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ATC F4 (ENG) Exam Tips

• 1 Question 1 of the paper is always based on the nature of law, its creation,
interpretation and enforcement within the English Legal System. A likely area
for examination at this sitting is the interpretation of the law – case law
and/or statute – within the English legal system; or the relationship between
courts and tribunals.
• 2 You can expect at least two questions on contract law, including one problem.
Be ready to answer a question about aspects of the creation of contracts –
invitation, offer and acceptance and consideration are regularly tested – offer,
acceptance, rejection and revocationconsideration and privity are
possibilities for this sitting.
The nature and remedies for breach, including conditions, warranties and the
remoteness of damage, are always key areas, and highly examinable.
Exam Tips – June 2011 Session
• 3 The torts of negligence and passing off were introduced into the syllabus as
topics in their own right from the December 2007 sitting. There has been a
knowledge-based question on this area at every sitting since then. Look
particularly at the role of professionals and the concept of contributory
negligence for this sitting.
• 4 Questions 4, 5 and 6 are usually about business organisations. There may be
a question on partnership law. Be aware of the different forms of
partnership organisation, and the liability of business partners for
business debts and obligations
Also look at the separate legal personality, and the matters to be considered
by the company promoters.
• 5 Corporate finance is always important: look particularly at the nature of
shares and debentures.
• 6 Corporate management and governance are central to the syllabus. Be
ready to explain and apply the rules relating to appointment removal and
duties of directors or auditors. Meetings and resolutions should also be
considered.
• 7 There is frequently a question about employment law, either knowledge or
problem based. Look particularly at ’contracts of service’ and ‘contracts for
services’, and at the role of the Employment Tribunal.
• 8 Questions 8, 9 and 10 are always problem-based, requiring you to analyse a
scenario and often to advise the parties. Question 8 is likely to be about
contract law (see tip (2) above).
• 9 Insolvency proceedings and the rights of creditors could form the basis of
a knowledge or problem-based question.
• 10 Business mismanagement and fraudulent activity is another very topical
subject. Consider market abuse, fraudulent and wrongful trading and their
consequences.
First Institution F4 (ENG) Exam Tips

Sources of law
Offer and Acceptance
Contract terms
The law of torts
Employment law
Partnerships
Corporations and separate legal personality
Directors
Company meetings and resolutions
Fraudulent behaviour
F5
First Intuition tips

Mix and yield/quantity variances
Target costing
Throughput accounting
Risk and uncertainty
Optimum pricing
Learning curves
Divisional performance and transfer pricing
Costing: Cost volume profit (CVP) and lifecycle costing (numbers and discursive)
Budgeting: Discursive. Possibly including learning curve calculations
Decision making: Relevant costing and pay off tables (Maximax, maximin, minimax)
Variances: Basic variances with interpretation
Performance measurement: Interpretation of data, possibly concentrating on environmental issues
F6
• Income tax comprising employment income (including bank interest and dividends – remember to gross up at 20% and
10% respectively) and trading income. Possibly husband and wife scenario or individual that has both employment and
trading income. Additional rate taxpayer and/or PA restriction.
• Employment income to include accommodation, car and fuel benefit with provision of benefit part way through the year
(apportion the benefit)
• Adjustment of trading profits
• Calculation of corporation tax with a marginal relief calculation.
• Capital allowances calculation (including AIA, special rate pool and 100% FYA on low emission cars).
• Inheritance tax (new to the syllabus) on lifetime gifts and as a result of the individual’s death.
Capital gains reliefs including PPR rollover gift relief and entrepreneurs’ relief
the group.com
• PPR, rollover, entrepreneurs relief.
• Corporation tax group relief.
First Intuition tips

Q1 – Income tax with BIKs
Q2 – Corporation tax (VAT, IBA’s, CA’s)
Q3 – CGT (Rollover relief, gift relief & PPR relief)
Q4 – Partnerships with opening year rules
Q5 – IHT

