Pq November acca

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PQmagazineNovember 2014 www.pqmagazine.co.uk / www.pqjobs.co.uk

Here they are the last ever tips for NovembersCIMA exams. Our four-page pull-out is packed

full of top advice but dont forget to revise!

Every accountancy student

needs to have their own

personal study plan that

maps out the time it will

take them to qualify, say

leading tutors.

At a recent PQ magazine

roundtable, our panel of experts

stressed the move from set dates to

flexible exam times will place a new

emphasis on accountancy studentsto manage their journey through to

qualification.

Students need to map out their

whole study plan, from the very first

exam all the way to the end.

Currently, many students just look

to complete a module or stage, say

our experts. But now they must

look at the whole picture.

And all this must be written

down. You need to create a record

that you can go back to, to ensure

you are keeping on track.

Our experts are also concerned

that many students never feel

totally ready for the exams. So if the

onus is on them to book an exam

sitting, the worry is they may

procrastinate and lengthen the time

it takes to move to the next level.

Students will have to learn to put

themselves under pressure and the

only way of doing that is by booking

the exam, was the consensus in

our discussion group.

Recent figures from the Financial

Reporting Council revealed that one

in four (28%) of PQs studying with

the six main UK accountancy

bodies are still waiting to qualify

half a decade after starting their

studies.

As we revealed in Septembers

issue, that is a whopping 140,000

students out of a total of just over

500,000 who are still not qualified

after five years. You have to ask

yourself whether it will take you thatlong. You will need to be realistic

about your own abilities here.

CIMA, which introduces exams

on demand from 1 January 2015,

has the largest percentage of

students at the five-year-plus

milestone. Some 36,576 are still

registered as studying five years

after joining up to CIMA, which is

30% of the total student

population.

The ACCA has 101,185 students

still signed up as a PQ five years

after first signing up (28%).

Read about what our panel of

experts have to say about the move

to exams on demand on page 26.

PQ magazine is the AIAs Accountancy Media of the Year winner for 2014.

At a ceremony in London earlier this month PQ magazine beat off the

challenges from Accountancy Age, The Accountant and AccountingWeb to

win the top prize. Richard Simms of FA Simms, which sponsored the award,

presented editor Graham Hambly with the prize.

Other winners on the night were Ian Ball, chair of CIPFA International and

former CEO of IFAC. LSBF's Hafeez Qazi was also awarded the prize for AIA

Accountant of the Year.

PQ magazine had a great night and, dont forget, you too could be a

winner as we are now looking for nominations for the PQ magazine Awards.

We have 15 PQ trophies up for grabs.

Turn to page 14 to find out how you too can get on the front cover of PQ!

TAKE CONTROL

OF YOUR FUTURE

PQ TRIUMPH AT AWARDS

Look what we won!

WIN!

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Top tutors: there to help but

you need to help yourself too!


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comment PQ

News

08CIMA resit results P2 passrates plummet to just 27%

10ACCA optional papers ACCAtakes steps to tackle problems

12Boost for N Ireland Three ofthe Big 4 unveil expansion plansthat will boost the local economy

Features, etc

06Mind your Ps&Qs I need helppassing ACCA; E3 woes; and ourTwitter and LinkedIn updates

14PQ Awards 2015 Make yourCV shine get yourself(or your hero) nominatedfor a PQ award

16ACCA F4 The newchallenges Corporateand Business Lawstudents face

17P is for problem The ACCAsAlan Hatfield explains how theassociation is tackling the issueof poor P paper results

18ICAEW spotlight Valuationtechniques the examinersview; and the importance of aproper revision timetable

21Four pages of CIMA tips Atips bonanza for last time beforethe exams go on demand

26Roundtable discussion Ourpanel of experts discuss, amongother things, the move to OTs

28ACCA case studies Two reallife examples of how the AATqualification changes lives

30International standardsEquity accounting is here to stay

32CIMA pre-seen Expert adviceon how to deal with the casestudy element of the NovemberCIMA Strategic exams

34CIPFA spotlight Qualificationchanges reflect workplace needs

35Performance measurementDeveloping a sense of balance36Careers Life at PwC Cyprus;

and how to get to partner level

42Fun time Accountancy songson the web; spot the bill;and more great giveways

The columnists

Robert Bruce Corporatereporting, and why we shouldall be sceptics 8

Prem Sikka OECD proposalsrepresent a missed opportunity 10

Carl Lygo College visa fraud doesour profession no credit 12

Subscribe to PQ magazineIts FREE see page 41 or go to

www.pqmagazine.co.uk

ABC July 2013June 2014

32,361

Publishers statement: We have a

digital issue of the magazine which

is sent to 10,012 requested readers

Auto enrolment is sexy

I was very kindly asked to sit on the panel for the AIAs

Founders Lecture to discuss that sexy subject pension auto

enrolment! No it is sexy, and when you see the fines that kick-in if you

miss your staging date then youll start to be as interested as I am. That

fine is 400 plus 50 per staff member per day. So if you are helping a

micro business with three people then the fine equates to 5,000 if you

miss the date by a month! It seems that while the large firms havesuccessfully negotiated auto enrolment the big challenge is still to come.

There really does seem a need for DWP to get its message heard in

SMEs. Did you know that companies need to understand they cant opt

out until they have opted in? Employees will also have to do this via their

product provider not via their employer.

Pension enrolment affects you as an employee and accountant, and it

is something you should know about. I think sometimes PQs should be

able to show people they have practical solutions to real problems, rather

than the ability to explain the application of IFRS 9 (we are talking

financial instruments here). The discussion was followed by the AIA

awards ceremony and yee-hah! PQ magazine won the Accountancy

Media of the Year award. Can I thank everyone who voted for us. I am

not known in the office for being tech savvy but I was able to help the

AIA President turn off his phone during the debate. I know who wasringing him and you should be ashamed of yourself!

We have a great issue for you this month. We finally got our hands on

the CIMA resit results, and discovered a 27% pass rate for P2. CIMAs

Noel Tagoe has been on tour, but he phoned us the minute he got back

to the UK to explain where he thinks it all went wrong. He really does

read every exam paper and champions the idea that an average student

should be able to pass the exams. They arent just for the very bright,

and he doesnt want clever examiners showing off. He wont like it but we

have four pages of tips for the last ever set of CIMA November exams.

Graham Hambly, PQ magazine editor ([email protected])

CONTENTS November 2014

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PQ Magazine Fourth floor, Central House, 142 Central Street, London EC1V 8AR | Phone: 020 7216 6444 | Email: [email protected]

Website: www.pqmagazine.co.uk | Editor/publisher: Graham Hambly [email protected] | Advertising manager: Polly Thrasivoulou [email protected]

Associate editor:Adam Riches | Art editor: Tim Parker | Subscriptions: [email protected] | Contributors: Robert Bruce, Prem Sikka, Carl Lygo,

Tony Kelly, Phil Gammon, Jo Daley | Origination and print services by Classified Central Media

If you have any problems with delivery, or if you want to change your delivery address, please email [email protected]

Published by PQ Publishing PQ Publishing 2014

I need some helpI am an ACCA finalist who has

taken a break from my studies

and am now keen to get themcompleted, but I am unsure of the

best way to go about this. I only

have the optional papers left but

have failed P5 three times my

marks have been in the low 40%.

