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More ACCA exam tips...

19 February 2018

BPP's ACCA March 2018 exam tips

F5
For section A & B learning the whole syllabus appears to be everyone’s/the only tip!
Sitters are ‘strongly advised’ to plan answers to section C before starting to write. And, when writing make sure you make reference to the scenario in your answer.
Section C expected areas are: budgetary systems, planning and operational variances, mix and yield variances and evaluation of the company performance (either as a whole or on a division basis).
Expect the unexpected – since the introduction of MCQs this advice is even more critical because more topics are tested.
Expect the exam to be 40% calculation and 60% discussion. That means its not sufficient to just be able to perform all of the calculations.
Interpretation and application are crucial, especially in section C.

F6
Section A: expect a couple of the OTs to be devoted to the administration of income tax and corporation tax.
You also have to be comfortable with quite a lot of other stuff too, including:
*Due dates for payment of income tax (including payment on account).
*Due dates for the payment of corporation tax (including instalments for large companies).
*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 of the exam are:
*VAT rules on registration, impairment loss (bad debt) relief, and the SME schemes relating to cash accounting, annual accounting and flat-rate schemes.
*IHT due to lifetime transfers both in the donor’s life and on death.
*Statutory residence tests for individuals.
*Identification of groups of companies for corporation tax loss reliefs and gains.
*Trading loss reliefs for both companies and sole traders,
At least 50% of your revision time has to be spent answering section C questions.
Remember to learn your income tax and corporation tax pro formas.
Calculations which require no more than 2/3 entries into your calculator can be included on the face of your proformas (eg time apportioning a salary). Calculations that are more complicated (eg company car benefits) need separate workings which are properly referenced (W1, W2, etc) and have a heading.
Aim for as many sentences as there are marks with each sentence containing something technical.
Keep your paragraphs to no more than 3 sentences long.
The two longest questions will focus on income tax and corporation tax. They are likely to include the following:
*Employment benefits.
*Property income.
*Relief for pension contributions.
*Adjustments to profit to arrive at trading income for both companies and sole traders – in past questions you had to correct errors in computations.
*Capital allowance computations.

F7
Section A
Expect questions to include several on consolidation and interpretation of financial statements.
When it comes to non-core areas think inflation and specialised entities.
Long form questions – one will cover interpretations and the other preparation of financial statements.
One question is likely to be in the 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 preparation questions may include extracts or standalone calculations or full statements of profit or loss and other comprehensive income and/or statement of financial position.
Both questions will cover items from other areas of the syllabus.
There may be a short separate part, eg with a statement of changes in equity, statement of cash flows extract, earnings per share calculation or linked written topics.
A consolidation question would include one subsidiary and often an associate with adjustments, eg fair values, deferred/contingent consideration, PUP on inventories/PPE, intragroup trading and balances, goods/cash in transit.
A single entity question could be preparation from a trail balance or restatement of given financial statements with the usual adjustments for depreciation, revaluation and current/deferred tax (including deferred tax on revelations) plus a mixture of adjustments on other syllabus areas, eg leases, substance over form issues, financial instruments (change in fair value or amortised cost), share issues government grants, inventory valuation, revenue recognition or construction contracts.

F8
In Q16 & 18 expect:
*Audit planning.
*Audit risk (identification and explanation of audit risks from a scenario and explanation of the auditor’s response to each risk.
*internal audit.
*Internal controls (identification and explanation of deficiencies in internal control and the recommendation of suitable internal controls or description of test of control).
*Audit procedures (both substantive procedures and tests of control).
Try to use a tabular format in your solutions where relevant as the examing team have stated that candidates who do this score better.
Understand your verbs. ‘explain’ requires a sentence and will score one mark. ‘List’ simply requires you to list out information with no further explanation and this will score 0.5 marks per point.

F9
Section A questions will often be knowledge-based and will balance out questions in section B &C.
That means you should expect to see questions on 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 market hypothesis is likely to be tested here too.
For section B the commonly tested areas are working capital management (eg the operating cycle, the impact of a change in credit period or accepting a factor’s offer), business or security valuations (eg methods of valuation), and financial risk management (currency risk, interest rate risk).
Section C will focus mainly on syllabus sections C, D and E. So think either an evaluation of financial options (interest coverage and gearing ratios), or a cost of capital and analysis.

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