PAPER 1.1 Preparing Financial Statements
FTC
SECTION A (50 %) 25 Multiple choice questions Will cover all areas of the syllabus SECTION B (50%) Longer questions – will include theory and computational questions, each question worth between 8 to 12 marks.
Preparation of financial statements for a sole trader, company or group
Fixed assets ledger accounting
Incomplete records
Accounting standards/ concepts/theory
Ratios and interpretation
Partnership accounts
BPP
• Partnerships
• Fixed Assets/NCA
• Cash Flow Statements
• Interpretation of F/S
* Preparation of a balance sheet or P&L account for a sole trader.
* Consolidated balance sheet for a company.
* Calculation of various ratios with a discussion of the pros and cons of ratio anlaysis.
* Incomplete records for a sole trader.
* Discussion of accounting concepts and possibly problems with historic cost accounting.
* Accounting for non current assets.
PAPER 1.2 Financial Information for Management
FTC
The paper will consist of 25 MCQs of 2 marks each and 5 long questions of 8-12 marks each. The MCQs will vary in difficulty, but the variety will ensure that the paper reflects the syllabus. The five long questions will be a mix of (mostly) calculations and (a few) written marks. The vast majority of the marks in this paper will be for calculations. The nine key areas of the syllabus will make up the bulk of the exam paper:
Cost classification and behaviour.
Material, Labour and Overhead costs.
Absorption and Marginal Costing.
Process Costing.
Standard Costing (includes variances).
CVP analysis (includes break-even).
Pricing Methods.
Relevant Costing
Limiting Factors and Linear Programming
BPP
• Absorption costing process (allocation/apportionment, etc)
• Construction of a P&L under either AC or MC (or both)
• Reconciliation
• Break-even calculations or sketching break-even charts
• Construction of an operating statement to reconcile budget profit to actual profit having calculated sales and cost variances, possibly with a slant towards overhead variances
• Discuss pricing policy including some calculations
* Cost classification and behaviour.
* Material, labour, and overhead costs.
* Absorption and marginal costing.
* Process costing.
* Standard costing (includes variances).
* CVP analysis (includes break-even).
* Pricing methods.
* Relevant costing.
* Limiting factors and linear programming.
PQ tip: The vast majority of the marks in this paper will be for calculations.
1.3
FTC
Primary Tips:
Theories of leadership style
Individual, Groups and Team behaviour
Classical and modern theories of management and structure
Objective setting; performance indicators
Authority, responsibility and delegation
Motivational Theories
Secondary Tips:
Culture, change and the effect on existing structures
Management of Diversity/Equal Opportunities
Effective Communication Practices
The Learning Process – Mumford and Kolb
* Leadership & motivation.
* Organisational culture.
* Health & safety.
* Delegation.
* Organisational structures.
2.1
FTC
Managing Information Systems
Business strategy and IS/IT strategy
Trends in IT
Outsourcing
Recharging IS/IT costs
Legacy systems
Projects: quality plans; slippage
Designing Information Systems
Systems development methodologies (Student Accountant article August 2005)
Data flow diagram; business event model
External design: data input
Software: packages v bespoke
Prototyping, CASE and 4GL
Evaluating Information Systems
Security: physical security; passwords; validation; encryption
Quality management, quality assurance, quality control; V-model
Changeover methods
Metrics (Student Accountant article February 2005)
Maintenance
LVMT
• Cases are meant to test the candidate's ability to handle more pragmatic issues applying his/her theoretical ideas acquired in the classroom
• Cases would always require the candidate to assume himself in the case to be able to answer the question as required by the examiner
• Most case questions have at least some amount of clues embedded in them and that calls for careful reading to know the mind of the examiner
• Each paragraph in most cases are very vital since they carry different set of information
• Some of the answers the examiner requires from the candidate would be such that he/she would have to think outside the case.
* Business strategy and IS/IT strategy.
* Trends in IT.
* Outsourcing.
* Recharging IS/IT costs.
* Legacy systems.
* Projects: quality plans, slippage.
* Systems development methodologies (see Student Accountant article, August 2005).
* Data flow diagram, business event model.
* External design, data input.
* Software packages v bespoke.
* Security, physical, passwords, validation and encryption.
* Prototyping CASE and 4GL.
