With the help of BPP, here are some vital last-minute guidance for the December ACCA exams. Don’t forget there are also lots of great features and resources on the Study Zone too…
As any syllabus area could be tested in sections A&B the best advice is to study all areas of the syllabus! Sorry, but you knew that.
Areas expected to be tested in Section C include (but are not limited to): budgetary systems, planning and operational variances, mix and yield variances and evaluation of the company performance (either as a whole, or on a divisional basis).
Given the fact that this is a performance management paper you would be advised to be prepared to evaluate some performance.
PM has the following syllabus areas:
A. Information, technology and systems for organisational performance.
B. Specialist cost and management accounting techniques.
C. Decision making techniques.
D. Budgeting and control.
E. Performance measurement and control.
General advice: There is no longer any formal reading and planning time at the start of the exam. However, you are strongly advised to plan answers to section C questions before starting to type. Ensure that you make reference to the scenario in your answer.
Finally, the examining team have repeatedly stated that they expect students to study broadly for all of the syllabus areas meaning that question spotting is not a good idea, instead students should expect the unexpected. Since the introduction of MCQs this advice is even more critical because more topics can be tested. The exam will be approximately 40% calculation and 60% discussion, meaning that it is not sufficient to be able to perform all of the calculations. Interpretation and application are crucial, especially in section C.
There will be a wide range of topics tested in section A as there are 15 OTQs. We would expect at least a couple of these OTQs to be devoted to the administration of income tax and corporation tax. So, candidates should ensure they are comfortable with the following:
• Due dates for the payment of income tax (including payments on account).
• Due dates for the payment of corporation tax (including instalments for large companies).
• Filing dates for the income tax and corporation tax returns.
• Penalties and interest for late payments and returns.
Also likely to be tested in section A of the exam are the following topics:
• VAT rules on registration, impairment loss (bad debt) relief, and the SME schemes relating to cash accounting, annual accounting and flat‐rate schemes. • Inheritance tax due on lifetime transfers both in the donor’s life and on death.
• Statutory residence tests for individuals.
• Identification of groups of companies for corporation tax loss reliefs and gains.
• Trading loss reliefs for both companies and sole traders.
It is important to remember that section A offers the exam team an opportunity to test the whole syllabus, so practising all kinds of TX questions from the practice and revision kit will help build on and complement your existing knowledge.
In section B of the exam the questions will be similar to those of section A, but there will be a longer scenario to deal with. This means a slightly different exam skill is necessary as you have more information to work through and each OTQ will require you to find the relevant information or data in that scenario. It is not a difficult skill, but we would hope you have had time to practise an extensive range of section B questions from the practice and revision kit before attempting the real exam.
In section C you will face the longer, constructive response questions with scenarios and much more open requirements. Your answers will need not just sound technical knowledge, but also the application of that knowledge to the question you have been asked.
Furthermore, your answer will have to be presented logically so the marker can follow your thought processes. At least 50% of your revision time should be spent answering the section C questions in the practice and revision kit to build up confidence and speed in a way that will also maximise marks.
1. Remember to learn your income tax and corporation tax pro formas.
2. Calculations which require no more than two or three entries into your calculator can be included on the face of your pro formas (e.g. time apportioning a salary). Calculations which are more complex (e.g. company car benefits) need separate workings which are properly referenced (W1, W2 etc) and have a heading.
3. Actually attempt the narrative parts of the requirement – aim for as many sentences as there are marks with each sentence containing something technical. Keep your paragraphs to no more than 3 sentences long.
4. In both numerical and narrative answers leave plenty of space on the page. So, in pro formas – leave a gap between each line (you may need to add something in). Show workings down the page, rather than across the page as it makes them easier to mark. In narrative answers leave a line or two between each paragraph just in case you remember something later. Well‐spaced answers are also easier to mark – and you always want to keep the marker happy.
We know that the two longest questions will focus on income tax and corporation tax. These are likely to include the following:
• Employment benefits.
• Property income.
• Relief for pension contributions.
• Adjustments to profit to arrive at trading income for both companies and sole traders – in past sittings we have seen a number of questions whereby you have to correct errors in computations included in the scenario.