I have worked overseas and

was recently offered a fairly senior

financial controller role, but I

declined as my top priority is to

pass the optional papers.

I am contemplating

studying full time for P5

and Advanced Tax. I am

even thinking about

switching to CIMA with

exemptions I would have just five

exams to sit and I can take them

on demand from January.The main advice I get from

tutors is keep trying, but I am

feeling very frustrated. I suppose

the big questions I have are: how

much will I increase my chances

by studying full time? And should

I switch to CIMA?

Name and address supplied

The editor says: Please take a

look at the increased support the

ACCA is putting into place for P5

(see page 17). There are going to

be a lot more resources available

to options sitters this December.

The writer of the star letter each month wins a fantastic I PQ mug!

Hot & TweetThe FTSE 100

companies are

upping their gameon Twitter, says social media

agency Battenhall. They sent

out a total of 1.4m tweets in

the past year, nearly three

times the number they sent in

the previous year. Remember,

the US SEC now allows firms to

use social media to announce

important information.

So, who is doing well?

Burberry has added a million

followers in just 12 months.

Other fast-growers in the

corporate world are ITV andRolls-Royce.

We were, as usual, the only

magazine at the ACCA AGM

and tweeting about it. The AGM

also doubles up with our yearly

get together with top columnist

Professor Prem Sikka. It was

Prem who brought it to

everyones attention that one

newly appointed ACCA council

member, Nur Jazlan, could be

in trouble. Apparently his

election was announced before

being voted in at the AGM!

Prem had the

evidence to

prove it too

We also

rolled along to

the FRCs

annual open

meeting this

month. CEO Stephen Haddrill

stressed the importance of the

work the council has been

doing on the UK Corporate

Governance Code. The three

things he wanted the audience

to concentrate on in the newreport were the onus on the

long-term health of the

company, provisions on

clawback, and the need for a

company to explain a

significant, if not majority, vote

against the remuneration

packages of directors. The big

story here was the move to

Viability Statements in a

companys report to investors.

Follow us @PQmagazine

email [email protected]

I cant get past E3Im really struggling with E3. The

problem is that I am taking too long

on Q1. I know that there is a lot of

great advice out there on how to

approach the exam, but my mind

just goes to mush in the exam hall

stress I suppose! One problem is

that the scenarios seem too long,

they took ages to analyse.

Interpreting what the examiner

wants becomes part of the test

itself, which cant be right.

The latest resit also had a 22

marker on ratios, which was tough,

so I am not confident of the result.

If I fail this then I have just one

more chance in November!

Name and address supplied

The editor says: This was one of

several complaints we received

about E3. The resit pass rate was

just 40% in September. That was

good when compared with the P2

resit result that was a scary 27%.

The Tesco

accounting

debacle was a

recent discussion

topic on CIMAs

LinkedIn

pages. One contributor

questioned whether three

decades of uninterrupted

service provided by PwC

as auditors had made them

complacent about some of

the fundamental accounting

principles. One CIMA qualified also

wondered if they still taught income

recognition and cost deferment in

the ACA exams. It was suggested

that the head of the

ICAEW may need to

check that the

syllabus is still fit for

purpose and special

attention had to be

paid to what PwC trainees are being

taught. Clearly, the inference is that

this lack of knowledge doesnt

apply to CIMA PQs!

While we are talking about

LinkedIn, when was the last time

you updated your page? It is really

important to keep your LinkedIn

profile up-to-date it is your online

CV! We know our editor has already

added PQs award for Accountancy

Media of the Year presented at the

recent AIA Awards!


7/44

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8/448 PQ Magazine November 2014

PQ news

1,000 to 1 shot

Getting a change to your

ACCA exam result through an

administrative review is currently a

1000 to 1 shot. In all,

there were 966

administrative reviews

following the June

exam. A total of four

errors were confirmed.

While three of these

remained a fail just one

resulted in a pass. The ACCA has

also confirmed that none of the 46

appeal cases were successful.

Chocolate heaven

CIMAs pre-seen for the

November Strategic exams has

now hit the streets. The big advice

from BPPs head of

CIMA, Steve

Malpass, is dont

spend too long

trying to find a real-

life company that

mirrors the case.

This time around

Y plc looks a bit like Thorntons!

See page 32 for his full advice on

how to use the pre-seen.

The DNA of a partner

Do you have a can-do

attitude? If you want to climb the

career ladder to partner then this

is seen as the top characteristic by

those who have made it. Top

recruitment firm Hays has just

released the findings of its report

DNA of a Partner. Interestingly, its

research discovered that you

could make it to the top quicker if

you trained with a regional

independent rather than with a

Big 4 firm. Karen Young of Hays

discusses the findings on page 35.

In brief

Big changes aheadfor CIPFA studentsCIPFA has unveiled its new-look

professional qualification, which

becomes fully operational from 2016.

The changes reflect the changingpublic services environment and will

increase the focus on the wide range

of commercial skills needed by UK

public finance professionals. The

institute also wants to deliver greater

portability between the public and

private sectors.

AATs will be pleased to hear that

they should have a smoother route to

become a CIPFA PQ.

The E&T department is also using

the new syllabus to introduce e-

assessment and more blended and

online learning options for PQs.

For current PQs exemptions from

new syllabus modules will be granted

on like-for-like basis. So, for example,

if you have passed Financial

Accounting you will be granted a

transitional exemption from FinancialAccounting in the new syllabus.

Among the other key changes is a

move to reduce the case study exam

from a full day to half a day from

June 2016. A qualification time

limited of 10 years will also be

imposed.

CIPFA has promised lots of

specimen exam papers in all the new

papers.

Students commencing CIPFA at

the Certificate level in 2015 will be

able to join the new scheme a little

bit early, the institute has confirmed.

See page 34 for more details on

the proposals.

CIMA RESIT PASS RATES

SEPT 14 MAR 14 SEPT 13 MAR 13 SEPT 12

P1 Performance Operations 51% 53% 52% 58% 42%

E1 Enterprise Operations 63% 69% 68% 62% 88%

F1 Financial Operations 61% 71% 57% 71% 54%

P2 Performance Management 27% 67% 45% 44% 51%

E2 Enterprise Management 58% 63% 65% 55% 59%

F2 Financial Management 52% 52% 26% 51% 53%

P3 Performance Strategy 58% 58% 56% 56% 56%

E3 Enterprise Strategy 40% 50% 56% 48% 40%

F3 Financial Strategy 56% 50% 55% 52% 55%

T4 Part B case study exam 57% 65% 66% 54% 48%

It is often said, and quite rightly, that

auditors need to ensure that a highlevel of scepticism is maintained at

all times. But the same level of

scrutiny needs to be maintained by

many other participants in thebusiness of corporate reporting.

Take the Tesco case. It involved

payments that suppliers pay to ensure

that, for example, their products areon a more attractive display than their

competitors, and so on. Payments

vary, involve complicated things likerebates, and require a fair amount of

estimates about the final outcome

when you are taking a view, as here,

at the half-year mark. And they could,as appears in this case, go askew.

