* Read examiner’s latest article “Management and Supervision” * Role of Management/Supervisor * Recruitment and Selection – a question in every previous exam to date * Motivation and Leadership * Effective Communication Practices -counselling * Authority, responsibility and delegation * Classical and modern theories of management * Objective setting; performance indicators; Management by Objectives * Individual, Groups and Team behaviour * Training and Development * Management of Diversity/Equal Opportunities
Paper 2.1 IS
Managing information systems
· Business Strategy and IS/IT alignment
· Delivering information systems – accounting issues
· Project initiation – Project Manager roles and responsibilities
· Project planning – Gantt charts
· Outsourcing
· Legacy systems
· Terms of reference
· Staff roles and responsibilities
Designing information systems
· The information systems development process – Waterfall and Spiral models
· Modelling user requirements – entity life history
· Software package selection – ITT
· External design – User friendly systems,prototyping ,data capture,4GL
· Modelling: business process model; business event model
· Invitation to tender
Evaluating information systems
· Technical IS requirements – Housekeeping and audit trails
· Implementation issues and implementation methods
· Quality assurance in the management and development process – V model
· Relationship of development processes and quality
· Investment Appraisal; NPV to include tax and inflation, other methods of appraisal (possibly IRR) and possibly capital rationing
· Sources of finance
· Performance measures
· Working capital (probably stock management but possibly debtor management)
· Modern costing techniques
· Sensitivity analysis, risk and uncertainty
· Long term finance and gearing
· Budgeting
· Variance analysis – possibly to include mix and yield variances
ACCA Paper 2.5
Q1onsolidated balance sheet and/or income statement with one subsidiary and possibly an associate or joint venture.
-adjustments fair values, unrealised profit on inventories or tangible assets, cancellation of intragroup trading, goods/cash in transit, pre-acquisition dividends.
Q2reparation/restatement of an income statement and/or balance sheet.
-adjustments for current tax, depreciation, interest and dividends. Other adjustments may relate to debt factoring or other substance over form issues, leases, financial/capital instruments, revaluations, share issues, inventory (stock) valuation, government grants or deferred tax. There may be further disclosure requirements re discontinued operations, movement in reserves or an earnings per share calculation.
Q3:Written question examining theoretical/conceptual areas or accounting standards. This could be on construction contracts, leases, provisions, inflation, intangible assets, accounting policies or substance over form issues with reference to the Framework for the Preparation and Presentation of Financial Statements (Statement of Principles).
Q4nterpretation and/or cash flow statements. There could also be a discursive part on why, for example, segment or discontinued operations disclosures are useful.
Q5:No specified format or content and will cover other areas of the syllabus. The examiner frequently includes a 'mixed bag' question, which examines three or four different accounting standards.
Possibilities this sitting include: deferred tax, construction contracts, segment reporting, events after the balance sheet date, governments grants, financial/capital instruments, discontinued operations or substance over form issues. ACCA 2.6 Exam Tips
* Management Letter on Purchases/Payroll/Computer Controls,very similar in substance to that produced by an external auditor * Non-current (fixed) assets, bank/cash and receivables (debtors) * Systems and controls –the purchases/payables and sales/receivables systems looking the most likely. * Planning and risk assessment * Professional ethics – Independence and Confidentiality * Audit/ Assurance Reports –Audit Work and Audit Reporting regarding Going Concern * Parts of questions –fraud, management representations, audit regulation, materiality, e-technology * Corporate Governance - Role of Audit Committees * Internal Audit - compared with External Audit / role in Risk Management
ACCA 3.1 Exam Tips
Q1 & Q2 :
· Risk assessment, risk management and audit strategy.
· Assurance services - prospective financial information, or reporting on non-financial information.
· Control suggestion and/or evaluation
· Audit evidence on Paper 2.5 accounting areas (see also Q3 suggestions)
· Group audit issues (including audit work on fair values)
· Planning/practice management/quality control issues
* Assurance services, e.g. performance measurement or prospective financial information
Q3. Matters and evidence - 3 scenarios.
Likely to be several scenarios covering various Paper 2.5 level accounting standards, e.g:
* Events after the balance sheet date * Provisions * Impairments * Earnings per share * Segment information * Related party disclosures * Deferred tax * Discontinued operations * Standard costing * Intangible assets * Revenue recognition * Borrowing costs
Q4. Audit reporting - Opening balances and Comparatives.
Q5. Professional and ethical matters / practice management, quality control issues scenario question.