• Capital allowance computations So, remember to cover the whole syllabus when using the practice and revision kit.
Finally, remember the pass mark is 50% so you don’t need to be perfect. If you don’t know something have a guess and move on. Sometimes you have to do that in order to get follow through marks in section C questions. If you make a mistake, but then use that incorrect figure later in a subsequent calculation, then that’s fine ‐ you can only lose the mark once. In sections A and B never leave an OTQ unanswered − have a guess if you don’t know the answer. It might be right!
· Fifteen 2-mark objective test questions on a wide range of topics including several on consolidation and interpretation of financial statements.
· Expect a few questions on non-core areas (e.g. inflation, specialised entities).
Section B (Case questions):
· Three separate scenarios with five objective test questions on each scenario; each question is worth 2 marks.
- Each scenario could be a mix of topic areas or focused on one topic and will usually consist of two/three calculations and two/three narratives.
· Questions are not dependant on each other and can be answered in any order.
Section C (Constructed response questions):
· Two 20-mark questions, one covering interpretations and the other preparation of financial statements.
· One question is likely to be in the context of a single company and one in the context of a group, so you could have a single company interpretation and a groups preparation or vice versa.
· Accounts preparation questions may include extracts or standalone calculations or full statements of profit or loss and other comprehensive income and/or statement of financial position.
· Both questions will cover the accounting for items from other areas of the syllabus.
· May include a short separate part, e.g. with a statement of changes in equity, statement of cash flows extract, earnings per share calculation or linked written topic.
· A consolidation question would include one subsidiary and often an associate, with adjustments, e.g. fair values, deferred/contingent consideration, PUP on inventories/PPE, intragroup trading and balances, goods/cash in transit.
· A single entity question could be preparation from a trial balance or restatement of given financial statements with the usual adjustments for depreciation, revaluation and current/deferred tax (including deferred tax on revaluations) plus a mixture of adjustments on other syllabus areas, e.g. leases, substance over form issues, financial instruments (change in fair value or amortised cost), share issues, government grants, inventory valuation, revenue recognition or construction contracts.
All three questions in Section B will be broken down into sub requirements and be scenario based. The majority of marks in each question will test syllabus areas B, C and/ or D.
Areas expected to be tested in questions 16 to 18 include:
• Audit planning.
• Audit risk (identification and explanation of audit risks from a scenario and explanation of the auditor’s response to each risk).
• Internal audit.
• Internal controls (identification and explanation of deficiencies in internal control and the recommendation of suitable internal controls or description of tests of controls).
• Audit procedures (both substantive procedures and tests of controls).
AA has the following syllabus areas:
A. Audit framework and regulation.
B. Planning and risk assessment.
C. Internal control.
D. Audit evidence.
E. Review and reporting.
General advice: Where questions are based on a scenario it is essential that you use the information in the scenario to make your answers relevant. You should also think about how you will present your answer – try to use a tabular format in your solutions where relevant as the examining team have stated that candidates who do this score better. Pay attention to the verbs used in question requirements as these indicate the number of marks available. For example, the verb “explain” requires a sentence and will score one mark if properly explained whereas the verb “list” simply requires you to list out information with no further explanation and this will score 0.5 mark per point.
Finally, please read the Examining Team’s Comments relating to past exams which are on the ACCA website: http://www.accaglobal.com/uk/en/student/exam-supportresources/fundamentals-exams-study-resources/f8/examiners-reports.html.
Questions in section A will often be knowledge based (testing your knowledge of key technical terms) and will balance out the questions in Section B and C of the exam to make sure that all aspects of the syllabus are examined. It is therefore likely that a good number of these questions will test your understanding of financial management and objectives (ratio analysis, the concept of shareholder wealth) as well as the economic environment and financial institutions topics (financial intermediation, fiscal and monetary policies). The efficient market hypothesis is likely to be tested here too.