* Quality management, quality assurance, quality control, V-model.
* Changeover methods.
* Metrics (Student Accountant article February 2005).
* Maintenance.
2.2(UK)
English Legal System
Methods of resolving civil disputes
Contract
Offer and acceptance
Consideration (including Pinnel's case)
Discharge by performance
Damages
Agency
Authority
Partnership
Fiduciary duties of partners
Company law
Veil of incorporation
Types of company
Registration
Articles of Association
Discounts & premiums
Financial assistance
Reductions of capital
Appointment & removal of directors
Directors’ duties (including wrongful trading)
Meetings & resolutions
Minority protection
2.3(UK)
Section A Corporation Tax
Q1 Trading Loss relief with capital allowances & industrial buildings allowance and some calculation of chargeable gain Income Tax
Q2 Income tax computation with Benefits as well as Schedule D Case I/II implications leading to income tax and possible gains tax payable. Section B VAT
Q3 Computational and discursive question dealing with Registration /Return Misdeclaration penalty CGT
Q4 Capital Gains Tax Shares - bonus/rights/ takeover Rollover and Gift Relief As from June 2005 exam, the format of the exam has changed and questions 5 to 7 can now be set on any topic Group losses with gains group implications Partnership with losses Employment Verses Self Employment with income tax and NIC calculations Corporation tax loss relief [terminal loss relief for both Sole Traders and Limited companies has not been examined]
PAPER 2.3Business Taxation
LVMT
• Corporation tax for individual companies (not groups)
• The taxation of an unincorporated business and/or employees (employment benefits and pensions)
• VAT registration and deregistration
• Annual VAT
• Flat rate
• Cash schemes
• Capital gains - incorporated business/an unincorporated business on areas like holdover, rollover and gift relief
• Branch vs. subsidiaries
• Employed vs. self-employed
• Basis of assessment
2.4
Budgeting (to include cash budgets, maybe forecasting)
Costing systems (Absorption, ABC, Marginal, throughput)
Working Capital Management (possibly Debtors and/or overtrading)
Investment Appraisal; NPV to include tax and inflation, other methods of appraisal and possibly capital rationing
Gearing, ratios (ROCE, ROE) and multiple objectives
* Investment appraisal.
* Working capital management – trade credit and cash.
* Performance evaluation.
* Throughput accounting and theory of constraints.
* Budget preparation plus written part on budgeting.
2.5
CBS and CIS
Published accounts,EPS ?(maybe normal IS and BS)
Interps (but don’t neglect cashflow)
IAS 12
IAS 17
IAS 36
IAS 18
PAPER 2.5 Financial Reporting
LVMT
• Consolidated financial statements
• Preparing the consolidated profit and loss account/income statement and the consolidated balance sheet
• Published financial statements of a limited company - presentation in accordance with accounting standards and statutory formats with adjustments involving the application of various accounting / financial reporting standards
• Cash flow statement: Presentation in accordance with FRS 1/IAS7
• Interpretation of financial statements ratio analysis and assessing financial performance
• Tangible and intangible non-current assets, goodwill and impairment of assets provisions
• Revenue recognition; recognition of the substance of a transaction: application of the ASB’s Statement of Principles/IASB’s Framework and other relevant accounting standards and concepts.
* Consolidated financial statements is a regular in the compulsory section.
* Published financial statements of a limited company.
* Cash flow statements, in accordance with FRS1/IAS7.
* Interpretation of financial statements ratio analysis and assessing financial performance.
* Tangible and intangible non-current assets.
* Revenue recognition and FRS18.
PQ tip: Watch out for FRS11 & 19 and SSAP21.
2.6
Ethics / New audit appointment
Internal Control Objectives / Procedures for a given company
Substantive Testing of Inventory (Stock) or Receivables (Debtors)
Internal Audit outsourcing
Audit Report scenarios
Practical Audit Planning
Computer Assisted Audit Techniques
PAPER 2.6Audit and Internal Review
LVMT
• Corporate governance (provisions of the Combined Code and the rational for there being provisions of corporate governance)
• Audit committee (what functions an audit committee should have and what advantages a company would have as a result of the establishment of such a committee)
• Internal controls
• Internal audit
• Risk (identify the elements of risk present when an audit is taking place)
* Corporate governance (this has been moved from paper 3.1.).