__________________
WORK , WORK , WORK WITH HONESTY AND FAITH IN YOURSELF

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F7
First Intuition

Qn 1 Consolidation- Revenue statement with goodwill computation
Qn 2 Single company accounts with, lease, non current asset, tax and sale or return
Qn 3 Cash flow and report writing
Qn 4 The framework with contingent liabilities and Financial instruments
Qn 5 EPS

ATC

The examiner is Steve Scott, he has written an article in July 2010 Student
Accountant relating to IFRS 3 group accounts. This is no major indicator as we
know that Q1 will be a consolidation issue, however, please ensure that you have
read this article.
The June 2010 pass rate from this paper was very poor, at 28%, and ACCA have
now enhanced the F7 guidance for students in their website. Please ensure that you
do visit the F7 specific area of the website and read the various articles included. It
should be noted that these articles have not been written by the examiner but they
should all be helpful in increasing your knowledge base.
Q1 will be a consolidation question.
Q2 will be a final accounts question.
Q3 will be a ratio analysis or cash flow question or a mixture of the two.
One of the main reasons students fail the exam is their inability to write and
discuss accounting issues, many students focus on the numerical parts of the
exam, which may only account for 65% of the marks. You must ensure that you
are able to write and discuss about financial reporting issues.
Exam Tips
Common areas that feature on a regular basis in the exam are as follows
• Leases
• Revenue recognition
• Substance vs form
• Convertible instruments (IAS 39)
• Accounting for taxation
• Accounting for assets, particularly IAS 16
Exam Tips – June 2011 Session
Important areas that have not been examined under the new syllabus and
therefore may feature in the near future are
• Construction contracts
• Impairment of assets
Exam Technique
Don’t forget the following advice while in the exam:
Answer all questions, including the written elements of questions. It is very difficult
to pass the exam by learning the numbers.
Cross reference your workings, they are an integral part of your answer.
Make sure you get the sign the right way round with any cash flows, the examiner
sometimes only awards the marks if the sign is correct.
Answer the question set, not the one you wished had been set, focus on the
requirements especially relating to the written part of the answers.
Look at the marks available for each part of the question, do not write pages of
answers for a 3 mark part similarly if the question has allocated 6 marks then make
sure you adequately answer that part, a line is not enough to get you 6 marks.
For a 25 mark question you should be spending no more than 45 minutes on it.
Good Luck!
In addition to noting the guidance set out above, students should make use of
ACCA past examination papers, pay close attention to articles published in Student
Accountant and should read the Examiner’s review of the last examination session
at ACCA Students, ACCA.
Examiner’s tips

