Tips for P1 - P7

1. PQ Magazine by 7 City, Kaplan & First Intuition for P1 to P7

Paper P1
Corporate Governance – risk management, director’s remuneration and non-executive director’s responsibilities.
Internal controls.
TARA risk model, ethics absolutist v relativism, separation of CEO and chairman powers (think M&S), ISO 14001.
Ethical dilemma – American Accounting Association decision model.
Stakeholder management Mendelow’s Matrix.
Risk audit - in house versus external provision. The need for internal audit.
The contents and process of a social/environment audit; the environmental footprint.
Enterprise risk management models
(TVG: "Think M&S" refers to the attempt by retail chain Mark & Spencer to justify combining the role of their Chairman and CEO.)

Paper P2
Complex group statement of comprehensive income incorporating a part disposal or stepped acquisition.
IFRS 3 revised aspects.
Principles and accounting treatment multi-scenario incorporating intangible non-current assets and impairment.
Deferred tax.
Management responsibilities for ensuring transparency of financial statements.
Impact of accounting policies on a financial covenant.
Accounting for environmental issues including provisioning.
Convergence of IFRS and US GAAP.
Discount activities.
Group topics – disposal of subsidiary and complex group. Other topics provisions, impairments, deferred tax.

Paper P3
The balance between controlling and encouraging emergent strategy.
E-business and supply chain management.
Scanning the macro-environment and competitive environment.
Project management and the capability maturity model.
Marketing techniques and customer relationship management.
Stakeholder analysis and corporate social responsibility.
Business analysis in not-for-profit organisation.

Paper P4
Corporate failure.
WACC/financing.
Business Valuation.
Black Scholes.

Paper P5
Impact of world, national and market trends on performance.
Current issues and trends in performance management.
The performance hierarchy, pyramid.
Behavioural aspects of performance management, forecasting.
Strategic management accounting and limitations of traditional management accounting techniques.
Learning curves.

Paper P6
Taxation aspects of property and investment income.
Self-assessment for individuals and partnerships.
Taxation of group companies and consortia.
Computing trading losses.
Ethics and tax planning.
Rollover relief.
Lease vs buy for assets.
VAT capital goods scheme.
IHT death estate.

Paper P7
Prospective financial information linked to applications for debt funding.
Audit procedures looking at impairment of financial instruments and fair value.
Ethical scenarios/professional issues.
Auditor liability and good practice management.
Issues associated with the control weaknesses and collection of evidence for a not-for-profit organisation.
Audit challenges of determining going concern status and the impact on audit opinions.
The clarity prject.
ISA 700 engagement reporting.
ISA 540 accounting estimates.

2. IAT for P4
These are Sunil Bhandari's best guess only of some of the topics that may appear on the ACCA P4 paper. According to Sunil, it is of paramount importance that you have revised all syllabus areas and have worked as many past P4 questions as possible.
* Cost of Capital, Degearing and Regearing Betas, Cost of Debt including Credit Risk Premiums.
* Business Valuations for Type 1 Business Acquisition. Range of Values and Post Acquisition Analysis.
* Forex Hedging Methods using the ‘big 4’- Forward Rate, MMH, Futures and Options.
* Black Scholes Option Pricing Model - possibly Grabbe Variant.
* APV and MIRR
* ‘Q4 Written Question’ – Toxic Assets and Ethics
Sunil say that P4 students should be aware that the paper will still be a Bob Ryan style as Shish Malade has 'reviewed' the paper set by his predecessor.

3. Mayan for P1
Recently, archaelogists discovered a parchment in an ancient Mayan temple ruins in the Yucatan Peninsula in Central America. The parchment amazingly foretold what topics are likely to be tested in the ACCA Paper P1 in December 2009!! Your P1 lecturer has translated the ancient Mayan text to English as follows:
i) Core topics that can be applied in almost every exam:
a. 9 concepts of corporate governance
b. Agency theory
c. Technical knowledge for internal controls and risk management - COSO and TARA
d. Sub-committees (especially remuneration and audit committees which have not yet been tested)
e. Types and categories of risks (be sure to identify the specific risks in the scenario)
ii) Core topics not yet tested:
a. Directors remuneration
b. IFAC/ACCA code of ethics and conduct.
c. Theory of unitary board vs multi-tiered board.
iii) Topics which you cannot bluff (so must know) which have not yet been tested:
a. EMAS and ISO 14000
b. ICGN and OECD Codes
c. Johnson & Scholes 4 ethical stances and Matten's corporate citizenship
d. Full cost accounting.
iv) Edge topics:
a. Transaction cost theory
b. Institutional investors including shareholders activism and when to intervene
c. SOX - A key topic in real life but only tested once
d. Company law topics which the examiner likes e.g. retirement by rotation, time limited appointments, service contracts, insider dealings, etc. on page 68 of BPP.
v) Student Accountant technical articles not yet tested:
a. AAA model
b. Internal and external stakeholders/actors
c. Risk and environmental audit - definitions, internal vs external auditor, 4 stages of risk audit, 3 elements of environmental audit, etc.
vi) Professional marks - Familiarize with formats of briefing notes and press statements as you should already be familiar with letters, memos and reports. Majority of marks are awarded for layout format, flow and persuasiveness.
Note: The examiner tested on core topics in the first two sittings but switched to applications (and even common sense) questions in the last two sittings. The above is a guidance on what to focus on rather than a list of exam tips.
4. OpenTuition for P1, P2, P3 and P7