* Combined code provisions and the rational behind it.
* Functions of an audit committee.
* Internal controls and internal audit.
* Audit procedures, such as planning and testing.
PAPER 3.1 Audit and Assurance Services
FTC
Q1. Case Study - Advanced Auditing - Risk Assessment and Audit Strategy.
Q2. Case Study - Assurance Services - Corporate Social Responsibility Reporting.
Q3. Scenario Question - Accounting Treatments and Audit Evidence - 3 scenarios.
Q4. Audit Reporting - Emphasis of Matters treatments.
Q5. Professional and Ethical matters. Q6. Current Issues - Implications of IFRSs or Auditors' liability
BPP
• Control suggestion and/or evaluation
• Audit evidence on Paper 2.5 accounting areas
• Group audit issues (including audit work on fair values)
• Planning/practice management/quality control issues
• Assurance services
• Reporting
• Ethics, professional and quality control issues
* Identify business risk, suggesting controls to mitigate the risks.
* Planning, risk assessment, long-term contracts.
* Audit evidence on tangible fixed assets (FRS15), provisions (FRS12) and long-term loans.
* Ethical issues – the fundamental principles of integrity and objectivity.
* Corporate social responsibility reporting.
* Audit reports involving significant uncertainty relating to going concern.
* Emphasis of matters treatments.
* Auditors liability or implications of IFRSs.
3.2(UK)
IHT including lifetime and death gifts and the definition of domicile
Trusts – Uses of different types of trust and the tax implications of trustees disposing of chargeable assets held in the trust.
CGT –Assignment of a short lease, gift relief, PPR exemption and Letting exemption, EIS reinvestment relief, overseas aspects.
Income tax computation including Schedule A, employment income (particularly share and share option incentive schemes) overseas aspects (including overseas aspects definition of residency and rules for travelling expenses for employees and their families), donations to charity under gift aid.
National Insurance
Income tax – trading losses for a partnership on commencement/cessation of a business.
Financial planning – sources of finance, lease versus buy, investments including ISAs and pensions (SSAS/ EPP, SIPP) the Financial Services and Markets Act 2000.
Protection products such as life assurance, critical illness insurance, heath insurance, keyperson insurance, intervivos insurance
Corporation tax including IBA, loss relief and group and consortium relief.
Overseas aspects of corporation tax including controlled foreign companies and transfer pricing.
Stamp duty land tax
3.3
Contribution based decision-making
Practical aspects of pricing policy
Performance evaluation – a question based around the examiner’s article dated 5 Sept 2005 – Pyramids and Pitfalls of Performance Measurement
The strategic framework
The learning effect
PAPER 3.3Performance Management
BPP
• Budgeting (short term planning)
• Performance measurement (numerical analysis)
• Performance measurement
• Transfer pricing (which can also include qualitative issues)
• Uncertainty in decision-making.
* Contribution based decision-making.
* Practical aspects of pricing policy.
* Performance evaluation.
* The strategic framework.
* The learning effect.
3.4
Soft systems methodologies – this topic has been examined on a number of occasions and the theory as well as the development of practical questions are required
MacFarlan’s Applications Portfolio – an important management model, an understanding of its application to scenario is a possibility for this sitting
Strategy –application of an IS/IT/IM strategy in the context of a scenario
Porters 3 generic strategies in relation to the development of e-commerce systems or the Internet
Knowledge management – problems of knowledge sharing and solutions within a business context – perhaps relating to knowledge and data workers
Lewins model and managing change – the application of the model and how problems can be reduced in relation to policies which address behaviour.
Reasons for the development of strategy and alignment issues – core topic area – yet to examine the reasons for the development of an IS strategy – alignment issues could be linked to one of the above models g value chain
Globalisation – issues in relation to the setting up of a global organisation with the application of e-commerce
* Strategy models (SWOT, PEST, Porter).
* Nolan's 'Stage Hypothesis'.
* Checkland's 'Soft Systems Methodology'.
* Earl's 'System's Audit Grid' and 'Three Leg' analysis.
* McFarlan's 'Applications Portfolio' and Peppard's adaptation.
* Parson's '6 IS Strategies'.
* Zuboff's 'Automate, Informate, Transformate'.
* The 'Three Stage' change process and 'Unfreeze, Change, Re-freeze'.
