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ACCA PAPER 2.4
Financial management & control
This paper is divided into two sections. Section A is a compulsory scenario-based question of 50 marks. Section B has four questions of 25 marks each , the candidate answers only two.
The examiner, Tony Head, has indicated that the emphasis for Section A will be on financial management. In preparation for the June 2005 exam, the student should cover (and practice) questions on the following areas:
* Financial management objectives.
* Management of working capital (financing types, debt factoring/ discounting, cash and stock).
* Sources of finance (equity and debt).
* Capital expenditure and investment (NPV, IRR, capital rationing, borrow or leasing options).
One of the questions in section B, Tony has warned, will be entirely discursive. The key areas to cover and practice on management accounting are:
* Decision-making (product mix, make/buy decisions).
* Standard costing and variance analysis (mix and yield variances, operating statement).
* Budgeting and budgetary control (production budget, cash budgets, rolling budgets, top-down/bottom-up).
In order to pass this paper, candidates should:
* Have a clear understanding of the objectives of the exam as explained in the syllabus and study guide.
* Practice examination style questions on a regular basis. Thorough preparation is essential and the importance of regular practice cannot be over-emphasised. Do not procrastinate: start right away.
* Be able to communicate their understanding clearly in an examination context. Students generally concentrate on the numbers and ignore the theories, hoping that they will take care of themselves. However, experience has shown that candidates need as much practice on discursive type of questions as computational type of questions. The examiner, remember, is not only looking at your ability to calculate the figures but also your understanding of those figures.
* Present legible scripts and avoid poor presentation or poor handwriting. Good presentation and good handwriting make it easier for you to be given appropriate credit for your answer. Write in black or blue ink and avoid using other colours such as green or red. Do not use pencil. Start each question on a fresh page, and leave a page or two between answers.
* Be able to identify the appropriate tools, methods or techniques to apply to financial management and management accounting problems , don't expect these to be given by the examiner. Candidates must be able to critically assess the tools and techniques of financial management and control.
* Make an assumption whenever the question is not clear. However, where a question is clear, there is no room for assumption, otherwise this amounts to you answering a question you would have liked to be asked rather than the question actually asked. Remember to state your assumptions on the face of your script when made.
* Isaac Osei-Kwame is head of the ACCA College at LVMT Business School
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