F4 Corporate and Business Law
English Legal System
- · Tribunals
- · Interpretation of statute
- · Judicial precedent
- · Human Rights Act
- · Acceptance/postal rule
- · Consideration
- · Terms
- · Capacity
- · Exclusion Clauses
- · Breach of contract
- · Breach of Duty
- · Professional Misstatement
- · Defences to Negligence
- · Common law duties
- · Summary dismissal
- · Redundancy
- · Remedies
- · Types of Partnership
- · Money Laundering
- · Insider Dealing
- · Fraudulent/wrongful trading
- · Types of companies
- · Articles of Association
- · Resolutions
- · Meetings
- · Class rights
- · Directors duties
- · Different Types of Directors
- · Voluntary Liquidation
F5 Performance Management
- · Payoff tables
- · Multiproduct breakeven
- · ABC
- · Regression analysis
- · Linear programming
- · Performance management
- · Husband and wife
- · Joint investment income
- · Some exempt income
- · Adjustment of profits
- · Gift Aid donations/personal pension contributions - extending basic rate band
- · Calculation of PA based on adjusted net income
- · Employment Income - benefits
- · National insurance
- · Income tax trading loss
- · Possibly a long/short period of account
- · Capital allowances including IBA [IBA cannot be examined after this sitting]
- · Penalties for late filing of return
- · Interest on late payment of corporation tax
- · Groups - Losses
- · Separate part of question 1 or 2 or whole question 4/5 (as in June 2009/ June 2011)
- · VAT return – including some discounts and impaired debts relief
- · Cash accounting scheme/Flat rate scheme
- · Overseas issues
Capital gains tax
- · Individual making disposals
- · Disposal of chattels
- · Transfer between spouses
- · Principal private residence relief
- · Rollover and gift relief
- · Corporate chargeable gains
Sundry topics for questions 4 and 5
- · Groups – Losses / Gains Group
- · Income tax Basic Planning – comparative scenario with calculation of net cash consequences
- · IHT
F7 Financial Reporting
Consolidated statement of financial position* including an associate.
Possible adjustments to include:
- deferred consideration/share exchange
- net asset fair value adjustments
- intra-group loan/current account
- goodwill impairment**
- impairment of the investment in the associate
* UK: Balance sheet
** UK: Amortisation and possibly impairment
Preparation of financial statements from trial balance including a SOCIE*.
Possible adjustments to include:
- financial liabilities (possibly redeemable preference shares or finance
- revenue recognition
- tax and deferred tax
- prior period adjustment
* UK: Statement of the Movements in Share Capital and Reserves
Possible mixed cash flow/interpretation question to include:
- The preparation of a statement of cash flow (or part thereof)
- Calculation of ratios and a short interpretation exercise using the
statement of cash flow and ratio results.
Questions 4 and 5
Non-current (fixed) assets
Intangible asset – possibly to include research & development
F8 Audit and Assurance
- · Audit risk including analytical procedures
- · Assurance engagements
- · Ethics including fundamental principles/confidentiality
- · Systems: payroll, inventory
- · Evidence: payroll, inventory, share capital, reserves, opening balances
- · Specific standards/topics:
- ISA 530 (sampling)
- ISA 220 (review of working papers)
- Audit committees
- Not for profit organisations
- ISA 520 (analytical procedures)
- Audit regulation – International standards on Auditing
· - Completion (ISA 560 – subsequent events)
· - Auditor’s reports
Please be aware that the current examiner has suggested that the questions will not be restricted to topic areas, i.e. question 1 won’t just be about systems and controls. This is a significant difference from the previous examiner. Also be aware that recent diets for F8 have ranged from those requiring knowledge of the content of a broad range of standards (some quite peripheral to the syllabus) and those requiring grounding in the core auditing concepts/techniques. Therefore, students should be prepared for either possibilities in the December 2011 paper, or a combination of the two.
F9 Financial Management
This is a key topic which seems highly likely to be examined every time. The most common technique assessed is NPV with inflation and taxation although be prepared for a twist, possibly involving capital rationing or sensitivity calculations.
Working Capital Management
Another key topic which is likely to examined every time. Exams to date have covered much of this topic but it’s been a while since we’ve seen the more numerical aspects surrounding receivables management or the models for cash management.
This has been examined in virtually every F9 exam to date although to a lesser extent in recent sittings. Asset and cash flow based values have yet to be examined although the PE ratio and dividend valuation methods still appear to be the more examinable areas.
This topic has been heavily examined recently and in particular the impact of financing on ratios is an area the examiner likes. We’ve not seen much in relation to rights issues recently.
Cost of Capital
This topic features in virtually every exam to a greater or lesser extent. Good coverage of all of the syllabus areas is therefore essential to ensure you can handle any eventuality on the day.