* BPR and CSFs.
* Soft and hard approaches.
* Managing change.
3.5
Current position analysis
Ethics
Marketing
Strategic Options
Balanced Scorecard and multidimensional performance measures The role of the accountant in strategic decision making (see the examiner's article in the September addition of student accountant)
PAPER 3.5Strategic Business Planning and Development
BPP
• 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
• Marketing, including new product development
• Change management
• Globalisation strategy
• Ethics and corporate social responsibility
3.6
Preparation of a group income statement with either disposal or foreign subsidiary or both! - (though it could be a balance sheet (again) or a cash flow
EPS
Financial instruments
International issues
Reporting of non financial performance e.g. Corporate Social Responsibility, sustainability reporting
PAPER 3.6 Advanced Stage Corporate Reporting
LVMT
• Consolidated profit and loss account including adjustments for disposals and deemed disposals; also goodwill impairment calculation
• Foreign group implementing FRS 23/IAS 21
• Financial reporting in hyper-inflationary economy (FRS 24/IAS 29) and events after the balance sheet date (FRS 21/IAS10)
• Earnings per share (FRS 22)
• Joint ventures and associates (FRS 9/IAS28 & IAS31)
• A combination of different standards in one question possibly involving FRS 21 (IAS 10) OFR, corporate governance and environmental reporting
3.7
Section A:
Risk management: Currency Risk / Interest rate risk
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.
Company Valuation: 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.
WACC or Risk adjusted WACC calculation within the context of a standard investment appraisal question. However risk adjusted WACC could also be examined within the context of traditional gearing.
Management Buy Outs: Including the review of an existing finance package. Together with a discussion of the advantages and disadvantages of the package.
Section B:
Dividend Policy
Term Structure of Interest rate: possible linked to the calculation of the market value of debt.
International economics – I.M.F., Treasury Management. Balance of payments deficits.
Control of foreign subsidiaries,
Economic Value Added – EVA
Management by Objectives
PAPER 3.7 Strategic Financial Management
BPP
• Overseas investment appraisal
• Free cash flow
• Corporate governance
• CAPM and portfolio theory
• You may have to calculate a Beta Factor from a formula. The formula is not given so it needs to be learnt
• Currency or interest rate risk management
• Mergers and acquisitions
• Corporate restructuring
• Capital structure
• Adjusted Present Value
Thursday, November 10, 2005
Wednesday, November 09, 2005
How to Pass Paper 3.7
08/11/2005
LCA’s Steve Lumby helps you get through what is always the biggest hurdle to becoming ACCA qualified
First the bad news. The pass rate on 3.7 has consistently been around 10% below the pass rate on the other two Final Level core papers. Furthermore, the pass rate for 3.7 never even achieves 50%. This means that the average candidate fails the paper.
Given this information, I cannot help but make the following observation. There is something wrong here.
Either the problem lies with the nature of the 3.7 syllabus and/or how it is being examined or the problem is with the ACCA exam structure which is allowing too many candidates to reach Level 3, who do not have the ability to pass Level 3. At the final stage of professional exams, the normal expectation would be that around two-thirds of candidates should pass. The fact that well under half pass 3.7 does not look good for the ACCA.
Despite the foregoing comments, the good news is that you do not have to know very much in order to pass 3.7… but you do have to know something!
There was a comment made to the Pass Talkback Line - published in the 08.2005 edition - that almost encapsulates the problem of lack of basic knowledge. The candidate complained that Question 1 in the 3.7 exam for June 2005 required an analysis of ‘Free Cash Flows’ and they didn’t know what was meant by that term.
This level of ignorance, (from what is presumably a serious final level candidate), beggars belief given that virtually every 3.7 exam over the last several sittings have contained questions involving free cash flow - including a question in June 2000 which simply said: ‘What is Free Cash Flow?’. (Given that this particular candidate then when on to say that ‘I have since found out that free cash flow is a new name for NPV…..’ this does not auger too well for their next re-sit attempt either!).