Instantly the call goes up: where

were the auditors? The answer, if you

look at the annual report, is that theyknew that problems could arise and

they flagged it up. Auditors can now

do this far more easily under the newaudit report regime that requires more

explanation and discussion. So the

auditors talked about the difficulties

of revenue recognition in such areas.

They warned of the judgmentrequired, of the risk of manipulation,

and talked carefully about the

potential problem. And this was waybefore the half-year figures in which

the overstatement was revealed.

There should have been no surprise.

This theme recurs down the years.The manipulation of the figures in the

Enron scandal was all detectable

deep within the notes to the accountsif any expert had cared to look.

It is not just auditors who need to

be more sceptical. Analysts and, dare

we say it, journalists could do more.

ROBERTBRUCE

Its up to allof us to besceptical

Robert Bruce is anaward-winning writer onaccountancy for The Times

P2 resit pass rate slumps

Helen Brand, centre, at the AGM

PQmagazineEXCLUSIVE

Two papers stand out in the latestCIMA resit results P2 and E3.

While the P2 pass rate plummeted

to an all-time low, just 27%, the E3

pass rate fell to 40% this time.

CIMAs executive director of

education, Noel Tagoe, said the

pass rate had come as a surprise.

The pass rate for March 2014 was

67%, and he admitted he thought

CIMA had turned the table in this

paper. He admits that he was

wrong. His concern is that students

are not properly prepared for the

resit. They have to put in as muchwork as they would for a main

sitting, he stressed.

Turning to the 40% pass rate in

E3, Tagoe promised to look more

deeply into the reasons behind the

drop in the number of PQs passing.

He told PQ magazine that he

personally looks at all of the exampapers to ensure they fulfill the

brief. He particularly checks the

language to ensure they can be

understood no matter where the

exams are being taken. These are

not, he assured us, exams that only

bright people can pass. The

average student should be able towrite an answer to one of our

exams and pass.

ACCA AGMPLEDGE TOIMPROVECEO Helen Brand told the 109th

AGM that the ACCA has introduced

a range of measures to improve

quality and speed of its customer

services. Some 83% of emails are

now answered in one day and 90%

of student registrations are

processed in three working days.

She did, however, admit that UK

members and students seem fed

up with too much email

communication. Nearly a third

wanted less. The ACCA has listened

and is now sending more targeted

emails.

One member asked for the

re-instatement of graduation

ceremonies. Brand explained that

these have been switched to

member celebrations, which she

said were working well.


9/44

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PQ news

The ACCA has begun to scope out

a whole series of initiatives aimed at

helping students through the tricky

optional papers.ACCA Director Learning, Alan

Hatfield, told PQ magazine that it

will be interviewing students who

passed P4, P5, P6 or P7, but only

at their second attempt! ACCA

believes understanding what they

did differently might give current

students a real insight into what

they need to do to get a pass in

these papers. He has promised that

these interviews will then be made

available to PQ magazine to

disseminate.

A pilot online webinar was alsolaunched at the end of September.

This gave general advice on how to

study for the P papers. If feedback

is positive and we have no reason

to believe it will be otherwise then

more webinars will be rolled out for

each of the optional papers. We will

be pushing for these to be made

available before the December

sitting revision phase.

The 29% June pass rate for P5

was a real disappointment for the

ACCA. The P5 technical advisor

has now recorded a video giving

advice on how to achieve success

in the paper. A video on P4 is alsobeing record to support the

December exams.

Finally, ACCA is using a

programme of Facebook Q&A

sessions, which will focus on the

options in the run up to the

Christmas exams. These will last

about an hour and provide students

with instant feedback.

See page 17 for more on this.

ACCA TACKLING THEOPTIONAL PROBLEM

Gut feeling

Business

leaders are

taking major

strategic

decisions about

the future of their business based

on their gut instinct and

experience in preference to the

use of data and analytics,

according to a new report

published by PwC and written by

the Economist Intelligence Unit.

The report, Guts & Gigabytes,

explores the changing nature of

corporate decision-making and

the use of data by companies

across the globe. What is telling is

the influence of negative past

experiences. British executives

reveal greater scepticism about

the value of data analysis

compared with their counterparts

overseas. Some 61% say that

relying on data analysis has been

detrimental to their business in

the past, compared with 34% in

Western Europe and 46% globally.

Partner profit up at EY

EY UK has had another good year.

Revenues are up 8.6% and the

average distributable profit per

partner has increased by 11.7%

to a healthy 727,000. EY

chairman Steve

Varley explained

that the firm was

investing heavily

outside of London,

including a

650,000 investment in a new

technology hub based in

Manchester.

Get on the property ladder

KPMG has reportedly joined

forces with Clydesdale and

Yorkshire banks to give its

employees the chance to get on

the London property ladder. The

Big 4 firm unveiled the

initiative to staff in mid-

September and is part of a

private banking package.

UK chairman, Simon

Collins, said: Owning a

home is fast becoming a fairytale

for all but societys wealthiest. We

are working hard to raise the issue

with policy makers and clients,

but we also want to make a

tangible difference to our staff

who also face this problem.

The Financial Reporting Council

(FRC) has confirmed that boards

must include a viability statement

in their strategic report to investors.

This, says the FRC, will provide animproved and broader assessment

of long-term solvency and liquidity.

It is expected that this statement

will have to look forward

significantly longer than 12 months.

Changes here will focus companies

on aligning reward with the

sustained creation of value.

The updated version of the UK

Corporate Governance Code (the

Code) has also been changed in

relation to remuneration. Boards of

listed companies will now need to

ensure executive remuneration isdesigned to promote the long-term

success of the company and

demonstrate how this is being

achieved more clearly to

shareholders. The FRCs Stephen

Haddrill said the Code will continue

to operate on the principle of

comply and explain, which has

served investors and the corporate

sector well for over 20 years.

Viability keyto long term

With the EU losing around 1 trillion a

year due to tax avoidance and

evasion, the OECD has recommended

sharpening of transfer pricing rules,

possibly restricting tax relief on

intragroup royalty and interest

payments. The corporate tax system is

the outcome of some 3,000 treaties

and the OECD wants to see reforms so

firms cant manufacture transactions

purely with a view to generating tax

credits twice.

The OECD has also recommendedcountry-by-country reporting (CBCR).

This would require multinationals to

disclose capital, revenues, profits,

taxes and employees for each country

in which they operate, which can

highlight profit shifting. However, the

OECD limits the availability of CBCR to

tax authorities only.

These proposals do not address the

fundamental faultlines. In a world of

global monopolies, independent arms

length prices are difficult to ascertain.

So transfer pricing disputes will

remain. The tax system regards each

company subsidiary as an independenttaxable entity rather than part of an

integrated group. Thus, HSBCs 500

subsidiaries are taxed separately,

leaving plenty of room for tax

arbitrage. An alternative system,

known as unitary taxation, would base

tax on consolidated profits,

apportioned to each country according

to sales and other factors. All

intragroup profits/losses are negated

and profit shifting can be checked. But

big corporations oppose this and the

OECD has danced to their tune.