The Financial Reporting paper pass rates were in a downward spiral until December 2010, explained F7 examiner Steve Scott. The June pass rates are also generally two or three percentage points lower than those achieved in December. Scott revealed that candidates on their first attempt have the highest success rate and those sitting at the third or more attempt have very low pass rates – at some diets these candidates barely get into double figures, he revealed.
Now the December 2010 results were genuinely better. Consolidated accounts (Q1) is still the best answered question, but before December the average mark was declining slightly (by 2 marks). PQs do well on the techniques, he said, aided by tutors’ standard workings.
Candidates score well on Q2 (financial statements), although few gain full marks. However, as with consolidations the average mark is declining. Statements of cash flow are also well answered.
So that’s what candidates do well, the list of what isn’t done well is slightly longer! Scott is concerned that although the technique is good for consolidated accounts, he’s just not sure PQs understand what they are doing. Students also don’t understand post-acquisition change of NCI and this is often completely omitted in income statement questions.
Other problems areas are:
• Contingent and deferred consideration.
• There is confusion between pre- and post-acquisition adjustment.
• Calculation of group retained earnings is also poor.
• Written sections (as in June 10) are often left or totally misunderstood.
For Q2 (financial statements) adjustments are not done well. Even simple deferred tax is poorly understood, let alone when he asks for a revaluation. There also seems to be a lot of confusion over construction contracts. Scott went on to say that revaluations of non-current assets is examined in virtually every paper, but it is still answered badly.
Other areas of concern are:
• Revenue recognition issues – deferred revenue relating to ongoing serving, agency sales and a cut off error.
• Not applying the effective interest rate or applying it to nominal value of loan instead of carrying value.
• Classified issues: gains on investment, presentation of dividends.
When it comes to Q3 (performance appraisal) the examiner explained that to prevent mechanical churn he said he would target certain cash flow classifications and specific ratios. The response has been very poor and there appears to be a fundamental lack of understanding of what is required.
Full cash flow statements are generally done well, but the focused extracts less so.
His more specific recently tested problem areas here have been:
• Provision for environmental costs shown as a cash flow.
• The inability to distinguish the cash flow effects of a loan to equity conversion/redemption.
• Answers to the effects of (new) finance leases were weak.
Scott said that candidates must ensure they are up to speed with F3 material before they embark on F7. He feels candidates must study the wider syllabus over a sensible time period. In the exam hall, too many PQs don’t attempt all the questions asked and he pleaded for them to avoid question-spotting. Students can also learn from the mistakes of previous students by reading the Examiners’ Reports.
He revealed that one of his markers reported despair as she had lost count of the number of students who had scored around 40 marks after completing the paper up to Q3 (a) and then failed to score more than 5 further marks for the rest of the paper. That’s just sad, said Scott.
The examiner stressed that candidates must focus on developing an ability to apply accounting standards to a specific example. They have to be prepared to criticise and correct accounting treatments suggested by management. It is unlikely that simply agreeing with them will earn many marks – that’s not what the exam is about!
Scott also asked students to focus on the requirement and plan and present the answer clearly. He wants sections of questions answered together, not scattered through the answer booklet. That makes is hard for the markers than it need to be.
He likes referenced workings, although workings can be taken to excess becoming just time wasting.
Handwriting must also be legible and the language used intelligible. And while exam technique is useful he pointed out that it is no substitute for knowledge.
The UK paper is changing and in future will mostly be based on the international paper (at least 90%). Therefore he will be using IFRSs and the US dollar is the currency denomination. Up to 10 marks will test UK differences to IFRS.
Scott revealed there will be a slight increase in rules based (legal) questions. Candidates should also be aware of revisions to framework and standards under examinable date rules.
Finally, he said that his question requirements may become a bit long to avoid any ambiguity.

DO YOU UNDERSTAND?
• Substance over form issues.
• Treatment of financial leases.
• EPS, particularly what dilution means.
• Can you apply definitions from the framework and standards?

MEET THE EXAMINER: Stephen Scott qualified as a chartered accountant with Stott & Gollard. He then spent several years lecturing in the private sector before moving to his current home – Manchester Met University. He started working for the ACCA as a marker before becoming the assessor, and then the examiner in 1997.

__________________
WORK , WORK , WORK WITH HONESTY AND FAITH IN YOURSELF

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F8
First Intuition

Qn 1 : Qn on substantive audit procedures and tests of control on a key area of the Statement of Financial Position e.g. inventories or receivables
Q2 : short 10-marker on ISAs e.g. audit reports, fraud & error
Q3 : Qn on “identifying and explaining” the threats to auditor independence and ways of managing them
Q4 : Mgt letter : identifying the weaknesses, consequences and recommendations in a particular company
Q5 : subsequent events