Each section B case-study will be broken down into five separate 2-mark multiple choice questions (so 15 questions in total). Areas expected to be commonly tested in this section are working capital management (e.g. the operating cycle, the impact of a change in credit period or accepting a factor’s offer), business or security valuations (e.g. methods of valuation), and financial risk management (most likely mainly in the form of currency risk but it is possible that at least an aspect of interest rate risk is examined here)
Section C’s two 20-mark questions will be broken down into sub requirements and be scenario based. These two questions will focus mainly on syllabus sections C, D and E. Section C is working capital management, section D is investment appraisal and is likely to feature NPV with inflation and tax. Section E is business finance; either an evaluation of financing options (interest coverage and gearing ratios are likely to be important here) or a cost of capital and analysis are most likely. Whichever of these three topics does not feature in section C is likely to appear in section B of the exam. Keep checking the ACCA website for articles in the lead up to the exam, any articles written by the examining team are often tested and are important to read.
It is important that you read the examiner’s approach article available on the ACCA website. ACCA has also published several exam technique and technical articles that you should read as part of your exam preparation.
Specifically for the December 2020 exam session and still valid for future exam sessions, ACCA has released two articles called ‘Revising for the September 2020 exam session’ (parts 1 and 2). These are available in the exam technique section of the SBR exam support resources section of the ACCA website www.accaglobal.com.
If you are sitting the CBE there are resources you should access here. The exam Section A will be 2 questions, worth 50 marks in total.
Question 1 – usually 30 marks:
· Q1 will be based on group accounting. Be aware that this question may test any aspect of group accounting, including consolidated statements of cash flows, overseas subsidiaries and associates and JVs.
· Make sure you attempt all parts of the requirement in Q1. The most recent examiner’s report stated that some candidates are not attempting the required calculations and therefore struggling to gain a pass mark on this question.
· To score well, you need to do the calculations and explain the principles underlying the calculations you have performed.
Question 2 – usually 20 marks, including 2 professional marks:
· Q2 will cover the reporting and ethical implications in a given scenario. Make sure you consider any threats to the fundamental principles of ACCA’s Code of Ethics and Conduct in your answer.
· Two professional marks are available in this question for application of relevant ethical principles to the scenario. In order to gain the marks, your answer must be realistic and sensible. Stating that all issues should immediately be reported to the legal authorities without further discussion is unlikely to be awarded the professional marks as this advice is not realistic.
· Make sure that you only spend the allocated amount of time on the second question (e.g. 20-mark question = 20 x 1.95 minutes per mark = 39 minutes maximum). The examiner has recently commented that students seem to be spending too long on this question and not leaving enough time for the rest of the exam.
Section B will be 2 questions, worth 25 marks each:
· Section B can deal with any area of the syllabus and may be based on a short scenario, a case study with several parts, or an essay.
· Section B will always include a question or part-question involving the analysis or appraisal of information from the perspective of a stakeholder. Make sure you have a go at answering this question. There is no ‘right’ answer at this level – marks will be awarded for sensible points that have been applied to the scenario.
· There are two professional marks available for the question that covers the stakeholder’s perspective. To gain these marks, you must discuss the issue from the perspective of the stakeholder – e.g. if asked for the investor’s perspective, you must answer from the investor’s perspective.
· Current issues are usually examined in Section B as a part of a question (not a full question). However, current issues could be examined in either Section A or Section B of the exam. A question on current issues may require the application of existing accounting standards to a current accounting issue – for example, accounting for cryptocurrency.
· The Conceptual Framework has featured significantly in SBR exams to date – be prepared for this.
General advice: One last thing. Make sure you plan your time at the beginning of the exam (and stick to it) to ensure you don’t over-run on particular question – it is 1.95 minutes per mark (or 1.8 minutes per mark if you allocate 15 minutes to reading the paper).