PREMSIKKA

OECDproposalsare a missedopportunity

Prem Sikka is professor

of accountancy at the

University of Essex

Hatfield:

talking

to PQs

RAP FOR AAT STUDENTSThe AAT disciplinary team has been busy recently.Among those disciplined are Emma Way, who gainednational notoriety for being convicted of

driving offences after tweeting about a

collision with a cyclist. She has been

found guilty of misconduct by the AAT

and has been reprimanded.

George Gray, who has been convicted

of rape while a student member, has by

consent had his student membership

withdrawn.

Student membership has been

withdrawn for 15 months from Thato

Dihutso after it was found she took a

computer-based assessment for another student.

Thobile Nxumalo was found guilty of having

unauthorised material in her possession while sitting an

assessment. She was severely reprimanded

and debarred from sitting assessments for

six months, and fined 50.

Nomfundo Dlamini was found guilty of

possessing unauthorised material while

sitting an assessment. She also assisted/

encouraged another AAT student to breach

codes by preparing crib notes with them.

She has been severely reprimanded and

fined 50.

Finally, student Monametsi Die took an

exam for another student. He was severely

reprimanded and fined 50.

Emma Way


11/44

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PQ news

In June, the Home Office announced a

further tightening of the rules relating

to the issue of student visas, and

suspended 57 private colleges and

three public universities from being

able to issue visas to international

students. Home Office minister James

Brokenshire said: We have already

removed some 750 bogus colleges

from the list of those entitled to bring

foreign students to Britain. Many of

the private colleges are providers of

full-time ACCA courses and so readersof PQ magazine will have an interest

in these developments. The latest

crackdown was prompted by

undercover reporting on the BBCs

Panorama, aired in February. They

secretly filmed English language

testing for the TOEIC (Test Of English

for International Communication)

exams run by an organisation called

ETS. They appeared to find answers

being read out to students by

invigilators cheating. The Home

Office launched a detailed and wide-

ranging investigation into actions by

organised criminals to falsify Englishlanguage tests for student visa

applicants. It found that over 30,000

TOEIC certificates have been falsified

and 19,000 others are questionable.

Colleges and universities have

admitted students relying on these

falsified TOEIC certificates and the

Home Office crackdown relates to

whether private colleges and

universities have abused their highly

trusted status. Cheating, falsifying

certificates and working in breach of

immigration rules are not compatible

with the professional ethics of

accountancy. Some colleges and

universities are now no longer

suspended but you should check with

your provider if you have any doubts.

CARLLYGO

Visa frauddoes theprofessionno credit

Professor Carl Lygo is

chief executive of BPP

Cant read it!

IRISH EYES SMILING

CIFPA win

CIPFA has won

the contract with the

NHS Leadership

Academy to be the

exclusive provider of

tuition services for

the finance

management stream

of the NHS

Graduate Scheme.

The contract has just started

and will initially run for two

years, with graduates on the

scheme expected to become

fully qualified CIPFA

accountants as part of their

training.

F4 a fairer test

The new-look F4 means

the well-prepared candidates

should get the result they deserve,

says Kaplans Sue Tuffnell. She felt

the exam will be more balanced

and less of a lottery regarding

which topics appear on the paper.

Find out how to prepare for the

new test on page 16.

Final audit changes

The Competition & Markets

Authority has published its final

order, putting into action major

changes in the audit market.

These include the requirement for

FTSE 350 companies to put their

statutory audit engagement out to

tender at least every 10 years.

There are also measures to

strengthen the accountability of the

external auditor to the Audit

Committee and reduce the

influence of management.

Inbrief

Illegible handwriting and poor

layout of answers is still a

common issue in many ACCApapers, according to the latest

batch of examiners reports

The F5 examiner highlighted

this as a big

problem in

June. The F7

also revealed

many markers

are struggling

to read

students

answers. Meanwhile, the F8

examiner wondered why

candidates are not using

columns for questions when

this would have helped to

maximise marks.

The P4 examiner reminded

PQs that legible, well-presented

and well-structured answers

often get high marks. Good,

clear handwriting is essential,

says the latest report. Poorpresentation and illegible

handwriting also got a mention

in the P7 examiners report.

Another worry

is the fact that

many candidates

seem to be

avoiding the

ethics elements

in the exams.

The P2 examiner

especially felt in many ways

this was worrying as it would

be hoped at this level of exam

that candidates would be able

to discuss an ethical scenario

in some detail. It was stressed

that additional marks can be

easily gained for well-argued,

ethically-based answers.

Mental healthissues top listThis summer, for the first time, mental health

topped the list of reasons for enquiries madeby chartered accountants and their families

to the Chartered Accountants' Benevolent

Association (CABA) .

Employment usually heads the list of

issues presented by members, but these

were pushed into second place.

The most common mental health issue

recorded by CABA during 2014 is stress,

followed by depression, bereavement and

relationship issues. CABA's Kelly Feehan

said: These statistics should not be taken

as a direct indication that mental health is

becoming an increasing issue among

accountants. We have little or no evidence

that this is the case. She said the figuresshow that when it comes to mental health

accountants are just like anyone else. She

went on: When they come under pressure,

as they often do at work as part of their

profession, they can develop problems.

Northern Ireland must be the place

to be if the investment of three of

the Big 4 firms is anything to go by.

PwC is to create 800 new jobs in

a 40m investment in Northern

Ireland. This includes thedevelopment and delivery of cloud-

based management information

services and social project

management teams delivering

support worldwide to the firms

clients.

The jobs are aimed primarily at

graduates and follow an already

successful expansion of PwC

activities, through which the firm

has created over 300 jobs in the

past two years.

PwC top man Ian Powell said the

announcement reinforces PwCsstrategy to develop innovative client

services that draw on the strength

of the UKs skilled workforce.

Deloitte also recently announced

that it will be investing more than

30m in the next five years,

creating another 338 jobs across a

range of services. Its phase 2,

launched recently by First Minister

Peter Robinson, will deliver 338

jobs by 2019, in addition to the177 posts announced last year (for

phase 1).

When complete, Deloitte

estimates the 338 jobs will inject a

massive 11.4m annually in

salaries into the local economy and

bring the total number of people

employed by Deloitte in Northern

Ireland to more than 700.

Back in May, PQ revealed EY

was creating 486 jobs in Belfast.

Half of these jobs will be inmanagement consultancy and most

of the remainder in other functions,

such as auditing. The firm already

employs 1,500 people in both

Northern Ireland and the Republic.

Stormonts ministerial executive

has confirmed it will be contributing

19m a year in direct salaries once

all the roles are filled.

Mike McKerr of EY Ireland said:

We are delighted to bring this

investment to Belfast, which will

further enhance our current service

offering to clients. He confirmedthat since July 2013, EY has added

180 people to its payroll across the

Republic and Northern Ireland.

The big question then: KPMG,

what are your plans for the

province?

Changing fortunes: investmentwill boost Belfasts economy


13/44

To get the recognition you deserve now, visitaat.org.uk/alternativeroutes or contact our

Customer Service team at [email protected] or +44 (0)20 3735 2401.