ATC

History shows that the “well prepared candidate” stands by far the highest probability of
passing examinations.
Exam Tip
BE WELL PREPARED.
Being well prepared means, at the very least:
Working through all of the sessions within your study system (on the basis that a
good study system covers the whole syllabus and not just a “best guess” 70%).
Working through all past examination questions and completing all
monitoring/progress tests and mock examinations under full examination conditions.
Reading all of the examiner’s and other subject articles – they do not write for fun.
Note that examiners no longer write articles for the forthcoming examination – so
articles that are at least six months old could be very relevant (e.g. the articles on
analytical review and ratios for the December 2011 examination).
Careful study of the examiner’s reports on past examinations. These contain
excellent tips of what students should NOT be doing.
Ignoring “Exam Tips” that are just a list of somebody’s favourite topics.
For re-sit students, being aware of the changes made to the syllabus for June 2011 –
read the examiner’s article on these changes (study systems based on the
examinable documents will already cover them – Share capital, reserves and
directors’ emoluments will be new).
Regularly visiting ACCA Students, ACCA
At the recent 2011 ACCA Teachers’ Conference ALL examiners, whilst
understanding the desperation of students for examination tips, clearly stated
that such tips were a danger to a student’s ability to pass and MUST be ignored.
Having said that, it is only fair that I share with you what I thought was a “slip of body
language” by the F8 examiner, Pami Bahl, in one of her presentations at the ACCA
conference. As always, make sure you take a calculator into the exam with you as there
may be a question coming up on materiality, dealing with errors and extrapolation of test
results. It may be in June, or December or even next June (2012) as examiners tend to
write two or three exams ahead. Or, of course, I completely misread the situation.
Exam Tips – June 2011 Session
Pami Bahl
Pami Bahl, the examiner, does not leave an audit trail for you to follow to identify what will
be in her next examination. Just because a subject was examined in the previous
examination does not mean that it will not be revisited in June.
Ensure you regularly visit the ACCA student website for all F8 articles, e.g. her article on
her examination approach is essential reading. Reading this article and Pami’s examiner’s
reports makes it clear that her examination questions will be practical and a purely
theoretical study approach is unlikely to bring success. Her past exams have also shown a tendency for her to ask some “off the wall” elements within the questions – “out of the box” thinking required.

__________________
WORK , WORK , WORK WITH HONESTY AND FAITH IN YOURSELF

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F9
First Intuition

• Discussion of the economic environment and the impact on interest and exchange rates
• Working Capital Management
• Investment Appraisal & Cost of Capital
• Business Valuations
Examiner’s tips

Antony Head, the examiner for F9 Financial management, was concerned that too many students try to pass his paper on calculations alone. “You can’t get through just on the numbers,” he said.
Head, who has a marking team of 58, said many students also suffer from exam inertia – they love to take an answer from one exam and put it in the next one. He said: “Each examination consists of new questions – my contract says they have to be unique.”
Why, he asked, do students have so much difficulty in business finance? With long-term financing in each of the last four exams he was hoping they would start to get better at it – they aren’t.
The Past Examiner’s Reports are a key free resource. They take Head ages to write and dissect each question. He stressed that candidates must study the whole syllabus section by section. You must also develop an FM Toolkit. That means mastering the techniques you will need in the exam. Of course you need to study the theory, but Head wants this linked to techniques.
When it comes to the cash flows students must think about the amount and timings. Also, study and understand risk, he said. Ultimately, all exam sitters have to reflect on what a financial manager would do.
The one word he would use to help students pass is ‘reflection’. It is important for students to learn to do this. They have to know where they made mistakes and the areas where they are weak. Head understood that we all live in a hectic world and that students might find this difficult, but it is an important part of being an accountant.
PQs really must practise past questions if they want to succeed. What about preparing your own revision cards, he suggested. Planning written answers will also help you in the exam hall – so long as you write legibly. “Remember, a key skill of any accountant is to communicate,” he said. In the exam itself, Head pointed out that sitters should include all their workings and label things clearly.
Islamic finance has been added to the F9 syllabus at the knowledge and comprehension level. That means you will be asked to ‘compare and contrast’. But, apart from that, everything remains as it was.

MEET THE EXAMINER: Antony Head is a principal lecturer at Sheffield Business School and has taught there for 18 years. He has been examiner for P9 Financial Management since 2002. He is co-author of Corporate Finance: Principles and Practice.
then the examiner in 1997.

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WORK , WORK , WORK WITH HONESTY AND FAITH IN YOURSELF