Q6. Current issues, e.g:
* Fraud and auditor liability * International convergence * Audit exemption for small companies * Risk-based auditing * Related parties * Corporate governance * Laws and regulation
ACCA 3.3 Exam Tips
There will be new areas in the syllabus for June 2006;
· Ansoff's growth vector matrix
· BCG matrix
· Porter's five forces model
· Budgeting (short term planning)- heavily numerical with a small written element (performance measurement)
· Contribution based decision-making
· Practical aspects of pricing policy
· Performance evaluation – ROI and RI
· The learning effect
· The strategic framework – specifically a question based around the examiner’s recent article on “Business Strategy and Performance Models” (Student Accountant – April 2006) ACCA 3.4 Exam Tips
Change Management – Lewin’s approaches to change,application of how an organisation can manage change using an unfreeze, change and refreeze approach . An article appearing in Student Accountant in November 2005 may be a useful indicator here.
Global business strategies
Systems Development – the examiner may look at alternative approaches to soft systems methodology, or perhaps look for a comparison or evaluation of different methods
E-commerce – this always creeps into questions, but a big question looking at the benefits and risks is possibly overdue
SWOT analysis – ability to determine the issues which affect the business using and internal and external focus
MacFarlan/Peppard’s Strategic grid – possible application to a case study with the comparison of competing projects
Intranet – development of a system to support internal operations
Business and IS/IT alignment
BPR and the implications of changing business operations
E-commerce – development of web sites and their impact on both business and individual customer usage ACCA 3.5 Exam Tips
Section A
Manufacturing environment
· A discussion of the relative merits of different ways of making strategy
· Stakeholder analysis and objective setting
· Application of strategic analysis models
· Evaluation of strategic objectives, using the numbers included
· Marketing issues
Section B
· Marketing, including new product development
· Human resources.
· Globalisation strategy.
· Ethics and corporate social responsibility.
· Corporate governance issues ACCA 3.6 Exam Tips
Section A
The preparation of a group income statement is due, as is the translation of foreign subsidiaries and cash flow statements.
-adjustment for 4 or 5 marks on another area such as pensions, financial instruments, assets 'held for sale' or incorrect accounting entries.
Section B
Possibilities for examination include:
• 'Events' questions such as shutdown of an operation, switch to IFRS, natural or deliberate disaster, bringing in areas such as: impairments, provisions, events after the balance sheet date, non-current assets held for sale, discontinued operations, pension scheme curtailment effects, etc
• 'Mixed' questions where a range of standards are covered in separate unrelated parts of the question, such as related parties, recognition and impairment of tangible and intangible assets, foreign currency transactions, revenue recognition, leases, changes in accounting policies or deferred tax.
• Single topic questions in more detail (theoretical aspects followed up with calculations) such as segment reporting, earnings per share, first-time adoption of IFRS (IFRS 1) or financial instruments (see examiner's articles below)
• Questions on topical areas, such as the continuing attempts to bring about international harmonisation and the effect on a company's accounts of applying IFRS, possibly linked with IFRS 1, recent exposure drafts on the planned changes to groups and provisions and share-based payment
• Group reorganisations, especially if question 1 is a cash flow statement question
• Performance and valuation measures, how they are changing and how they are affected by accounting policies often appear in the exam.
• A discussion question looking at current developments in corporate reporting. Topics that could appear here include: social and environmental reporting, Corporate Social Responsibility, business ethics, accounting standards for small and medium-sized entities and reporting on the internet. ACCA 3.7 Exam Tips
Section A:
•Overseas NPV: Ability to perform a basic overseas NPV/FCF calculation. Including one off cash flows, annuities and perpetuity calculations and the knowledge of the specific issues that relate to foreign direct investment. perhaps combined with currency hedging or international cash management would seem a likely candidate for the compulsory section. The examiner will expect you to be able to discuss political risks in this context.
• Company Valuation within the context of Merger and Acquisitions: A possible question that requires a valuation under various methods like NAV, DVM, P/E Ratio and FCFs. (maybe within the context of Going Private.) Also review the share for share exchange style questions.
• Corporate Restructuring:Valuation
Section B:
• Economic Value Added – EVA
• Dividend Policy
• Portfolio Theory and CAPM - summary and alpha tables
• International economics – I.M.F., Treasury Management. Balance of payments deficits.
• Adjusted Present Value:
• Free Cash Flow feature regularly as does Black Scholes.