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AAT is a registered charity. No. 1050724


14/44PQ Magazine November 201414

PQ Awards 2015

ITS TIME TO GET

NOMINATING

So, a new lush awards venue has been

booked for early next year the Caf de

Paris. All we need now are the stars to fill

this top London Venue on Tuesday 10 February

for the PQ Magazine awards 2015.

How do you guarantee your ticket to the top

awards ceremony around? Well, it helps to get

on one of the shortlists! But, as we say, every

year you cant win an award unless you enter

sad to say, some people are still surprised when

we tell them that.We have some great new sponsors this year in

the shape of the ACCA, CIMA, CIPFA and

ICAEW to name just four big ones. They know

just how good these awards are and wanted to

get involved. And, of course, a big thank you

goes to our regular supporters!

There must be someone you know who really

deserves one of our PQs. It could be you and

your colleagues as our Accountancy Team of

the Year, enjoying the dizzy lights of London

and dont forget to nominate your training

manager, you could make a friend for life!

Nominating couldnt be any easier all we

want is 250 words, plus any supporting

evidence, as to why your nominee should win.

Dont forget, you can enter yourself it shows

initiative, we think.

You can download an application form fromour website just click on the pq awards bar.

Or you can email your entry direct to

[email protected].

Finally, you can send your entry to: the Editor,

PQ magazine, 4th floor, Central House, 142

Central Street, London EC1V 8AR. This years

deadline is Friday 19 December. PQ

We have begun the search for the winners of 16 PQ awards the best

awards around! You too can make your CV shine with a PQ shortlisting

CATEGORIES

PQ OF THE YEAR

NQ OF THE YEAR

DISTANCE LEARNING STUDENT

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YEAR PUBLIC SECTOR

ACCOUNTANCY COLLEGE OF

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LECTURER OF THE YEAR PUBLIC

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ACCOUNTANCY TEAM OF THE YEAR

INNOVATION IN ACCOUNTANCY

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LIFETIME ACHIEVEMENT

OUR SPONSORSNo award ceremony is possible

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Winning an award will get you

noticed: ask our past winners!

Students Chris Vickers and Sanam Razaq,

from the MMU Accounting and Finance and

Economics Society, with their PQ magazine

award for Best Student Society

Quick Learning AAT student Donna Smith, who

won our Distance Learning Student of the Year

award, got star billing in Accounting Technician

The accountancy team and students at

Birmingham Metropolitan College celebrated after

winning our College of the Year Public Sector


15/44

December 2014 Exam

Revision Classes willcommence on

Saturday 8th November 2014

Lecture Timings:9:30am to 4:30pm

Quality, Affordability, Employability

LCA Business School London, 19 Charterhouse Street, London EC1N 6RA

Tel: 020 7400 6772 enrol with us on-linewww.lca.anglia.ac.uk

OUR

REVISIONC

OURSE

S Exam focused course

ACCA - Revision Kit

Practice Questions

Advice on Exam Techniques

Past Exam Evaluation

Emphasis on Key Topics

P1 Rev

P1 Rev

F7-F9 P1-P3 P5-P7F4-F6

F4 Rev

F4 Rev

F6 Rev

F6 Rev

F5 Rev

F5 Rev

F7 Rev

F7 Rev

F9 Rev

F9 Rev

F8 Rev

F8 Rev

P3 Rev

P3 Rev

P2 Rev

P2 Rev

P7 Rev

P7 Rev

P5 Rev

P5 Rev

P6 Rev

P6 Rev

DateDay

Saturday

Saturday

Saturday

Sunday

Sunday

Sunday

08 November 2014

15 November 2014

22 November 2014

09 November 2014

16 November 2014

23 November 2014

Saturday

Sunday

29 November 2014

30 November 2014


16/44

Pass rate: 45% (December 2013)

Technical difficulty: 3/10

Weighting of calculations: 0%

Weighting of discursive

elements: 100%

Exam technique: 4/10

The syllabus .

The F4 exam changes format dramatically from

November 2014. Students will have a choice as

to whether to sit a computer based exam or a

paper based exam.

Format of computer based exam

The examination consists of:

Section A

25 x 2 mark objective test questions.

20 x 1 mark objective test questions.

Section B

5 x 6 mark multi task questions.

All questions are compulsory. Duration is two

hours.

Question description

Section A: The two-mark objective questions will

give the candidate four alternative answers.Candidates will be expected to usually give one

correct answer, although sometimes it may be

two depending upon the nature of the question

asked. Some of the questions will be simply

identifying the correct legal principle and some

will require application of a legal principle and

may be based on a well-known case.

The one-mark objective questions will give the

candidate three alternative answers. Candidates

will have to give one correct answer.

Section B: The multi task questions will usually

be scenario-based questions, and may be based

on relevant important cases. Candidates will be

expected to apply their knowledge to give the

correct answers from the different alternatives

given. A minimum of three different questions

may be asked on each scenario. Due to the

nature of the multi task questions it is unlikely

that there will be questions on the English legal

system.

Format of paper based exam

The examination is in the same format as the

computer based exam. The difference is that the

Section B multi task questions require the

candidate to write short essays as their answer.

Candidates will be asked questions on the

scenario and have to apply the law to the

scenario. There may be 2 or 3 parts to each

question.

Syllabus content

The content of the syllabus for both formats is

exactly the same. The main syllabus areas are:

The English legal system

This covers:

The civil and criminal courts.

The different sources of English law.

The Law of ObligationsThis covers:

The formation of contracts.

The content of contracts.

Breach of contract and remedies.

The law of torts and professional negligence.

Employment law

This aspect of the syllabus covers:

The contract of employment.

Dismissal and redundancy.

The Formation and Constitution of business

organisations

This deals with:

Agency.

Partnerships.

Corporations and legal personality.

The formation and constitution of the

company.

Capital and financing of companies

This includes:

Share capital.

Loan capital.

Capital maintenance and dividend law.

Management, administration and the regulation

of companies

This includes:

Company directors.

Other company officers.

Company meetings and resolutions.

Insolvency law

This deals with:

Different types of liquidations.

Administrations.

Corporate fraudulent and criminal behaviour

This includes:

Insider dealing.

Money laundering.

Fraudulent and wrongful trading.

Content of new syllabus v old syllabusThere are no additions to the new syllabus from

the old syllabus. The examiner has removed

corporate governance and the structure and

operation of tribunals. There is less emphasis on

human rights.

Sitting the F4 exam .

Previously, students were required to learn a lot

of information which had to be reproduced when

answering questions. Reference was required to

the most important cases and statutes.

Candidates used to be able to do some

question spotting, which enabled them to miss

out certain areas of the syllabus.

The new format does not require rote learning

of definitions, etc, but candidates will need to

study the whole syllabus. The use of a large

number of multiple-choice questions allows the

ACCA to exam every area of the syllabus even

the most fringe areas. The scenario questions

require not only knowledge of the law, but

understanding of it to apply it correctly.

This means that there is no escaping the need

for more knowledge of the whole of the syllabus

in order to score well. Do not fall into that the

trap that as it is mainly multiple choice questions

the paper is very easy to pass.

However, a well-prepared candidate should

feel more confident about achieving the result

they deserve as the exam will be more balanced

and less of a lottery regarding which topics

appear on the paper.

