Your September Strategic essential and optional exam tips…
SBL
Welcome to your first ACCA 4 hour exam! SBL 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.
The 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. Yu will also be required to respond to a variety of people within the organisation.
All the questions in the exam are compulsory and will consist of 80 technical marks and 20 professional skills marks.
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.
To stand the best chance of passing the SBL exam, you need to have a good understanding of the entire syllabus. However, remember questions will not ask you to simply regurgitate your knowledge of a particular topic or theoretical model. 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.
SBR
The first question in section A will be based on group accounting and may include complications such as a foreign subsidiary, discontinued activities, disposals and/or acquisitions. Be aware that this question may test consolidation statements of cash flows as was the case in December 2018.
In answering the questions, it is vital that you explain the principles underlying any calculations you have performed, as this is where the majority of the marks can be earned.
The second question 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.
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. For example in the December 2018 exam, this involved explaining the nature of tax accounting in the financial statements to an investor.
Current issues could be examined in either section A or section B. The Conceptual Framework has featured significantly in SBR exams to date – be prepared for this to be the case in September 2019 as well.
AAA
There should be no surprises here. 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. You will be provided with detailed information, which will vary between exams, but it likely to include extracts of financial information, strategic, operational and other relevant information for a client business, as well extracts from audit working papers, which could include the results of analytical procedures.
Four professional marks will be available in section A, so think structure, layout and clarity here.
In section B one question will always predominantly come from syllabus section E, and consequently candidates should 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, the assessment of going concern, 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 other section B question can be drawn from any other syllabus section, including A, B, C, D and F. Syllabus section G on current issues is unlikely to form the basis of any 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.
AFM
From September 2018 every exam has had questions which have a focus on section B of the syllabus (advanced investment appraisal) and section E (treasury and advanced risk management techniques).
Questions in section A 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 eg, value at risk, real options, hedging, risk mapping.
Q2/£ expect risk management (currency or interest rate), dividend policy and general financing issues, or real options.
Remember this paper is not a maths exam 0 in all exam questions the examiner is interested in your ability to communicate well.
APM
Q1 will focus on a range of issues from syllabus section A (strategic planning & control), section C (performance measurement systems and design), and section D (strategic performance measurement).
In recent exams Q1 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 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 measurers (ROCE/RI/EVA etc) are also likely to be commonly examined in Q1 but don’t neglect non-financial issues form syllabus D such as quality management and reward systems.
In section B commonly tested areas include quality management, information reporting (eg, big data, lean information), the application of strategic models (such as PEST, Porter’s 5 forces, the value chain), HR frameworks (eg, reward and appraisal systems), risk management and environmental management accounting.
ATX
One question in section A 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.
Topics/scenarios you can expect to see:
*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 t 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 ort investment companies.
*A business transformation scenario question such as selling a sole trader 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 basic administration points are likely to be examined – when do we need to pay tax, when do we file a return and what of either of those are late?
