BPP ACCA December 08 Exam Tips (F7, F8 and F9)

ACCA DECEMBER 2008 EXAM TIPS

ACCA Paper F7 (Global)
Financial Reporting
December 2008 Exam Tips
This exam consists entirely of compulsory questions; this makes question spotting particularly dangerous. The purpose of this analysis is to highlight areas the major syllabus areas that we would expect to be regularly tested based on recent papers, comments made by the examiner, and the sittings of the old syllabus 2.5 paper which was also examined by the same examiner Steve Scott.

Use the following tips as important areas to cover but remember that no one knows what is in
the exam, apart from the examiner. Your safest bet is to achieve good syllabus coverage in
your revision, as the examiner aims to do in the exam.

For each area described, please note the reference to useful questions from BPP’s Practice and Revision kit (P&R kit) (2008 edition) for the International Stream or UK Stream. We recommend you practise them all to get broad syllabus coverage.

All questions in the paper are compulsory

Question 1 (25 marks)

Section A will comprise one compulsory question that will examine group accounting. Group accounting is a core area and this question could ask you to produce a consolidated statement of comprehensive income/income statement (profit & loss account) and/or consolidated statement of financial position (balance sheet) with one subsidiary and an associate.

The question will include adjustments for items such as: fair values, unrealised profit on inventories (stock) or tangible assets, cancellation of intragroup trading, goods/cash in transit,
pre-acquisition dividends.

Part (b) of the question will sometimes include a related discussion element, e.g. reasons for adjusting for unrealised profit or other group topic.
2008 P&R Kit Questions: Q44 Pumice, Q41 Hapsburg (SOFP (B/S) with associate), Q40 Holdrite (I/S (P&L) with associate), Q36 Hydrate (I/S (P&L) and SOFP (B/S)), Q30 Highveldt (group extracts).

Question 2 (25 marks)

Question 2 will be preparation/restatement of a statement of comprehensive income (profit & loss account) and/or statement of financial position (balance sheet). This question will normally require adjustments for current and deferred tax and depreciation.

Other adjustments may relate to inventory (stock) valuation, leases, construction contracts, substance over form issues, financial instruments (amortised cost), leases, construction contracts, substance over form issues, financial instruments (amortised cost), revaluations,
share issues or government grants. There may be further disclosure requirements such as an EPS calculation or movement in share capital and reserves.
2008 P&R Kit Questions: Q10 Kala, Q6 Harrington, Q7 Petra, Q26 Tourmalet (also includes discontinued operation)

Question 3 (25 marks)

Question 3 is likely to examine interpretation and/or statements of cash flows. There could also be a discursive part on why, for example, profits are not the same as cash flows, or how to analyse the financial statements of a not-for-profit organisation.
2008 P&R Kit Questions: Q71 Reactive (interps and not for profit), Q81 Tabba (SOCF), Q74 Comparator (interps), Q79 Bigwood (SOCF and interps).

Question 4 (25 marks)

Question 4 will often be a written question examining theoretical/conceptual areas or accounting standards. This could be on provisions, inflation, government grants, accounting policies or substance over form issues with reference to the Framework for the Preparation and Presentation of Financial Statements (Statement of Principles).

2008 P&R Kit Questions: Q3 Porto (conceptual framework), Q51 Bodyline (provisions), Q59 Angelino (substance), Q84 Update (inflation). For other topics, see Question 5.

Question 5 (10 marks)

Question 5 has no specified format or content and will cover other areas of the syllabus. The examiner may follow a 'mixed bag' question approach, examining two or three different accounting standards.

Possibilities this sitting include: tangible/intangible assets, impairment, deferred tax, governments grants, financial instruments, substance over form issues, construction/longterm contracts or earnings per share.

2008 P&R Kit Questions: Q50 Beetie (construction/long-term contracts), Q13 Broadoak, (tangibles), Q19 Dexterity (intangibles), Q21 Wilderness (impairments), Q62 Bowtock I (leases) Q65 Bowtock II (deferred tax), Q2 Derringdo I (revenue and grants), Mock 1 Q2 Tintagel (accounts preparation & financial instruments), Q67 Savoir (EPS).