So, what do you need to do to pass Paper 3.7? Here are some tips:
o Look intelligently at past examination questions - not the answers - over, say, the last 5 or 6 sittings to see what areas of the syllabus the examiner appears interested in examining. This comment particularly applies to the Section A questions. Don’t let your tutor do this for you - do it yourself and really get to know the exam.
o Once you have identified the ‘core’ areas of the syllabus, start to get to know the basic bits of these areas. Let me give one example by way of illustration. Suppose that you identify that ‘project appraisal’ is frequently examined - either of a domestic project or an overseas project, and either using NPV or APV.
Therefore set about knowing how to:
Sort out relevant from irrelevant project cash flows
Calculate after tax cash flows, including the question of how many capital allowances to calculate and whether or not a balancing charge or allowance should be included
How to handle inflation, including do I use a real cash flow and real discount rate approach or money cash flow and money discount rate approach, how to identify/calculate real and money cash flows and real and money discount rates.
How to handle working capital
How to forecast future exchange rates, (for and FDI), using PPPT
Know when you should use the WACC and when you should use a risk-adjusted WACC as the NPV discount rate
Know how to calculate a ‘base-case discount rate’ for an APV analysis.
Know how to calculate the PV of the 'standard' APV financing side-effects: finance issue costs, tax-relief on interest and the benefits of a cheap loan.
o Get to grips with the management of your time in the exam. The first thing here is to recognise the fundamental difference between Section A questions and Section B questions. With each Section B question that you answer, you have 25 minutes to say and do what you can and so answer the question.
However, with Section A questions your task is not to answer the 40 mark question in the 65 minutes available. Instead, your task is to do enough in 65 minutes to pick up 20+ marks, (a passing percentage). Similarly with the 30 mark question, you have 55 minutes to do enough to pick up 15+ marks. Candidates continually complain that the Section A questions cannot be completed in the time available. However this complaint misses the key point: the Section A questions are not designed to be completed in the time available - they are designed so that a reasonably able candidate can pick up a passing percentage of the marks in the time available.
• The other important point concerning time management is the management of your time within the 55 and 65 minute framework of the Section A questions. In this respect discursive questions should be allocated 1 minute for each mark they are assigned and the balance of the available time should then be devoted to getting as far as you can with the numerical parts of the question.
If Question 1 from December 2004 is used to illustrate this point, (look it up for yourself), then of the 65 minutes available, eight minutes should have been allocated to answering part (a) – a discussion question - and nine minutes allocated to writing the ‘report’ in part (b) in which you are asked to discuss ‘other financial and non-financial factors, including real options’. That then leaves you [65 – 17 =] 48 minutes to get as far as you can with the APV analysis.
• Perhaps there is one final piece of advice worth giving. I believe that candidates spend far too much time looking at the answers to questions, and far too little time looking at the questions themselves. Thus they become expert in auditing answers - and so forget the fact that in the exam, you don’t get the answers to audit - you get the questions to answer. The message here is simple. When looking at the examiner’s answers, it is not important to understand every little bit of the answer, so don’t go through the answers word by word, line by line, as some students do - just make sure that you understand the 3 or 4 main points made in answer to a discursive question and you understand the general approach used to putting together the numerical analysis.
Relax - remember you don’t have to get 100% of the marks to pass the paper!
Steve Lumby is a lecturer at London College of Accountancy
Story posted by Alex Miller
LCA’s Steve Lumby helps you get through what is always the biggest hurdle to becoming ACCA qualified
First the bad news. The pass rate on 3.7 has consistently been around 10% below the pass rate on the other two Final Level core papers. Furthermore, the pass rate for 3.7 never even achieves 50%. This means that the average candidate fails the paper.
Given this information, I cannot help but make the following observation. There is something wrong here.
Either the problem lies with the nature of the 3.7 syllabus and/or how it is being examined or the problem is with the ACCA exam structure which is allowing too many candidates to reach Level 3, who do not have the ability to pass Level 3. At the final stage of professional exams, the normal expectation would be that around two-thirds of candidates should pass. The fact that well under half pass 3.7 does not look good for the ACCA.
Despite the foregoing comments, the good news is that you do not have to know very much in order to pass 3.7… but you do have to know something!
There was a comment made to the Pass Talkback Line - published in the 08.2005 edition - that almost encapsulates the problem of lack of basic knowledge. The candidate complained that Question 1 in the 3.7 exam for June 2005 required an analysis of ‘Free Cash Flows’ and they didn’t know what was meant by that term.