As with all other ACCA exams SBL is examined as a closed book examination. Unlike the other Strategic Professional level exams which are 3 hours and 15 minutes in duration, the SBL exam has a duration of 4 hours. The exam builds upon the knowledge that you gained at the ‘Applied Knowledge’ and ‘Applied Skills’ levels. However, it does also have its own distinct syllabus content. As with all other ACCA examinations the pass mark for SBL is 50%. You will not be issued with any pre-seen information in advance of sitting your exam as everything you will require will be made available to you within the examination itself. The SBL exam will focus on one main organisation, and all of the question requirements will relate to this organisation. You may have to take on a variety of roles which may require you to adopt an internal or external perspective when answering questions. You will also be required to respond to a variety of people within the organisation. All of the questions in the exam are compulsory. Every SBL exam will consist of 80 technical marks and 20 Professional Skills marks. Question requirements in the exam will assess and link several subject areas from across the syllabus, and these will test your ability to construct appropriate responses and to carry out numerical analysis. The SBL syllabus consists of the following areas:
- Technology and data analytics.
- Organisational control and audit.
- Finance in planning and decision making.
- Innovation, performance excellence and change management.
- Professional Skills.
General advice: While 4 hours (240 minutes) may initially sound like a lot of time in which to attempt the exam, it is crucial not to become complacent in how you use this time.
The Strategic Business Leader exam is demanding, and as such you need to give careful consideration to how you will manage your time to make the most effective use of it. ACCA recommend spending approximately 40 minutes reading, planning and interpreting the requirements and the information/exhibits provided. Based on this estimation when planning the amount of time you will spend on each requirement you should look to allocate 2.5 minutes per mark on offer. This time allocation is based on the fact that the exam is 240 minutes in duration, once the 40 minutes reading time is deducted this gives 200 minutes to write up your answer in order to earn the 100 marks on offer.
You can earn the 20 Professional Skills marks by virtue of attempting the 80 technical marks on offer, so we can divide the 200 minutes remaining over the 80 technical marks to give 2.5 minutes per mark. It is important to note that you can spend longer than the recommended 40 minutes reading and planning your answer. If you do choose to spend longer on this task then you will need to bear this in mind when you come to writing your answers.
Alternatively, you may prefer to work on the basis of 2 minutes per mark (being 200 minutes divided by 100 marks). Regardless of the method you use when allocating your time it is crucial that you stick closely to your timings as this should help to ensure that you do not spend too long on one question requirement to the detriment of those you are yet to attempt.
Reading question requirements: The SBL exam will contain all of the information that you will require to answer the question requirements set. This information will be presented in a series of exhibits. To help you locate the exhibits most relevant to answering a specific question it is therefore important that you take the time to read the question requirements set carefully as this should help to direct you.
Furthermore, reading the question requirements carefully is important as this will indicate the role and the perspective from which you are expected to answer the question. Identifying this early on is important as it will drive how you construct your answer.
Planning your answer: Clearly, if you have gone to the trouble of preparing an answer plan it is important that you use it when writing up your answer. To get the most from your answer plan it is therefore important that you include as much detail as you think will be helpful when the time comes to write up your answer.
When planning your work it is important to bear in mind the ACCA’s guide of using 40 minutes for reading and planning. As mentioned earlier you need to remember that some question requirements may require you to conduct some numerical analysis.
For example, you may be asked to analyse the performance of the organisation featured in the exam. It is important that you plan the numerical analysis that you intend to perform to ensure that you only focus on performing those calculations that are going to support your answer and provide you with something to talk about.
Producing lots and lots of unnecessary calculations for the sake of it will only serve to waste your time in the exam.
Understanding the syllabus and the appropriate use of theoretical models in the exam: To stand the best chance of passing the SBL exam, you will need to have a good understanding of the entire syllabus. However, it is important to remember that unlike other exams that you may have sat in the past, questions in the SBL exam will not ask you to simply regurgitate your knowledge of a particular topic or theoretical model.
Requirements will test your ability to apply your understanding of the subjects covered in the SBL syllabus in the context of the question scenario. Furthermore, requirements will not specifically ask you to use a particular model in answering the question. Whether to use a theoretical model when constructing your answer will be a matter of judgement that you will need to weigh up in light of the information presented to you in the exam. Attempting plenty of questions in the lead up to your exam is the most effective way of developing your judgement in this area.