P1 Professional Accountant
Question 1
Identify and explain how a company can better comply with the Combined Code on Corporate Governance, the role of a corporate and social responsibility sub-committee, and something about the environment
Question 2
Importance and role of an Internal Audit department / function in the management of risk
Question 3
David Campbell's article in Student Accountant August 2009 about Internal and External Actors in a company
Question 4
A scenario question on ethics - different attitudes and appr

P2 Corporate Reporting (INT)
Question 1
Consolidated Statement of Income with two subsidiaries - one part disposed but still a subsidiary, the other part disposed becoming an associate - both with goodwill involved. Q Base, Black and Zero but needs amendment to include the goodwill angle. !5 more marks for chat about environment and or corporate governance
Question 2
A "Various IFRS" question - Lots of examples in section B of the BPP revision kit
Question 3
Write a report to directors about the acceptability of some dubious proposed accounting treatments
Question 4
n essay question about the problems facing the IASB in their efforts to reach acceptable standards which can be applied World-wide

P3 Business Analysis
Part A - 50 mark case study
SWOT/PESTEL/Porter's 5 forces analysis
Foreign expansion/merger
Generic strategies
Parenting styles/Ashridge portfolio display
Part B – 2 from 3 25 mark questions
* E-business and marketing
* Project management
* Business process change management/outsourcing/commoditisation of outsourcing services

P7 Advanced Audit And Assurance
All question numbers are from the BPP Revision Kit, December 2009 edition
Question 1
Audit risks ( 32 and 55 )
Question 2
Financial statement risks ( Bataleur Zoo Gardens Mock exam 2, Q1 )
Question 3
Assurance services engagement ( 31 )
Question 4
Comment on the matters you should consider and State the audit evidence you should expect to find ( Any of Qs 18 - 30 )
Question 5
Ethics ( 11 )
Question 6
Management letter, corporate governance etc ( 68 ).

5. BPP for P1 to P7

P1
Sarbanes Oxley - why a rules based system is suitable for corporate governance and comparing it to the UK combined code
CSR - benefits to organisations of engaging with stakeholders
Auditing processes - benefits of internal auditing, focussing on environmental auditing
Disclosure requirements under Turnbull report
Discussing an ethical issue using the American Accounting Association model
Explanation of some of the 9 principles of good governance
Features of an effective control system
Roles of different committees at board level
2 Tier v unitary board structure

P2
Section A
Compulsory case study including preparation of a group statement of comprehensive income (profit and loss account) (top tip) and/or statement of financial position (balance sheet) including complex group structures, continuing and discontinued activities or group disposals. This will include other accounting complications such as financial instruments, pensions, share-based payment and impairments.
There will also be discursive requirements on a linked accounting adjustment and social/ethical aspects of corporate reporting and the link between morality and ethics.
Section B
Industry question (often Q3), testing range of standards (NB: no specific knowledge of the particular industry is required)
Discussion question (Q4) looking at current developments in corporate reporting such as proposals relating to fair values, success/issues on implementation of IFRSs, treatment of gains and losses on pension schemes, small and medium-sized entities, management commentary, comprehensive income/presentation of financial statements, improvements in performance measurement. May also include a related computational part based on figures from a case study
'Multi-part' testing a range of standards separately, such as related parties, pensions, changes in accounting policies, recognition and/or impairment of tangible and intangible assets, foreign currency transactions, leases, revenue recognition, consistency of standards with the conceptual framework, changes in accounting policies, the effect of accounting treatments on earnings per share or ratios and deferred tax implications

P3
Organisational goals and culture
Environmental analysis
Business processes
Quality initiatives
Methods of organisational expansion
Strategies for competitive advantage
Portfolio analysis

P4
Role and responsibility towards stakeholders: ethical issues continue to appear regularly as an optional discussion question. This is an important area to develop as a strength, since the discussion question is normally one of the easier optional questions.
Advanced investment appraisal: real options and adjusted present value are popular themes and were not tested in the last two sittings. Cost of capital calculations are regularly tested, make sure that you are comfortable adjusting betas for differences in gearing.
Acquisitions and mergers: this exam normally contains a question involving valuations which the examiner sees as a crucial part of the syllabus, and this area was not examined in June. To give this a topical twist you might be valuing a company that is splitting itself up or selling off a division.
Corporate reconstruction: this is a topical area; a question could also ask you to evaluate a capital reconstruction e.g. a business that is considering offering its creditors shares in order to enable it to survive.
Advanced risk management: foreign currency derivatives are due to be tested numerically.
Emerging issues: the January 2009 article by the examiner on ‘toxic assets’ indicates that this area may well be examined as a part of a question.