Relevant Articles (www.accaglobal.com/students)

Business Combinations

Steve Scott (Examiner), August 2008

Link: http://www.accaglobal.com/pubs/students/publications/student_accountant/archive/sa_aug08_scott.pdf

Examiner's Approach, F7 online vodcast

Steve Scott (Examiner), July 2008

Link:http://examinerinterviews.accaglobal.com/F7/index.htm

Examiner's Approach

Steve Scott (Examiner), February 2007

Link: http://www.accaglobal.com/pubs/students/publications/student_accountant/archive/scott0207.pdf

Consolidations, Problems areas in group accounts

Steve Scott (Examiner), 30 May 2006

Link: http://www.accaglobal.com/pubs/students/publications/student_accountant/archive/sa_jj06_scott_ACCA.pdf

How to approach performance appraisal questions

Steve Scott (Examiner), 28 April 2004

Link: http://www.accaglobal.com/students/study_exams/qualifications/acca_choose/acca/fundamentals/fr/technical_articles/2951583

Look out for other articles on the website in the months leading up to the exam.

[REMEMBER to Check TARC ACCA blog for more EXAM TIPS UPDATES]



ACCA Paper F8 - Audit and Assurance (International and United Kingdom)

Core Areas & Relevant Questions

The examiner has indicated the general format of the paper but remember that each question is likely to include several requirements and will range over a number of syllabus areas:

•

Question 1 – a 30-mark scenario based on a particular area of the financial statements, such as revenue/receivables or purchases/payables. Some of the requirements are likely to be based on how the area would be audited. This could include requirements relating to tests of controls and/or substantive procedures. These questions could also include the identification of control weakness and issues relating to internal audit. (Study Text Q11 Knits, Q13 Fenton Distributors, Q14 Cheque Payments and Petty Cash, Q20 Understatement)

•

Question 2 – a 10-mark question broken down into two or three factual requirements. This is likely to test your knowledge of the key principles of the ISAs. Any area of the syllabus could appear here. (Study Text Q9 Audit planning and Documentation, Q10 Audit Evidence, Q25 Audit Review and Finalisation)

•

Question 3 – a 20-mark question that is likely to include risk and audit approach. (Study Text Q22 Boston Manufacturing, Q23 Tap)

•

Question 4 – a 20 mark question that is likely to feature a more specialised audit area (Study Text Q3 Corporate Governance, Q5 Objectivity, Q7 Role of Internal Audit, Q8 Glo, Q15 Using the Work of an Expert)

•

Question 5 – a 20 mark question that is likely to include topics relating to collection of audit evidence at the end of the audit, audit closedown or reporting (Study Text Q19 Sitting Pretty, Q24 Going Concern, Q26 Wiseguys National Bakeries, Q27 Builders Merchants)


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ACCA Paper F9
Financial Management
December 2008 Exam Tips and Useful Articles
The exam is 100% compulsory which means that it is dangerous to rely on question spotting.
The purpose of this analysis is to highlight areas that we would expect to be tested based on the December 2007 and June 2008 exams. Remember that no one knows what is in the exam, apart from the examiner. Your safest bet is to achieve good syllabus coverage in your revision, as the examiner aims to do in the exam.

Financial management function:

The examiner has not yet tested the objectives of a business; this could involve calculation of key ratios such as return on capital employed, gearing, return on equity, earnings per share, dividend per share and total shareholder return. Ratios can also be used to assess the impact of different sources of finance e.g. operational and financial gearing and interest coverage.

Financial management environment:
The examiner has not yet tested this area of the syllabus, and given the dramatic changes in the economy at the moment your understanding of the economic environment and its impact on financial management decisions is a topical area that could be tested as part of a question.

Working capital management:
This is a core syllabus area and has featured heavily in all exams to date. Areas that are due to be tested include: JIT, management of payables, preparing cash flow forecasts and working capital financing strategies. The sales revenue/ net working capital ratio has been specifically mentioned and can be used to forecast finance needs.

Investment appraisal:
This is also a core syllabus area, NPV has featured heavily in all exams to date and this is likely to continue, but discounted cash flows can also be applied to asset replacement, capital rationing and a financial assessment of leasing - these have not yet been tested. Analysis of risk using probabilities and sensitivity analysis and non discounted cash flow techniques such as ARR and payback / adjusted payback are also due to be examined.

Cost of capital:
Your examiner has published 3 articles in 2008 on the use of the capital asset pricing model to create a project specific cost of capital, this area is likely to be examined.

Risk management:
This area has not been tested to date in a real exam sitting but did feature in the pilot paper as a 25 mark question. Types of foreign exchange risk and the use of currency risk management techniques such as forwards and money market hedging. Other topics that are likely to be tested here include interest rate parity theory, purchasing power parity theory and the purpose of currency futures and options (without numbers).

Useful Articles:

- on the ACCA website:

Author: Anthony Head (the examiner)

Date: January, April and July 2008

Summary: the CAPM and how it can be used to estimate a project specific cost of capital.



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Main Source - BPP


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