Understanding the difference between technical marks and Professional Skill marks: Technical marks relate to the knowledge (which we discussed in the previous section), there are 80 technical marks on offer in the exam. By contrast the 20 Professional Skills marks are awarded for displaying the following skills and behaviours:
• Commercial acumen.
Every Professional Skill will be tested in every SBL exam sitting. The Professional Skill being tested will be specified under each question requirement. As you prepare to attempt the exam it is crucial that you take the time to attempt as many practice questions as you can. To increase your chances of exam success you need to ensure that you take sufficient time to develop your understanding of the Professional Skills. Visit the technical articles page of ACCA’s website. There are often very useful articles on ACCA’s website which cover key exam topics and subjects which may help with your exam preparation. There are also a number of articles about how to approach the exam and how to exhibit the professional skills in your answers. All technical articles can be found here: https://www.accaglobal.com/gb/en/student/exam-support-resources/professional-examsstudy-resources/strategic-business-leader/technical-articles.html.
Q1 section A:
Q1 of the APM exam will focus on a range of issues from syllabus section A (strategic planning and control), section C (performance measurement systems and design) and section D (strategic performance measurement).
Section A (50 marks) contains one compulsory question. In recent exams question 1 has often required linking a business’s mission to its performance objectives using the concept of CSFs and KPIs. You may well also have to critique and recommend improvements to performance reports and the balanced scorecard and / or information systems could well be tested in this context. The assessment of performance is also likely to be tested and this could easily include benchmarking as a theme. Financial performance measures (ROCE/RI/EVA etc) are also likely to be commonly examined in question 1 but don’t neglect non-financial issues from syllabus section D such as quality management and reward systems.
Q2-3 section B:
The ACCA have said that one of the section B questions will come from syllabus section E (performance evaluation and corporate failure). In section B, commonly tested areas include quality management, information reporting (e.g. Big Data, Lean Information), the application of strategic models (such as PEST, Porter’s 5 forces, the Value Chain), HR frameworks (e.g. reward & appraisal systems), risk management and environmental management accounting.
Keep checking the ACCA website for articles in the lead up to the exam, any articles written by the examining team are often tested and are very important to read. The article on the examiner’s approach to APM is especially worth reading and analysing.
The exam will comprise of two compulsory questions within Section A which will both be of a case study style. The first question will be 35-marks in length and the second will be for 25-marks.
One of these questions will focus on personal tax issues and the other will focus on corporate tax issues. In question one there will be four professional skills marks, and in section A there will be five marks on ethics.
Section B will comprise of two compulsory 20-mark questions. These will be in a more succinct, note form style. The whole syllabus is examinable throughout the exam.
The exam will examine candidates’ ability to analyse and evaluate the tax implications of various situations, numerical calculations will only be required to assist in producing an answer and no purely numerical questions will be set. Remember that these exam papers would have been written prior to the Covid outbreak and, as such, you should not be addressing any aspect of the virus in answering this paper. Any tax breaks available due to the outbreak are not examinable.
Topics/scenarios we would expect to see are:
· Personal income tax scenarios which could involve: investing in a pension; investing in EIS, SEIS or VCTs, share schemes; employment income possibly with termination payments; a personal service company; property income or a takeover.
· Unincorporated business- particularly including loss reliefs, partnerships or basis period rules.
· A question focussing on overseas issues- this could be income tax, capital gains tax, inheritance tax or a corporate scenario.
· Capital gains tax versus inheritance tax including availability of reliefs.
· Corporate scenarios- likely to focus in more depth on intangibles; research and development; losses; corporate groups or consortia.
· Special corporate scenarios such as liquidation; purchase of own shares; close or investment companies.
· A business transformation scenario question such as selling a sole trade business, incorporation, or, in a corporate context, the sale of shares versus the sale of trade and assets.
· Other common types of question/calculation to expect are:
- Reviewing a pre-prepared computation to spot, explain and correct errors.
- Calculations such as “tax saved through an action”, “after-tax proceeds”, “the value of a post-tax inheritance”, “net spendable income” or the “net of tax cost of something”.
Don’t forget that across the scenarios we will typically expect to see VAT marks available partial exemption, land & buildings, transfer of going concern, capital goods scheme, overseas VAT and registration/group registration tend to be frequently examined.