Sue Tuffnell is the F4 Content Specialist at

Kaplan Financial

PQ

16

PQ ACCA F4 paper

PQ Magazine November 2014

Sue Tuffnell explains the changes

PQs will face in the all-new F4

Corporate and Business Law paper

BE A LEGAL EAGLE


17/44PQ Magazine November 2014 17

ACCA exams PQ

H

ow, PQ magazine asked the ACCAs

Alan Hatfield, was he going to deliveron his promise after the last set of

exam results to provide students with additional

learning support, focusing on the optional

papers?

He explained that ACCA is currently working

on a number of initiatives or scoping others out,

but he wanted to reiterate that it is championing

a flexible approach to help its students success.

Employers want greater flexibility so that

students are aligned to business needs and not

exam timetables, Hatfield stressed. He went on:

As a result we will be introducing additional

exam sessions giving students the opportunity to

sit exams four times a year. Unlike otherprofessional bodies, our exam sessions will be

available to all students and not just re-sits.

Hatfield believes the changes will mean that

students and the organisations that support

them will be able to choose the pace at which

they progress through the qualification, while

also having the flexibility to make decisions

based on work and personal commitments.

Responding to calls to avoid big bang changes,

the ACCA starts the first phase with an exam

session in September 2015 in some key

markets. Then from 2016, all ACCA students will

be able to take exams in March, June,

September and December.So how is he going to help those striving for

success in the optional papers? Hatfield revealed

that the ACCA is seeking feedback directly from

sitters. We are in the process of interviewing

students who failed an optional paper on their

first attempt, then passed second time, he said.

These candidates are being asked what they did

differently second time around and what advice

they can pass on to other students about the

approach they took.

Hatfield has promised that these interviews

can then be issued in a targeted way to other

students via PQ magazine and Student

Accountant. He believes that by doing this the

ACCA is tackling the reasons for failure head on

and finding ways to improve.

As PQ went to press, the ACCA was also

running an online webinar pilot, which covered

study at the professional level generally. Hatfield

said he expected high levels of engagement here

and was hoping for positive feedback. He can

then give the green light to rolling out sessions

for each of the optional exams.

Tutors from Platinum Approved Learning

Prividers (ALPs) are involved in the pilot; they

will discuss the challenges of the P level and

generally give as much advice as possible on

how to achieve success in the exams. The pilot

will be available globally, as would any further

webinars.

At the end of September, the P5 Qualification

Technical Advisor, a key member of the

examining team, recorded two videos (one for

tutors and one for students). This gives clear

advice on how to achieve success in P5. ACCA

is also planning to arrange the same for P4, to

be released in time to support the December

exams.

Finally, the ACCA is using social media. It has

put in place a programme of Facebook Q&A

sessions and is looking to focus on options in

the run up to the December sittings. The

sessions last an hour and include the ACCA

publishing team, the relevant Qualifications

Technical Adviser (QTA) and, if appropriate, a

tutor from a Platinum ALP. This will be an

interactive session where students can post

questions and ACCA replies. PQ

PQMAGAZINE

GOESGLOBALSign up for the Emagazine and read PQ magazineno matter where you are online. Go to

www.pqmagazine.co.uk and sign up for FREE today

online. Go to

Alan Hatfield, ACCA Director

Learning, wants to help students

pass. Heres what he is planning to

help them turn a fail into a passHELPING PQs

TO SUCCEED



PQ ICAEW spotlight

This month the examiners look

at valuation techniques, which

crop up in the ICAEW Financial

Management exam

Things are only worth what

someone is willing to pay. When

valuing a company, both the buyer

and seller will want an estimate of its value.

In practice, both will determine a range of

values within which they can negotiate.Historically, valuation exam questions

have been with or without a present value

calculation included. Candidates should

not expect the big NPV question on every

paper. NPV questions will continue to be

set, alongside valuation questions requiring

discounting knowledge and those that do

not.

The asset based approach requires a

calculation of the balance sheet value of

the equity (= net assets), which may or

may not require revaluation, using up to

date figures (e.g. for non-current assets).

Many candidates fail to pick up the historic

net assets figures direct from the financial

information provided (with no adjustment

required), choosing instead to focus on

assets rather than assets less liabilities.

The revaluations required the substitutionof two new values to replace the historic

figures for both companies, and a

recasting of the balance sheet total for net

assets. Many candidates in March 2014

could not perform these straightforward

calculations.

Patrick Connelly outlines how you can organise your life to give yourself the best chance of getting a pass

What is it worth?

Get a diary and work out how many days

you have between now and the exam.

Transfer this to an Excel spreadsheet (I am

sure as an accountant you will enjoy this)

and then assign an activity to each day.

Write in all your existing commitments such

as holiday, work and tuition dates. You will

instantly realise how few extra days/evenings

you now have left to undertake revision.

Contact your tutor to determine the

questions that will be attempted during the

course; this will avoid repetition when

planning question practice. Ask them if they

can recommend extra questions to attempt.

ICAEW has many past exams on their

website target the 2014 exams as they will

not be in the learning materials and have the

correct syllabus content.

Question practice is key it is not efficient

to endlessly re-read the manual or make

notes. If you are entering the revision phase,

practising exam standard questions is the

most important.

Distribute the questions you are aiming to

attempt over your calendar and be realistic:

you are unlikely to do five questions when

you come in from work. Perhaps try one

question after work for three weekdays and

then five questions over the weekend.

Keeping this up over a few weeks will give

you good coverage over the entire syllabus.

Stick to the programme; there is no point

drawing up this plan and not undertaking

the question practice. If you miss a nights

revision, ensure you catch up.

Have some good, clean fun, such as

watching TV or reading a book. Spending

all night in the pub is not a good idea you

are better than that. There will be time for

non-clean fun such as the pub after the

exam.

Patrick Connolly, Kaplan Financial

PQ

Income based approachesss

Exam questions normally require

earnings, dividends or cash flow based

valuations or some combination.

The earnings technique requires two

key inputs. The first is a P/E ratio. If the

company is unquoted, sufficient data will

exist on comparable quoted companies

P/E ratios in the question data to enable

you to find a suitable P/E. If it is a quotedcompany, it will already have a P/E ratio.

A non-marketability adjustment is only

needed for the unquoted company. Many

candidates unnecessarily lower the

quoted companys P/E. For quoted

companies, a premium is usually offered

on the existing published share price,

and the P/E ratio used to value

comparable companies in recent

takeovers can be used rather than the

companys own P/E ratio.

Dividend-based valuations make use of

the dividend valuation model (DVM) or, in

a simpler form, dividend yield wheregrowth in dividends is ignored. Use the

formula sheet, particularly if you cannot

remember what the dividend yield is (put

g=0 in the DVM and you have it).

