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Top tips from top tutors
ACA tutors and examiners attended this year’s ICAEW Partner in Learning ACA conference. 2016 was the biggest conference so far, with over 185 delegates at the two-day event. Here are the top exam tips from the event
Case study: You must undertake your own research and analysis of the Advance Information (AI), and be able to explain it in your own words. You won’t have time to refer to large volumes of additional information in the exam – you must have a thorough understanding of the business described in the AI before the exam.
Number your pages correctly (1, 2, 3, etc) and use headings and sub-headings. Consider whether you’re writing an internal or external report and always use language that is appropriate for the audience.
Ethical issues may occur in any of the three requirements.
Be careful about trying to predict what the requirements will be. This creates the risk of using pre-prepared material which does not address the question in the exam, particularly for Requirement 3.
Watch the time: equal marks are available for each requirement.
Strategic Business Management
• Apply professional scepticism.
• Apply realism – what would you advise in the real world?
• Answer requirements in order.
‘Why’ and ‘because’ are important words when answering a question. If you find yourself not explaining ‘why’ or writing ‘because’, you may not be accessing the higher level marks.
If you are asked for the key audit risks or financial reporting matter you need to select the most significant issues. So not setting out generic points or procedures – only those relating to the scenario.
The application of knowledge is important rather than copying large sections of definitions from the standards. Sometimes it can be helpful to identify the accounting standard and to write out definitions, but this should be done in an applied manner.
If you are asked to adjust the financial statements before performing financial statement analysis, it is so your analysis can tell a more interesting story.
• Think beyond legality, transparency, effect and fairness.
• Use given performance measures in written analysis, as well as calculations made.
• Widen your scope to other ethical principles: honesty, integrity and accountability.
• Use methodical approach to implication of data.
Business Planning: Taxation
A good, brief plan often shows in a well worked answer.
Credit is given for applying knowledge to the facts/scenario in the question and for demonstrating skills, such as drawing conclusions and providing recommendations.
Business Planning: Banking
This is not a general banking exam. The focus is on ICAEW chartered accountants in the banking industry or working in audit and assurance for banking clients.
It is useful for candidates to review the annual reports of different banks before the exam. In particular, the management report located at the beginning of the annual report is helpful as it provides information on the bank’s performance, risk analysis and strategy. It is also useful to read the extended auditor’s report which identifies key risks affecting the audit strategy.
Business Planning: Insurance
This is not a general insurance exam. The focus is on ICAEW chartered accountants who work in the insurance industry.
Exam questions can be set around key sectors of the insurance industry. Questions are likely to focus on audit and assurance engagements, business planning and risk management.
It is useful to review the annual reports of different insurance firms. In particular, the management report and the extended audit report, paying particular attention to the auditor’s areas of concern and responses.
Leave a note next to your answer if you recognise it is wrong and do not have time to amend it.
Examiners will award follow through marks and these are easier to gain if a note is written for the examiner.
Being able to do calculations in reverse is a good test of your understanding.
Refer to industry averages and show industry average calculations whilst relating it to the company you have mentioned in your answer.
Make sure you explain what the numbers mean when the question asks you to.
During the exam, all the information you need is in the question. For example, if the question doesn’t state whether an individual is married then you should assume they are single.
When you are answering a question on inheritance tax, you should show workings that relate to nil rate bands. Show the starting nil rate band and the amount used up.
Financial Accounting and Reporting
As a guide, if there are, say, more than three figures in a working, a separate working should be produced rather than including a bracketed working on the face of the pro forma financial statements.
Always read the requirement, if it says ‘prepare’ or ‘calculate’ then no explanation is required and no marks are available for any such explanation given – it simply wastes time.
Only prepare proformas and workings needed for the question’s specific requirements rather than all proformas that you have learned for that topic area. Tailor your answer to the question.
Label workings, show totals and carry totals through to proforma financial statements if appropriate (eg, PPE workings) – provide a clear audit trail.
Complete extracts or financial statements including showing correct inflows/(outflows) for a statement of cash flows – one-sided brackets gain no marks.
Audit and Assurance
As organisations are developing techniques to examine large volumes of data, you are expected to have an understanding of data.
You need to be aware of the role of the FRC, including both the regulation and research aspects.
If a scenario has been given, ensure your answer explains the requirement in the context of the scenario.
In the exam, read the requirement carefully to ensure you have captured everything and have answered all requirements.
• Thanks to the ICAEW for this article
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