There will also likely be a couple of marks for stamp duty points if you remember to think about it in your planning! Finally, don’t forget your basic administration points are also likely to be examined- when do we need to pay tax, when do we file a return and what if either of those are late?
You should by now have a good idea of what to expect – the most recent AAA exams have contained no real surprises, although you should be prepared for the look and feel of the embedded email and supporting exhibits.
If you are sitting the CBE there are resources you should access here. If you were planning to sit in June, you should check here for updates.
AAA has the following syllabus areas:
A. Regulatory environment.
B. Professional and ethical considerations.
C. Quality control and practice management.
D. Planning and conducting an audit of historical financial information. E. Completion, review and reporting.
F. Other assignments.
G. Current issues and developments.
Section A will comprise a Case Study, worth 50 marks, set at the planning stage of the audit, for a single company, a group of companies or potentially several audit clients.
Candidates will be provided with detailed information, which will vary between examinations, but is likely to include extracts of financial information, strategic, operational and other relevant information for a client, as well as extracts from audit working papers, which could include the results of analytical procedures. The date will be set as 1 July 20X5.
Candidates will be required to address a range of requirements, from syllabus sections A, B, C and D thereby tackling a real-world situation where candidates may have to address a range of issues simultaneously in relation to planning, risk assessment, evidence gathering and ethical and professional considerations.
Four professional marks will be available in Section A and will be awarded based on the level of professionalism with which a candidate’s answer is presented, including the structure, layout and clarity of the answer provided.
Section B will contain two compulsory 25 mark questions, with each being predominately based around a short scenario. There are no optional questions in AAA.
One question will always test syllabus section E, and candidates should therefore always be prepared to answer a question relating to completion, review and reporting. There are a number of formats this question could adopt, including, but not limited to, matters to be considered and evidence expected to be on file, a going concern assessment, the impact of subsequent events, evaluating identified misstatements and any corresponding effects on the auditor’s report. Candidates may also be asked to critique an auditor’s report or a report which is to be provided to management or those charged with governance.
The second Section B question can be drawn from any other part of the syllabus, including sections A, B, C, D and F. Syllabus section G on current issues is unlikely to form the basis of a question on its own, but instead will be incorporated into the Case Study or either of the Section B questions depending on question content and the topical issues affecting the profession at the time of sitting the exam (for topical issues, see technical articles below).
General advice on topical technical content and exam technique: The previous version of this subject regularly tested topical issues which were covered by the examiner’s technical articles (for example, the evaluation of misstatements in December 2017). There are also five exam technique articles that you must read covering ethics, risk, accounting issues, audit procedures and reporting. All of the examining team’s articles can be found here. You are strongly advised to keep referring to these articles in advance of the exam.
All AFM exams will have questions which have a focus on section B of the syllabus (Advanced Investment appraisal) and section E (Treasury and Advanced Risk Management Techniques). These syllabus areas are therefore high priority areas for your revision.
Q1 section A:
We would expect section A questions to cover a number of different syllabus areas, emphasising the need to have a good broad knowledge of the syllabus (so you are strongly advised NOT to target your revision on a small number of syllabus areas). However, questions are often based on core syllabus areas such as: project appraisal (domestic or overseas), business valuations and business/financial reorganisations; these areas often include cost of capital calculations. Risk management may also feature in a number of different ways e.g. value at risk, real options, hedging, risk mapping.
Q2-3 section B:
· Risk management (currency or interest rate).
· Dividend policy and general financing issues.
· Real options.
General advice: The 50-mark compulsory question will, inevitably, draw from a number of different syllabus areas. The examiner has said that he does not plan exams by referring to past exams (i.e. checking that the whole syllabus is being tested over the course of a number of exam sittings). These factors mean that question spotting extremely difficult for this paper.
Remember that this paper is not a maths exam – in all exam questions the examiner is interested in your ability to communicate well and to give good management advice that relates to the scenario in the question. Keep checking the ACCA website for articles written by the examining team in the lead up to the exam, these are often tested and are important to review.