This level of ignorance, (from what is presumably a serious final level candidate), beggars belief given that virtually every 3.7 exam over the last several sittings have contained questions involving free cash flow - including a question in June 2000 which simply said: ‘What is Free Cash Flow?’. (Given that this particular candidate then when on to say that ‘I have since found out that free cash flow is a new name for NPV…..’ this does not auger too well for their next re-sit attempt either!).
So, what do you need to do to pass Paper 3.7? Here are some tips:
o Look intelligently at past examination questions - not the answers - over, say, the last 5 or 6 sittings to see what areas of the syllabus the examiner appears interested in examining. This comment particularly applies to the Section A questions. Don’t let your tutor do this for you - do it yourself and really get to know the exam.
o Once you have identified the ‘core’ areas of the syllabus, start to get to know the basic bits of these areas. Let me give one example by way of illustration. Suppose that you identify that ‘project appraisal’ is frequently examined - either of a domestic project or an overseas project, and either using NPV or APV.
Therefore set about knowing how to:
Sort out relevant from irrelevant project cash flows
Calculate after tax cash flows, including the question of how many capital allowances to calculate and whether or not a balancing charge or allowance should be included
How to handle inflation, including do I use a real cash flow and real discount rate approach or money cash flow and money discount rate approach, how to identify/calculate real and money cash flows and real and money discount rates.
How to handle working capital
How to forecast future exchange rates, (for and FDI), using PPPT
Know when you should use the WACC and when you should use a risk-adjusted WACC as the NPV discount rate
Know how to calculate a ‘base-case discount rate’ for an APV analysis.
Know how to calculate the PV of the 'standard' APV financing side-effects: finance issue costs, tax-relief on interest and the benefits of a cheap loan.
o Get to grips with the management of your time in the exam. The first thing here is to recognise the fundamental difference between Section A questions and Section B questions. With each Section B question that you answer, you have 25 minutes to say and do what you can and so answer the question.
However, with Section A questions your task is not to answer the 40 mark question in the 65 minutes available. Instead, your task is to do enough in 65 minutes to pick up 20+ marks, (a passing percentage). Similarly with the 30 mark question, you have 55 minutes to do enough to pick up 15+ marks. Candidates continually complain that the Section A questions cannot be completed in the time available. However this complaint misses the key point: the Section A questions are not designed to be completed in the time available - they are designed so that a reasonably able candidate can pick up a passing percentage of the marks in the time available.
• The other important point concerning time management is the management of your time within the 55 and 65 minute framework of the Section A questions. In this respect discursive questions should be allocated 1 minute for each mark they are assigned and the balance of the available time should then be devoted to getting as far as you can with the numerical parts of the question.
If Question 1 from December 2004 is used to illustrate this point, (look it up for yourself), then of the 65 minutes available, eight minutes should have been allocated to answering part (a) – a discussion question - and nine minutes allocated to writing the ‘report’ in part (b) in which you are asked to discuss ‘other financial and non-financial factors, including real options’. That then leaves you [65 – 17 =] 48 minutes to get as far as you can with the APV analysis.
• Perhaps there is one final piece of advice worth giving. I believe that candidates spend far too much time looking at the answers to questions, and far too little time looking at the questions themselves. Thus they become expert in auditing answers - and so forget the fact that in the exam, you don’t get the answers to audit - you get the questions to answer. The message here is simple. When looking at the examiner’s answers, it is not important to understand every little bit of the answer, so don’t go through the answers word by word, line by line, as some students do - just make sure that you understand the 3 or 4 main points made in answer to a discursive question and you understand the general approach used to putting together the numerical analysis.
Relax - remember you don’t have to get 100% of the marks to pass the paper!
Steve Lumby is a lecturer at London College of Accountancy
Story posted by Alex Miller
Ten steps to passing ACCA 3.6
08/11/2005
BPP Liverpool tutor Paul Bennett maximises your chances of passing paper 3.6 by bringing you ten top tips to follow. With the June pass rate down six percent on the previous sitting, this is just the job
1 - Find a good tuition provider with up-to-date materials. This is particularly important for paper 3.6 as the syllabus is always changing and the examiner, Graham Holt, sets exams which test your knowledge of recent accounting standards and current developments.