P5
Scope of strategic performance measures in the private sector: you may be asked to draw up an income statement or budget or to compare actual performance against a benchmark. This could include the use of activity-based approaches, learning curves or optimal pricing. Once the financial data has been collated and compared, questions usually include the need to comment on these and may require discussion of non-financial indicators, additional information to improve assessment or strategies to improve performance.
Divisional performance and transfer pricing issues: this chapter has been a key issue in P5 exams so far, often appearing as a compulsory question. ROI, RI, EVA or even ABC could feature here. Transfer pricing has not yet been tested in a full question but has appeared both as part of optional questions, numerically, and part of the smaller compulsory question, discursively.
Current developments / trends in management accounting: modern management and management accounting techniques have been examined here with both JIT and TQM common topics in the previous syllabus. Knowledge of these was used to discuss the impact they would have on information systems / performance measures.
Alternative approaches to budgeting for control: budgeting has been a favourite essay question with your examiner, but missed out in 2008.
Management accounting and information systems: a question on sources of information, relevance of operational management accounting information in today’s business environment or types of management information system is possible at this sitting as it has not yet been tested in depth at P5.
Alternative views of performance measurement: the examiner often includes a question to evaluate an organisation against an established theoretical model. The balanced scorecard, performance pyramid and building blocks have all appeared in previous exams.
Performance hierarchy: linking strategic decisions to mission statements or suggesting strategic options using models such as Ansoff’s matrix or the BCG matrix lend themselves to questions containing a mixture of financial and discursive elements

P6
Section A
Q1 Case study scenario involving personal tax issues.
Covering overseas aspects of income tax, calculation of DTR, choice of remuneration package involving share schemes, property income, capital gains.
Q2 Case study scenario involving group of companies; group relief, capital gains groups implications including consequences of selling a subsidiary, VAT issues of a group
Section B
Q3 IHT and CGT consequences of gifting wealth in lifetime or on death
Q4 Purchase of own shares, close companies, liquidation
Q5 Unincorporated business versus company, involving loss relief

P7
A risk-based and/or planning scenario in the compulsory section
Questions based on articles published in Student Accountant in the past six months - such as recent articles on the Clarity Project and Computer Assisted Audit Techniques (CAATs)
A number of requirements asking for audit procedures and required evidence in respect of specific financial reporting issues (CAATs could also feature here)
A practice-based scenario looking at professional, ethical and quality control issues
A reporting scenario of some sort
Legal and regulatory issues affecting assurance providers, especially in the context of firms’ professional liability, money laundering and the UK Companies Act 2006 (even the IAASB Clarity Project)
The requirements of other forms of assurance engagement, such as Prospective Financial Information (PFI), Value for Money (VfM) studies or agreed upon procedures
The correct treatment of more complex accounting issues (such as employee benefits or first time adoption of IFRS) than has been seen before
As in June 2009 with ISA 315, specific ISAs may be examined in sufficient detail to warrant learning the key elements for regurgitation in the exam
Discrete topics that we have not yet seen such as subsequent events as part of evaluation and review, questions using the context of internal audit or advertising for certain engagements
The need to understand current issues such as globalisation, the impact of the recession on auditors, corporate governance, risk management and auditor liability.

6. Kasturi for P1 and P3

P1
a. CG models - agency theory, stakeholder theory, enlightened shareholder value model and stewardship theory
b. Stakeholders - types, external and internal actors
c. Ethics - normative-instrumental views, normative and pragmatic approaches, threats, codes
d. Environmental accountability - env./carbon footprint, means of reduction, environmental audit, EMS, triple bottom-line (social and environmental audit pressures)
e. CSR - importance, how, approaches (GOA)
f. CG principles
g. Rules (SOA)-based and principles-based regime
h. CG - evaluate CG arrangements, an effective board, NED independence, role of committees (nomination, risk, remuneration), shareholders' rights (using shareholders committee provisions)
i. Risks - types, define risks, risk framework, risk audit stages, risk audit (in-house, outhouse)
j. Internal controls
k. Internal audit (objectives, in-house vs outsourcing).

