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Top of the tips for ACCA June 2019 - Strategic Professional

28 May 2019


Welcome to your first 4 hour closed exam. SBL aims to build on the knowledge that you gained at the Applied Knowledge and Applied Skills level, but also has its own distinct syllabus content.
The exam will focus on one main organisation, and all the question requirements will relate to this organisation. You may, however, have to take on a variety of roles, which may require you to adopt an internal or external perspective when answering the question.
All of the questions are compulsory and will consist of 80 technical marks and 20 professional skills marks.
ACCA acknowledges that the SBL exam is demanding, and time management is a key part of any exam success strategy. You are recommended to spend 40 minutes reading, planning and interpreting the requirement and the information/exhibits provided. That leaves 200 minutes to build up your 50% pass mark.
One area students often fall down on is producing lots and lots of unnecessary calculations. By planning the numerical analysis that you intend to perform will ensure you aren’t producing numbers just for the sake of it!

You should start by reading the examiner’s approach article on the ACCA website. While you are there read any other exam technique and technical articles.
In section A the first Q will be based on group accounting and may include complications such as a foreign subsidiary, discontinued activities, disposals and/or acquisitions. Be ware that this Q may test consolidation statements of cash flows as was the case in December 2018.
The second Q will cover the reporting and ethical implications in a given scenario. Make sure you consider ant threats to the fundamental principles of ACCA’s Code of Ethics and Conduct in your answer.
Section B will always include a question or part-question involving the analysis or appraisal of information from the perspective of a stakeholder. In the December 2018 exam this involved explaining the nature of tax accounting in the financial statements to an investor. Even if this sounds daunting, make sure you have a go at answering the Q.
Current issues could be examined in either section A or section B. the Conceptual Framework and associated exposure draft have featured a lot in both the September 2018 and December 2018 exams – be prepared for this to be the case in June 2019 as well.

From last September every exam has had questions, which focused on section B of the syllabus (advanced investment appraisal) and E (treasury and advanced risk management techniques). These areas are therefore a high priory for your revision phase.
Section A questions are often based on core areas such as project appraisal (domestic or overseas), business valuations and business/financial reorganisations. These areas often include cost of capital calculations. Risk management may also feature in a number of different ways, eg value at risk, real options, hedging or risk mapping.
For section B the tips are:
*Risk management (currency or interest rate).
*Dividend policy and general financing issues.
*Real options.

Q1 focuses on a range of issues from syllabus area A (strategic planning and control), C (performance measurement systems and design) and D (strategic performance management).
In recent exams Q1 has often required linking a business’s mission to its performance objectives using the concept of CSFs and KPIs. You may well also have to critique and recommend improvements to performance reports and the balanced scorecard could well be tested in this context. The assessment of performance is also likely to be tested and this could easily include benchmarking as a theme.
Financial performance measures (ROCE/RI/EVA, etc) are also likely to be commonly examined in Q1, but don’t neglect non-financial issues from syllabus section D, such as quality management and reward systems.
One of section B questions will come from syllabus section E (performance evaluation and corporate failure). In section B commonly tested areas include quality management, information reporting (bid data and lean information), the application of strategic models (PEST, Porter’s 5 forces, the value chain), HR frameworks (reward & appraisal systems), risk management and environmental management accounting.

One of the section A questions will focus on personal tax issues and the other will focus on corporate tax issues. In Q1 there will be 4 professional skills marks and in section A there will be 5 marks available on ethics.
Topics/scenarios you would expect to see are:
*Personal income tax scenarios, which could involve investing in a pension, investing in EIS, SEIS or VCTs, share schemes, employment income possibly with termination payments, a personal service company, property income or takeover.
*Unincorporated business, particularly including loss reliefs, partnerships or basis period rules.
*A question focussing on overseas issues. This could be income tax, CGT, IHT or a corporate scenario.
*CGT v IHT, including availability of reliefs.
*Corporate scenarios – likely to focus in more depth on intangibles, research and development issues, corporate groups or consortia.
*Special corporate scenarios such as liquidation purchase of own shares, close or investment companies.
*A business transformation scenario question such as selling a sole trader business, incorporation, or, in corporate context the sale of shares v the sale of trade and assets.
*Other common types of question/calculations:
- reviewing a pre-prepared computation to spot, explain and correct errors.
- calculations such as “tax saved through an action”, “after tax proceeds”, “the value of a post-tax inheritance”, “net spendable income” or the “net of tax cost of something”.
When it comes to VAT expect to see marks available for partial exemption, land and buildings, transfer of going concern, capital goods scheme, overseas VAT, and registration/group registration.
There will also likely be a couple of marks for stamp duty points and finally don’t forget the basic administration points – when do we need to pay tax, when do we file a return and that if either of those are late.

The most recent AAA exams have not contained any real surprises, say the experts, although you should note the presentation of the embedded email and the supporting exhibits in the case study.
Section A’s case study is set at the planning stage of the audit for a single company, a group of companies, or potentially several audit clients. Expect the detailed information to include extracts of financial information, strategic, operational and other relevant information for a client business, as well as extracts from audit working papers, which could include the results of analytical procedures.
Candidates will have to address a range of requirements from syllabus sections A, B, C and D. This will, be a real world situation where you will need to address a range of issues simultaneously in relation to planning, risk assessment evidence gathering and ethical and professional considerations.
In section B one Q will always predominately come from syllabus section E and so you must always be ready to answer a question relating to completion, review and reporting. Think here about the assessment of going concern, the impact of subsequent events, evaluating identified misstatements and any corresponding effects on the auditor’s report. Candidates may also be asked to critique an auditor’s report or a report which is to be provided to management or those charged with governance.
The other section B Q can be drawn from any other syllabus area – A, B, C, D and F. Syllabus section G on current issues is unlikely to form the basis of any question on its own, but instead will be incorporated into the case study or either of the section B questions.

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