Look for a tuition provider with ACCA Premier or (even better) Premier Plus status (you can view lists of these on ACCA’s website) and ask qualified friends and colleagues for their recommendations. Go to open days to check out tutors, study materials and premises. Look for an approachable tutor – you might not be the class Hermione Granger but you’ll probably have more questions to ask than you did for lower level papers.
2 - Review the examinable legislation and documents for your sitting of the 3.6 exam which can be found in ACCA’s Student Accountant magazine in February and September each year (or on the ACCA website). Although a good, broad knowledge of the whole syllabus is required to pass the exam, make time to focus on the newest standards and exposure drafts. These are the ones most likely to be tested in detail in the exam.
3 - Whether you are attending a taught course or following a home study system, start studying seriously from day one. The syllabus is huge but reassuringly it builds on your paper 2.5 knowledge. However, there is a lot to learn and re-learn so the sooner you start building up your knowledge the better.
For each accounting standard/exposure draft you study complete a small index card, with the name and number of the standard on one side and some key points on the other. Then carry these round with you and test yourself when you have a spare minute. Looking at the name/number side, can you remember the key points? Scanning the other side, can you recall the name and number correctly?
4 - Try to read round the subject, not focusing solely on your study materials. Articles in Student Accountant magazine marked as relevant to paper 3.6 (which can be downloaded from the ACCA website) are essential reading, especially any written by Graham Holt, as they are often tested in subsequent exams. The accounting standards setters have websites giving details of projects they are working on and current developments (see for example www.iasb.org.uk or www.asb.org.uk). Newspaper articles in the business pages can give useful illustrations for an exam answer (e.g. explaining why a company’s results have changed as they switch from local GAAP to international standards).
5 - Group accounting techniques are a core area of the syllabus – you must practise consolidations. We know question one of the exam is always on group accounts, and the topic also often appears in one or more of the optional questions. Make sure you have a good grasp of the basic techniques, as these can give you the easier marks in the exam. Review your paper 2.5 notes if necessary - assuming you did not burn them to celebrate passing that exam! Then build up knowledge of more advanced areas like consolidating foreign subsidiaries.
6 - Review some real sets of accounts to see how companies apply the standards you are studying in real life situations. Look at your own organisation’s accounts, maybe those of the shop where you buy clothes, the football club you support or the pub chain where you have a drink. For larger companies you’ll usually find the latest Annual Report on their website.
7 - Don’t get bogged down in the details of any one area you are studying. Accounting standards have lots of detailed rules, but concentrate on the main issues first - why a standard was released, the main objectives and how these are achieved. You will gradually build up more detailed knowledge by attempting questions and re-reading your notes. Be patient too. Maybe at paper 2.5 everything made sense first time round. At Part 3, however, the topics and issues are harder so give them time to sink in. Knowledge you are gaining from other Part 3 core papers will sometimes shed light on a 3.6 topic. For example, hedge accounting will make more sense when you have studied hedging techniques in paper 3.7.
8 - The Framework for the Preparation and Presentation of Financial Statements (or for UK stream students the Statement of Principles) is particularly important at paper 3.6 as the conceptual framework on which standards are based. Spend some time becoming familiar with the key principles, then see how they are applied to each standard you study.
9 - Make good use of all the study resources at your disposal. If you have a friend studying paper 3.6 at the same time as you, meet up occasionally to discuss a selected topic. If not, ask a recently qualified work colleague if you can do this (maybe over a lunchtime sandwich). When you come across something you can’t understand, don’t spend long puzzling over it - ask your tutor. In a rapidly changing subject such as paper 3.6, it could just be a misprint in your study material which a tutor would quickly spot.
10 - Accept that it’s a tough paper and studying for it will involve some hard work. BUT it’s not impossible. The examiner is known for setting tough papers but marking them leniently. Think of the qualified accountants you know. They’ll be good accountants, but not superhuman. Reasonable (not perfect) knowledge coupled with question practice and good exam technique will get you through. Good luck with your studies, keep going - and roll on those study-free evenings and weekends when you’ve passed!
Story posted by Alex Miller
BPP Liverpool tutor Paul Bennett maximises your chances of passing paper 3.6 by bringing you ten top tips to follow. With the June pass rate down six percent on the previous sitting, this is just the job
1 - Find a good tuition provider with up-to-date materials. This is particularly important for paper 3.6 as the syllabus is always changing and the examiner, Graham Holt, sets exams which test your knowledge of recent accounting standards and current developments.