P3
a. Mission statement, stakeholder mapping, benchmarking and balance scorecard
b. PESTEL, Diamond, market forces, SWOT, SWOT analysis
c. Strategies -
- Alliance (equity and non-equity including outsourcing)
- External growth (M&As), internal growth/Greenfield
- Ansoff
- Generic strategies and hybrid (strategy clock), hypercompetition
- Turnaround
d. Strategy evaluation models/parenting models
e. Change, resistance and culture
f. Project management issues (also read October issue article)
g. Quality issues - CMMI, V model, software quality, software package issue/problems
h. HRM issues, management and leadership
i. Business process change and strategic importance
j. E-business/commerce (IT and market forces) and e-marketing
7. IFTC for P1 to P5

P1 Professional Accountant Exam Tips
Q1：Stakeholders influence
trade union; secretary; NEDs; stock exchange etc
normative vs instrumental form of stakeholders
Agency cost and NEDs
Role of remuneration committee ( could be nomination or audit committee ); role of secretary
Risk classification (eg. strategic risk, compliance risk, operational risk)
Board structure
Cross directorship
Unitary board vs two-tier board
Effectiveness of the Board (CPD programmes)
Environmental audit
J&S ethical stance
Q2：Professional and business ethics
Ethical theories
Basic – absolutism; relativism; consequentialism etc
Carroll
J&S ethical stance
Ethical decsion-making model
For individual – AAA’s model
For corporate – Tucker’s model
Q3：Risk and internal control
Risk assessment OR risk management strategies (ATRA)
Control environment and control procedures (control activities )
Internal audit and whistle blowing
Selection of Internal auditor
Outsourcing of internal audit
Q4：Corporate Governance principle
Audit committee OR Nomination committee
Independence of NEDs,
Contribution of NEDs
Social and environmental audit

P2 Corporate Reporting Exam Tips
Q1：Consol
Disposal ( by examiner article )
Foreign currency ( by trend reading )
Restructure
Complex group (D-shape)
Related parties ( theories part of Q1)
IFRS 3 (theory part)
Q2：Accounting concepts question
IAS 16; IAS 40; IAS 36 impairment
IFRS 5 Asset held for sale and discontinue operation
IFRS 8
Q3：Theory question
Theoretical issue
Quality of financial statements
IAS 8
Change in accounting policies
Prior year adjustments
Q4：Accounting concept
IAS 38 Intangible asset
IAS 37 Provision recognition
IAS 18 Revenue recognition
IAS 10 Subsequent events

P3 Business Analysis Exam Tips
Q1：Strategic Analysis
PESTEL (environmental)
Resource analysis ( internal )
Porter 5 forces
Financial evaluation
Strategic choice and evaluation
Appropriateness of choice ( use J&S’SAF )
Managing change
Stakeholders management
Q2：Porter’s Value Chain
Theory and application
Process changes to improve value to customer
Upstream or downstream
Process improvement
Process management
Harmon’s process management
Business Process Re-engineering
OR
Organisation structure
Structural change and implementation
Cultural changes
Q3：Marketing strategy
Use of marketing mix ( 4 Ps ; 7 Ps )
Customer Relationship management
Developing strategies
Joint development strategies
Q4：IT question OR others
V model OR CMMI
OR
Strategy formulation
Mission statement and objectives
Strategic planning
Rational approach
Emergent approach

P4 Advanced Financial Management Exam Tips
Section A
Q1： WACC, FCF,FCFE (dividend capacity), M&A and business valuation(including APV)
Q2：Financial reconstruction
Q3：FDI appraisal (including FOREX risk hedging)
Section B
Q1：Credit risk, credit spread and bond valuation
Q2：APV,MIRR
Q3：Option pricing theory (including Greeks)
Q4：Interest rate risk management
Q5：Foreign exchange rate risk hedging
Q6：VaR

P5 Advanced Performance Management Exam Tips
Section A:
Q1：Assess performance in a NFP sector (charities) by utilizing both financial grounds and non-financial grounds; highlight the problems and provide recommendation (35’)
Q2：Performance evaluation: Performance pyramid (internal efficiency and external effectiveness) with TQM quality cost analysis (25’)
OR
Q2：Transfer pricing policy: calculations and evaluation of options; (25’)
Section B:
Q3：One of the recent developments and emerging issues – EMA (discuss and apply) (20’)
Q4：Likeliness of corporate failure, assess it by using quantitative and qualitative models and strategies to prevent from not happening (20’)
Q5：Impact on business performance by the change of strategy, structure and culture (20’)
OR
Q4：Short analysis of ratios together with ‘beyond budgeting’ and ABM issues (20’)
Q5：Assess the impact of government regulation on PM techniques used and the performance levels achieved (20’)

8. Orange for P2
a. Partial disposal
b. Piecemeal acquisition
c. Forex
d. Share based payment
e. Employee's benefit
f. Deferred tax
g. FV measurement
h. Environmental & ethical issues.
Credits to our beloved KTAR lecturer, Mr. Tan for compiling.