Present value of cash flows valuation

questions may be similar to project NPVs;

namely, relevant cash flow, inflation and

tax calculations may all be required or

the cash flows may be given in a

simplified form. You should understand

the technique, its weaknesses, and the

calculations. In June 2014, candidates

struggled to calculate the present value of

growing cash flows beyond the period ofcompetitive advantage, did not subtract

the value of debt to determine the value

of equity (discounting at the WACC finds

the value of debt and equity combined)

and did not add the value of short-term

investments at the end. PQ

Sorting out your ICAEW revision timetable


19/44

Our new and improved professionalaccountancy qualification for 2015

the publicservices experts

The CIPFA Professional Qualificationwas an essential foundation

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The public services environment we operate within is changing, as a resultour Professional Qualification is too. It will:

Increase the focus on the wide range of commercial skills needed

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Enhance the Practical Experience Portfolio (PEP) by placing greater

emphasis on the role of the employer.

Enable greater flexibility around blended and online learning options.

This will put our students in the best position to build a successful

career in public finance.

To find out more visit www.cipfa.org/newPQ

or email [email protected]

Richard Blakey CPFA

Head of Finance,

Essex County Council

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CIMA exam tips PQ

BPP.

P1

Working capital management

the calculation of the cycle, the

impact of decisions on the cycle,

EOQ calculation, cash flow forecast

and compound interest calculation.

Operating statement reconciling

budgeted to actual profits including

fixed overhead variances and

possibly mix and yield calculations. NPV including tax and inflation

and/or incremental revenue and

costs.

Sensitivity calculations and yield

to maturity using the IRR.

Expected values, joint probabilities

and risk based decisions.

Decision trees requiring both

appropriate construction and

evaluation.

Activity based costing calculations

and discussion of benefits and

drawbacks.

Benefits/problems of budgeting

techniques for discursive marks.

P2

Limiting factors calculations and

discussion of shadow prices.

Pricing optimal pricing and

discussion of pricing policies.

Learning curve calculations and

impact on variances.

Budgeting impact of

participation on motivation.

Performance evaluation via

financial/non financial measures.

Transfer pricing discussion of

differing policies and their

consequences linked with NPV.

Brought forward knowledge from

P1 this can be pretty random, so

expect the unexpected.

P3

Risk management being able to

evaluate risks and discuss their

significance in the context of the

scenario (pre seen and optional).

Corporate governance (but not

always in a profit-making context)

and its role as a form of

organisational control, including

identifying weaknesses and

recommending improvements.

Controls (especially organisational,

HR and management accounting so dont forget what youve learned

in P1 and P2!).

Internal audit especially as a

form of control and when being

used for specific internal control

purposes (such as fraud

investigations or value-for-money

projects).

Financial risk (including hedging

controls and economic risk in the

context of transnational

organisations exposed to multi-

jurisdictional currency risk you

must be prepared to discuss these

risks as well as perform the

necessary calculations).

IT/IS systems in specific

organisations for specific purposes

recent examples have included

supermarket customer data

analysis, transport route revenue

analysis and online vacation

booking systems.

E1

The political, social and economic

context explaining how a business

relates to the national and

international environment it finds

itself in.

Operations management

explaining how an organisations

relationship with suppliers has

developed (e.g. TQM, relational

procurement).

Information systems discussing

how information systems can be

used to add value to an organisation

(potentially linked to HR/operations

issues).

Marketing applying key

concepts such as the marketing mix

to a scenario that could have ethical

implications.

Managing human capital

explaining how HR can maximise

the potential of an organisation,

both strategically (HR plan) and

operationally (recruitment andselection).

E2

The competitive environment

discussing and distinguishing

between different competitive

environments (e.g. using

stakeholder mapping and PEST).

Strategic management

discussing how a firm develops a

strategy, including the rational

planning model and its alternatives.

Project management explaining

what a project is and discussing the

tools and techniques used to

manage it (e.g. 4-D/7-S models).

Linking project management to

the external environment

(e.g. stakeholder management/

reconciling time, cost and quality

criteria).

Leadership discussing the

difference between power, authority

and responsibility as well as

understanding and managing

conflict.

Managing the relationship

between manager and subordinate,

including teamwork, legal issues

and interpersonal (negotiating/

communication) skills.

E3

The competitive environment:

The way an organisation develops

strategy is affected by its external

This is it, our lastever exam tips pull-out supplement

for the CIMA November exams. Good luck you lot!

Continued on page 22

TOP

OFTHETIPS

environment and stakeholders. Be

familiar with the PEST and Five

Forces models.

Strategic planning approaches

vary from the rational model to

emergent strategy.

Information systems (IS) and

information technology (IT) can

have a significant impact on an

organisation and its competitiveposition.

Strategic position and choices:

Internal resources and capabilities

of an organisation shape its

strategic options.

Be able to identify different

strategic options, using models

such as Ansoff, Lynch and Porters

generic strategies.

The evaluation of strategic options

should be structured around the

SAF framework.

Change management:

Be able to discuss the changeprocess and identify triggers for

change, be able to draw on models

such as Balogun & Hope Haileys

change matrix and Lewins Force

Field Analysis.

You may also need to recommend

how change can be managed

successfully to support an

organisations strategy, and how

resistance to change can be

overcome, referring to the McKinsey

7S model.

Implementation and performance

evaluation: Performance measurement is very

important for an organisation to be

able to evaluate the performance

implications of a given strategy, and

whether it is delivering the benefits

an organisation hoped it would.

Performance measures can be

both financial and non-financial, be

able to refer to the balanced

scorecard and the performance

pyramid.

F1

Section A:

Taxation (three to five questions)

definitions of key terms such as

jurisdiction and hypothecation;

calculations such as corporate tax

due, underlying and withholding tax

and sales tax.

External audit the purpose of

the audit and the rights and duties

of the auditor.

Ethics definitions of the

fundamental principles and ethical

threats.

Accounting standards questions

testing definitions/calculations on

areas such as IAS 18 Revenue, IAS

38 Intangibles and IFRS 8

Operating Segments.

Section B:

Taxation (three to four questions)

written questions relating to tax



PQ CIMA exam tips

definitions such as underlying and

withholding tax and the

administration of taxes as well as

more detailed calculations on the

areas of direct, indirect,

international tax and deferred

taxation.

External audit practical

questions based on a scenariorequiring you to consider whether

the auditors report needs to be

modified.

Ethics practical questions based

on a scenario requiring you to

explain the ethical dilemma and

consider the practical steps that

could be taken to address the issue.

Accounting standards written or

computational questions on areas

such as IAS 7 Statements of Cash

Flows, IAS 11 Construction

Contracts, IAS 17 Leases and IFRS

5 Assets Held for Sale andDiscontinued Operations.

Section C:

Prepare the statement of profit or

loss and other comprehensive

income, statement of financial

position and statement of changes

in equity for a single entity

(including adjustments for

inventory, property, plant and

equipment, intangibles, current and

deferred tax, provisions, leases and

construction contracts).

Prepare the statement of cash

flows for a single entity. Prepare the consolidated

statement of financial position and/

or the consolidated statement of

profit or loss for a parent, subsidiary

and associate (including

adjustments for goodwill, the

impairment of goodwill, inter-

company trading and unrealised

profit).

The preparation of financial

statements for a single company

and a group are the most common

requirements in Section C. Where

the statement of cash flows is

tested, it is likely that this will be

worth 1520 marks and a separate

requirement will examine another

aspect of the F1 syllabus.