Look for a tuition provider with ACCA Premier or (even better) Premier Plus status (you can view lists of these on ACCA’s website) and ask qualified friends and colleagues for their recommendations. Go to open days to check out tutors, study materials and premises. Look for an approachable tutor – you might not be the class Hermione Granger but you’ll probably have more questions to ask than you did for lower level papers.
2 - Review the examinable legislation and documents for your sitting of the 3.6 exam which can be found in ACCA’s Student Accountant magazine in February and September each year (or on the ACCA website). Although a good, broad knowledge of the whole syllabus is required to pass the exam, make time to focus on the newest standards and exposure drafts. These are the ones most likely to be tested in detail in the exam.
3 - Whether you are attending a taught course or following a home study system, start studying seriously from day one. The syllabus is huge but reassuringly it builds on your paper 2.5 knowledge. However, there is a lot to learn and re-learn so the sooner you start building up your knowledge the better.
For each accounting standard/exposure draft you study complete a small index card, with the name and number of the standard on one side and some key points on the other. Then carry these round with you and test yourself when you have a spare minute. Looking at the name/number side, can you remember the key points? Scanning the other side, can you recall the name and number correctly?
4 - Try to read round the subject, not focusing solely on your study materials. Articles in Student Accountant magazine marked as relevant to paper 3.6 (which can be downloaded from the ACCA website) are essential reading, especially any written by Graham Holt, as they are often tested in subsequent exams. The accounting standards setters have websites giving details of projects they are working on and current developments (see for example www.iasb.org.uk or www.asb.org.uk). Newspaper articles in the business pages can give useful illustrations for an exam answer (e.g. explaining why a company’s results have changed as they switch from local GAAP to international standards).
5 - Group accounting techniques are a core area of the syllabus – you must practise consolidations. We know question one of the exam is always on group accounts, and the topic also often appears in one or more of the optional questions. Make sure you have a good grasp of the basic techniques, as these can give you the easier marks in the exam. Review your paper 2.5 notes if necessary - assuming you did not burn them to celebrate passing that exam! Then build up knowledge of more advanced areas like consolidating foreign subsidiaries.
6 - Review some real sets of accounts to see how companies apply the standards you are studying in real life situations. Look at your own organisation’s accounts, maybe those of the shop where you buy clothes, the football club you support or the pub chain where you have a drink. For larger companies you’ll usually find the latest Annual Report on their website.
7 - Don’t get bogged down in the details of any one area you are studying. Accounting standards have lots of detailed rules, but concentrate on the main issues first - why a standard was released, the main objectives and how these are achieved. You will gradually build up more detailed knowledge by attempting questions and re-reading your notes. Be patient too. Maybe at paper 2.5 everything made sense first time round. At Part 3, however, the topics and issues are harder so give them time to sink in. Knowledge you are gaining from other Part 3 core papers will sometimes shed light on a 3.6 topic. For example, hedge accounting will make more sense when you have studied hedging techniques in paper 3.7.
8 - The Framework for the Preparation and Presentation of Financial Statements (or for UK stream students the Statement of Principles) is particularly important at paper 3.6 as the conceptual framework on which standards are based. Spend some time becoming familiar with the key principles, then see how they are applied to each standard you study.
9 - Make good use of all the study resources at your disposal. If you have a friend studying paper 3.6 at the same time as you, meet up occasionally to discuss a selected topic. If not, ask a recently qualified work colleague if you can do this (maybe over a lunchtime sandwich). When you come across something you can’t understand, don’t spend long puzzling over it - ask your tutor. In a rapidly changing subject such as paper 3.6, it could just be a misprint in your study material which a tutor would quickly spot.
10 - Accept that it’s a tough paper and studying for it will involve some hard work. BUT it’s not impossible. The examiner is known for setting tough papers but marking them leniently. Think of the qualified accountants you know. They’ll be good accountants, but not superhuman. Reasonable (not perfect) knowledge coupled with question practice and good exam technique will get you through. Good luck with your studies, keep going - and roll on those study-free evenings and weekends when you’ve passed!
Story posted by Alex Miller
Subscribe to:
Posts (Atom)