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ACCA June 2018 exam tips - P1 to P7

01 June 2018

BPP’s June 2018 tips are…

*Check out all new published articles. Recent exams have tested content from the examiner’s technical articles, as with March 2018 and the transaction cost theory.
Expect to see:
* Use of stakeholder, ethical and other CRS theories applied to scenarios.
* Use of risk, control & governance syllabus content, especially relating to board directors, remuneration and reporting.
* Focus your past-paper practice on dysfunctional behaviour in areas such as bribery and corruption, environmental risk or poor ethical stance.

Section A
* This will be a 50-mark case study including the preparation of a group statement of financial position, statement of profit of loss and other comprehensive income or statement of cash flows, which may include discounted activities, disposals and/or acquisitions or foreign subsidiary. Expect other accounting complications such as group adjustments, financial instruments, pensions, share-based payments and impairments.
*Discursive requirements on a linked accounting adjustment, and social/ethical/moral aspects of corporate reporting.
Section B
* Could see fair value measurement (see examiner’s article), revenue recognition (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, nature of business combinations, the effect of accounting treatments on earnings per share or ratios.
* Other question industry-based testing range of standards – accounting policies and framework, leases, grants, IFRS for SMEs, reorganisations, provisions, events after the reporting periods and related parties.
* Q4 looking at current developments in corporate reporting and problems with existing standards. Think foreign exchange (article), measurement and revision of the conceptual framework (article), classification in profit or loss vs OCI (article), leasing, equity accounting, integrated reporting (article), performance measurement, regulatory issues over adoption and consistent application of IFRSs.
*One of these questions can also include elements of group accounting, especially if Q1 is a statement of cash flows.

* Think core areas of the syllabus here. So that’s project appraisal (domestic or overseas), business valuations and business/financial reorganisations.
*These areas often include cost of capital calculations.
* Rosk management could feature in a number of ways – value at risk, real options, hedging and risk mapping.
* Risk management (currency or interest rate).
* Dividend policy and general financing issues.
* Real options.

* In recent exams this Q has often required a significant level of data analysis using numerical techniques such as KPIs, EVA.
* You need to have mastered the numerical techniques such as transfer pricing, ratios, analysis of quality related cost, and ABC. But remember the examiner wants the data turned into information not a lot of complicated numbers!
* Performance management frameworks – building blocks, performance pyramid or the balanced scorecard.
* Quality management, information reporting (CSF and KPIs), the application of strategic models (PEST, Porter’s 5 forces, the value chain), HR frameworks (reward & appraisal systems), risk management and environmental management accounting.
* Check out the recent articles on complex business structures, big data, integrated reporting and performance management models (BCG & 5 forces).

Section A
* One of these questions will focus on personal tax issues and the other on corporate tax.
Section B
Expect to see quite a lot, including:
*Groups of companies involving overseas aspects and losses.
* Unincorporated business particularly loss relief or involving partnership, basis period rules should also be expected.
* Capital gains tax vs IHT, including available reliefs.
* Overseas aspects of income tax, capital gains tax, IHT or corporation tax.
* Personal service company.
* Share schemes.
* Company purchase of own shares or liquidations.
* Enterprise investment schemes/Seed EIS/venture capital trusts.
* Takeovers.
* VAT – partial exemption or land and buildings or transfer of a going concern or overseas transactions.
* Transfer of trade vs sale of subsidiary.
* Disincorporation relief.
* Pension contributions.
* Patent box, research and development expenditure.

Section A
* Typically Q1 will test planning, risk assessment, evidence gathering and professional issues where details of an audit client (remember it could be a group) are presented, often with financial statements extracts for analysis.
* Topics covered by Q2 will be more uncertain – possibly a non-audit engagement such as prospective financial information (PFI) or due diligence, or a Q testing quality control.
* Don’t forget the professional marks here.
Section B
* Expect the following syllabus areas to be tested: audit evidence and financial reporting issues, practice management, including ethics and reporting (completion & communication).
* Recent exams have tested fresh content. For example the evaluation of misstatements was examined in December 2017. You must read the three most recent articles too covering ethics, risk and accounting issues.

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