBB etc) and behavioural aspects of budgeting.
Performance measurement - divisional performance, ROCE vs RI.
Corporation tax: Basic computation with capital allowances and profit adjustments; due dates for submission of tax returns and penalties for late submission. Possible group relief/transfer of group gains or losses.
Calculating the VAT due for a quarter, default surcharges for overdue returns.
Individual tax: Employee benefits and pension contributions. Calculation of an income tax liability.
Capital gains tax: A mixed bag of topics; shares, gift relief, transfers between husband and wife, compensation receipts with some gains qualifying for entrepreneur relief.
A mixed question involving the trader; short computations on assessments, partnerships and change of accounting date.
Overseas aspects of a company; double tax relief, branches and subsidiaries, transfer pricing and VAT on imports and exports.
A general inheritance tax question.
Badges of trade problem question with a calculation of the results either as a trading or capital gain.
Q1 Consolidated SPL and OCI and Statement of Financial Position (with acquisition during the year).
Q2 Published financial statement (possibly adjusted rather than from a trial balance).
Q3 Cash flows and interpretation (including some ratios).
Qs 4 and 5 aspects of the conceptual framework and greater focus on the following standards:
- IAS 12 (deferred tax).
- IAS 17 (leases).
- IAS 18 (revenue) linked with IAS11 (construction contracts).
- IAS 38 (intangible assets).
- IFRS 5 (non-current assets held for sale and discontinued operations).
The exam will cover a wide range of areas from the syllabus and so students should have a good overall knowledge. No-one knows what will come up – but particular areas to pay attention to are:
Internal controls and substantive procedures - usually come up (perhaps Bank & Cash / Liabilities).
Written representations & audit reports.
Relevant & reliable evidence.
Other areas - ISA 402/ISA 720/going concern (recent technical article).
Investment Appraisal: NPV including identification of relevant cash flows, tax saved on capital allowances, inflation and nominal cost of capital.
Calculation of a project specific cost of capital and discussion.
Special investment decisions: lease or buy.
Working Capital Management: Working Capital characteristics of different businesses and the working capital cycle.
Overcapitalisation vs overtrading.
All aspects of receivables management including credit control, discounts and factoring.
Sources of finance and cost of capital.
Theories of Capital structure (Modigliani and Miller).
Dividend growth model vs market value discussion.
Foreign exchange risk management.
Q1 Complex group OR group cash flows plus manipulation of financial
information and related ethical issues.
Q2 Case study on investments: IFRS10/11, IAS28(2011) & IFRS9/13 if Q1 is cash flows OR case study on deferred tax (IAS12).
Q3 Mixed scenario on accounting standards: IAS19/21/24 & IFRS5.
Q4 Essay on application of Framework's "faithful representation".
Section A (compulsory case study)
PEST and Five Forces analysis.
Success criteria...suitability, acceptability, feasaibility...to be applied.
Some financial calculations and their implications.
Porter’s competitive advantage - generic strategies and the diamond.
Foreign direct investment (NPV, MIRR, project duration).
Project specific cost of capital.
Adjusted present value.
Black Scholes option pricing.
Financial and corporate reconstruction.
Currency futures and options.
Impact of external factors on strategy and performance.
The role of performance management systems in business integration - value chain and McKinsey’s 7S’s.
ROI, RI and EVA.
Not for profit organisations - value for money.
A company with UK and foreign subsidiaries; double tax and group relief; controlled foreign companies and branches. VAT on imports and exports.
An individual trader starting to trade after acquiring a business; loss reliefs, reliefs for capital expenditure including VAT; sales of assets to provide funds for business development. Cash and annual accounting.
Gifts of shares and share buybacks.
Employment tax issues including share schemes.
Gifts, inheritance tax and overseas issues.
Planning & Groups.
Ethics with quality control & assurance reporting.
Audit reports - other information.