Within this section of the syllabus, foreign exchange risk has been examined more often than interest rate risk. However, both are fairly under-examined areas of the syllabus as a whole and so this is a topic worth being on top of.
The Financial Management Function and the impact of the economic environment upon it
These topics have largely been ignored thus far although a general discussion of the relationship between investment decisions, dividend decisions and financing decisions was required in the June 2010 exam.
Despite the examiner’s assertion in his first article about F9 that all topics carry equal weight we can probably expect these topics to continue to take a back seat. Having said that, a questions relating to the objectives in both the corporate and NFP sectors could be a potential.
P1 Governance, Risk & Ethics
- · Corporate governance: external actors – stock exchanges & Company secretary
- · ‘Sound system’ of Internal controls
- · Normative / instrumental stakeholder views
- · Deontological and Teleological
- · Ethical Decision making – Tucker/AAA
- · CSR / corporate citizenship
- · Remuneration committee
- · Risk perception and ALARP
- · Role of Chairman and/or NEDs
- · Directors Performance Evaluation
P2 Corporate Reporting
- · Group statement of financial position
- · Retirement benefits
- · Financial instruments
- · Non-current assets & assets held for sale
- · Deferred tax
- · Revenue recognition
- · Entity reconstructions
- · Conceptual framework / Fair Value Measurement
- · Management Commentary
P3 Business Analysis
Question 1 may well be less strategic than we have seen in the past. It could feature a large element of project management for example. But it should have some element of strategic analysis, possibly a SWOT. Project management links well to other areas of the syllabus such as strategy and people and process redesign.
This will combine all elements of the syllabus (strategic analysis, choice and implementation).
· Project appraisal
· Strategy and people
· Change management
The only chapter from Kaplan’s official study text that has not yet been examined in any detail is the chapter covering finance, so students should ensure that they are comfortable with this chapter as it may appear as part of an option question.
P4 Advanced Financial Management
The examiner has expressed his desire to move the paper away from the highly technical papers set by the previous examiner and to make them more strategic and practical. This has been a feature of the last 2 exam papers in December 2010 and June 2011.
At the March 2011 ACCA Lecturers’ Conference, the examiner explained that question spotting is dangerous at this level – it is important that students should study all parts of the syllabus in detail.
However, for December 2011, we would advise students to focus on the following core syllabus topics in particular:
· Net Present Value – including foreign currency cash flows
· Bond yields and bond values
· Risk adjusted WACC
· Discussion of financing options
· Interest rate hedging – options, futures and FRAs
P5 Advanced Performance Management
It is not easy to predict questions for this paper and the examiner may test a topic that has come up in the last or recent exams.
· CSFs and KPIs
· Strategic analysis tools, i.e. SWOT, benchmarking
· Gap analysis
· External analysis
· Ethics / CSR
· Budget preparation/forecasting
· IT developments
· Performance measurement
· Not-for-profit organisations
· League table and targets in the public sector
· Evaluation of financial and non-financial performance (may examine the performance pyramid / prism)
P6 Advanced Taxation
- · Overseas aspects of CGT
- · Corporation tax groups with consortium relief
- · VAT groups
- · IHT vs CGT
- · Lease vs buy assets
- · Employment income: share options and redundancy payments
P7 Advanced Audit and Assurance
Core areas (as per examiner’s approach article) likely to be examined in every paper:
- · Engagement planning and risk assessment (business risk?);
- · Engagement procedures (i.e. evidence);
- · Ethics and professional issues;
- · Engagement reporting (ISA’s 700, 705, 706 in particular);
Subjects of recent articles yet to be examined:
- · Unmodified audit reports (ISA 700) (October ‘11 article).
- · ISA 540 Audit of Accounting Estimates.
- · Auditing in a Computer Based Environment;
Significant topics not examined for at least 18 months:
- · Laws & regs (ISA 250);
- · Fraud
- · Money laundering;
- · Forensic audit;
- · Written representations;
- · Quality control (ISA 220);
- · Obtaining work;
- · Outsourcing/internal audit;
Please note; the UK strand is also very likely to include an aspect of Insolvency.
Please be aware that the whole syllabus is examinable. Whilst the above topics are likely to be examined in forthcoming sittings this does not mean candidates should avoid other areas of the syllabus in their exam preparation.
The examiner will set 5 questions, which will all have multiple elements, so it is likely that topics other than the ones noted above will be examined in the December 2011 exam.
The examiner has noted that questions will not be restricted to topic areas (e.g. question 5 will not necessarily be on audit reporting) and instead we should expect to see topics spread across a number of questions.
In addition, please note the case study questions in section A will have the requirements embedded in the question (see the recent article from the examiner ‘Changes in question style’).