F2

Section A:

Groups question numerical

(consolidated statement of profit or

loss and other comprehensive

income, financial position or

changes in equity; extracts/workings

from group financial statements) or

written question (explanation of

accounting treatment of various

investments).

Interpretation of accounts

question segment reporting

(usefulness, limitations, analysis),

limitations of financial analysis,

interpretation of pre-calculated

You will often be asked to

produce a forecast to assess

whether objectives will be achieved.

Discussion areas could include

analysing the appropriate dividend

policy and the inter-relationships

between dividend, financing and

investment policies

Financial decisions:

You are often required to analysea source of finance (leasing is an

especially important area),

including cost of capital

calculations and discussion of

gearing levels; knowledge of the

role and limitations of Modigliani &

Miller theory is very important.

Make sure that you can discuss

the role and structure of a Treasury

Department.

The different working capital

financing and dividend strategies

are a popular area for this

examiner.Investment decisions and project

control:

Overseas investment appraisal is

one of the most important areas in

this syllabus and is often tested in

question 1. Make sure that you

revise this area very carefully and

that you can apply the two different

methods for assessing overseas

investments and also that you can

discuss risk and financing issues,

too.

Business valuations are another

crucial area and is also commonlyexamined in question 1 of the

exam; make sure that you can

apply all of the valuation methods

and that you can debate financing

issues and post acquisition

integration.

Adjusted present value and real

options are also important areas

where a solid knowledge is

important.

Make sure that you are able to

discuss project control techniques

such as post auditing.

Kaplan FinancialE1

Section A:

Expect the questions to cover the

full range of the syllabus.

Sections B and C:

The global business environment:

Emerging economies with

possible link to outsourcing/

offshoring.

Culture.

Corporate political activity.

Information systems:

System testing and/ or

maintenance.

Resistance to change.

Operations management:

Capacity planning/inventory

management.

Cousins or Reck and Long.

Marketing:

Market planning process and

the 4Ps.

B2B and B2C marketing.

Managing human capital:

HR theories (e.g. McGregor).

HR planning including

learning, training and development.

E2

Strategic management: Corporate appraisal and its

components, especially PEST and

Porters five forces.

Corporate social responsibility.

Stakeholder analysis.

Relationship management:

Corporate Governance and ethics.

Mentoring.

Communication.

Project management:

Benefits/drawbacks of a single

methodology such as PRINCE 2.

Project management tools, such

as CPA or WBS. Managing project teams.

E3

Strategic analysis and evaluation.

Mission and objectives.

Corporate social responsibility

and ethics.

F1

Company income statement,

statement of financial position,

statement of changes in equity

examined as a section C question.

Consolidated income statement

and statement of financial position

incorporating adjustments for intercompany selling/balances,

unrealised profit, impairment, fair

value and depreciation. Likely to be

a section C question.

Statement of cash flows using the

direct method (likely to be the

section B question).

Finance lease payment in

advance.

IAS 11 Construction contracts

possibly a loss making scenario.

IAS 37 Provisions and

contingencies.

PPE note including

depreciation, disposal, revaluation

and possibly asset held for sale

could be a section B question or

part of a note in section C for a

single entity question.

Business tax:

VAT calculation and impact on

profit.

Avoidance versus evasion

explanation.

Calculation of deferred and

current tax as part of a section C

question.

F2

General interpretation plus

limitations of analysis/further

information.

Earnings per share.

Financial instruments.

Share based payment.

Continued from page 21ratios/statement of cash flow or

written/numerical EPS question.

Written question on external

reporting, for example, human asset

accounting, environmental/social

reporting, narrative reporting (such

as management commentary or

operating and financial review), or

convergence between US GAAP

and IFRS. Two multi-topic or single-topic

questions on Issues in Recognition

and Measurement on some or all of

the following:

Classification, recognition, initial

and subsequent measurement of

financial instruments requiring

explanation of accounting treatment

and/or calculations and/or journals.

Substance over form

discussion of accounting treatment

(risks and benefits) and journal in

context of consignment inventories,

sale and repurchase, structuredentities, debt factoring or loan asset

transfers.

Share-based payment cash or

equity settled; requiring explanation

of accounting treatment and/or

calculations and/or journal entries.

Pension accounting

numerical question with notes to

financial statements or written

question explaining accounting

treatment for defined benefit plan

and/or defined contribution plan.

Asset valuation and changing

prices explanation of, comparisonbetween or advantages and

disadvantages of historic cost

accounting, current cost accounting

and current purchasing power;

IFRS 13 Definition of Fair Value and

/or advantages and disadvantages

of fair value accounting.

Section B:

Group financial statements,

e.g. preparation of consolidated

statement of profit or loss and other

comprehensive income, financial

position, changes in equity or cash

flow incorporating a change in

group structure (step acquisition

and/or disposal), a foreign

subsidiary or a complex group and

often written explanation of

accounting treatment.

Analysis of financial performance

and position in a scenario

(including some or all of statement

of profit or loss and other

comprehensive income, financial

position, changes in equity, cash

flow, segment analysis, pre-

calculated ratios). Usually, about

eight marks are available for

calculation of ratios and 12 marks

for commentary. Possible part (b)

on limitations of ratio analysis or

extra information required.

F3

Formulation of financial strategy:



CIMA exam tips PQ

Developments in external

reporting voluntary reporting.

F3

Section A:

In the past, section A has

generally focused on topics from

syllabus section C: Investment

Decisions and Project Control,

which accounts for 45% of the

syllabus, so investment appraisaland business valuation have been

the main topics. Although the

examiner has said that section A

will not always focus on these

areas, the last six papers have all

covered one or other of them,

emphasising how important it is to

be ready for a question on either of

these core topics.

Section B:

This will contain three questions.

Key topic areas which may be

tested this sitting are:

Rights issues (theoretical ex-rights prices).

Lease v buy decision.

The role of treasury.

P1

NPV.

Planning and operating

variances.

Decision trees and expected

values.

Working capital management.

P2

Breakeven analysis.

Relevant costing and decision

making. Participation in budgeting.

Transfer pricing.

Responsibility accounting.

Divisional performance

evaluation.

P3

Management control systems:

Employee or management risks

and controls.

Risk and internal control:

Ethics a small requirement

(around 5 marks) usually features

somewhere on the paper.

Corporate governance different

types of committees used to control

companies.

Review and audit of control

systems:

Internal audit.

Management of financial risk:

Interest rate risk and swaps

(foreign exchange risk management

came up in September 2014).

Risk and control in information

systems:

IT strategy.

IT risks and controls.

LSBF

E1

National cultural differences (The

Hofstede Model).

Implementation of systems with a

view to overcoming user resistance.

Measuring service quality

(SERVQUAL).

Pricing strategies.

Effective appraisal systems.

E2

Levels of strategy.

Porters diamond.

Transaction cost theory.

Project planning.

Network diagram.

Conflict.

Groups and teams.

Communication.

Ethics and corporate social

responsibilities.

E3

Ansoff growth strategies.

Change management on

implementation possibly via Lewin.

Management of stakeholder

ethical context.

CSF and performance measure

identification.

Using technology to enhance

advantage.

F1

Income tax and deferred tax

calculations.

Property, plant and equipment,

Pq November acca

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