ACCA expert tips and technique (2024)

Corporate and Business Law (LW) tips and FAQs

• To learn the courts structure draw yourself a chart of the courts then add arrows up to indicate the route of appeals and arrows down to indicate judicial precedence.
• Deadlines and penalties can be hard to remember. Create a table and populate this as you go through the material so you have a comprehensive list which you can revise from at the end.

FAQs

Q. What is the difference between a Limited Partnership and a Limited Liability Partnership (LLP)?
A. A Limited Partnership is formed under the 1907 Act and means that such partnerships must have at least one unlimited partner. An LLP is governed by the 2000 Act and under this all partners have limited liability, restricted to the amount of capital invested.

Q. What is the difference between revocation of an offer and rejection of an offer?
A. Revocation is where the offeror (the person making the offer) takes back his offer. For example, someone who is offering for sale a car, changes their mind. Rejection of an offer is where the offeree (the person to whom the offer is made) does not accept the offer. For example, they decide not to buy the car.

Q. Do I need to know all of the cases?
A. No, there isn’t a need to learn the cases as you will not specifically be examined on case names or facts. However, having a familiarity with cases does help when it comes to analysing the scenarios in multi-task questions.

Q. Is there partial marking?
A. For the Section A questions worth 2 marks there is no partial marking, it's all or nothing. There is partial marking for the Section B multi-task questions.

Performance Management (PM) tips and FAQs

• Don’t skip parts of the syllabus. Spend time learning the rules and definitions.
• Practice plenty of questions to improve your ability to apply the techniques and perform the calculations.
• Manage your time carefully and make sure you give sufficient time to the written elements as well as the calculations. This exam is roughly 50% calculations and 50% words so don’t neglect the discursive elements!
• Have a positive mindset. Focus on how much of a question you know and think you’ve got right rather than just focusing on the bits you don’t know.
• Spend the last five minutes of the exam reading through your answers and making any additions or corrections.
• For section B and C questions, Read the requirements carefully before launching into a full analysis of the scenario given, then do a brief technical download of the tools / knowledge you will need to answer the question. You can then go through the scenario more efficiently by annotating and extracting the information to complete the question.
• In section C questions, you should do everything you can to make things easy for the marker. The marker will find it easier to identify the points you have made if your answers are well structured with a separate paragraph for each key point.
• Show your workings. Even if you make a mistake at the start of the question, you can still earn method marks.

FAQs

Q. Can I get workings marks for Section A and B questions?
A. No, these questions are all or nothing. 2 marks for a correct answer, nothing if incorrect. So it is vital you practice the Objective Test style questions to ensure you have the exam technique required to get to the correct answer in the exam time.

Q: Will we be examined on a topic which appeared in the previous exam?
A: Yes, it is possible, although maybe in a different context: e.g.: in one exam a question asked for pricing strategies relevant for an established brand, whereas in the exam 6 months later the question asked for pricing strategies which would be relevant for the launch of a new product.

Q. For section C questions, what is the percentage split between written elements and numbers/calculations?
A. It’s roughly a 50/50 split.

Q. If I get a calculation wrong at the beginning of a question will I lose all the marks for my subsequent answer?
A. No. Each mistake is penalised only once; then follow through marks are given based on your incorrect answer

Q. Will the answers to section C be given in a word processor format or spreadsheet format?
A. For parts of the question that are predominantly numbers and calculations, a spreadsheet will be provided for your answer. For parts that are focussed on written/discursive elements, it will be a word processor.

Q. Do I need to show my workings?
A. Yes, definitely - but only in section C. There are many calculations in Performance Management (PM) and it is very easy to make an error on one calculation and then carry that mistake forward through the rest of your answer. If no workings are shown then the marker has no scope to award any marks at all. If workings are shown then you will simply lose the marks for the one initial calculation error. Please note that the marker can view the formulas you use in the spreadsheet cells if they want to understand where a number comes from, but you still need to show any further workings.

Q. Can I pass by just learning the calculations?
A. No, the Performance Management (PM) exam can sometimes be as much as a 50:50 split with regards marks available for both the calculations and discussion aspects. Being able to write around the numbers calculated is vitally important.

Taxation (TX) tips and FAQs

• Make sure you read the tax rates and allowances in the exam. You may find they prompt you to remember things. For example, as high emission cars only receive a 6% WDA for capital allowances, it may remind you that high emission leased cars with CO2 of > 50g/km have an add back in tax adjusted profit computations of 15%.
• The badges of trade to determine if someone is self-employed can be remembered using the mnemonics SOFIRM and FAST:
  • Subject matter of the transaction
  • Ownership period
  • Frequency of the transactions
  • Improvements and marketing
  • Reasons for sale
  • Motive (profit)
  • Finance
  • Acquisition (method of)
  • Similar transactions

FAQs

Q. Why don’t I include all NS&I interest in the income tax computation?
A. National Savings Certificates are exempt from income tax and should be noted as such and excluded from the computation. Other NS&I account interest is taxable and should be included in the computation.

Q. What are the core areas I need to learn?
A. You can find this at the front of the Kaplan Study Text or on the ACCA website, but generally these are income tax, NICs, corporation tax, capital gains tax, VAT and inheritance tax.

Q. How much work do I need to do?
A. Enough for you to feel confident on the day, I always say you don’t want to feel you’ve let yourself down due to a lack of work as that is one thing you can control!

Q. Where can I find good practice questions?
A. Use the Kaplan Exam Kit, complete the revision mock and attend a Kaplan Pre-Exam Workshop (formerly QBD).

Q. Where can I access relevant articles?
A. They are all on the ACCA website. Ensure you look at articles updated for the current Finance Act.

Q. Are proformas important?
A. Pro formas are vital to success in this exam. The examining team will be expecting you to use the correct layout for each question. If they have to search through your answer for the relevant part, this will not improve their disposition! For adjustment of profit, ensure you put '0' if the amount is allowable.

Besides which, pro formas give you the student, an easy way to remember the key elements of each individual tax. My advice? Write the individual pro formas on separate pieces of paper, and adorn your room with them. Seeing them every day, will help cement the format in your minds.

Q. Do I need to remember all the loss section numbers from the legislation?
A. In short, no. The examiner has stated no section numbers are required at all for loss relief. Explain what you are doing with the loss relief.

Q. Can I not revise one of the taxes if I don’t like it?
A. No! The Taxation (TX) exam contains 33 separate questions, including 30 objective test questions and you can expect all of the taxes on the syllabus to be tested at each sitting. The easiest way to pass is to ensure that you have revised all areas of the syllabus prior to sitting your exam. However, please remember that a pass mark is 50%, so even if you do not feel as confident in some areas you may still pass the exam even with poor marks in some syllabus areas.

Financial Reporting (FR) tips and FAQs

Exam technique

• Expect not to finish any question. When you run out of time for that question, stop and move on to the next. Not finishing a question is not something to feel bad about, it’s just part of your technique for passing the exam.
• Be prepared that your statement of financial position or cashflow may not balance. If it doesn’t, leave it and get on with the rest of the exam – don’t worry about it now. (If it does balance, well done!)

SECTION C

Group consolidation

• For the group consolidation question you will benefit from having the proforma/standard workings of your final answer set up first. For example if the question requires a consolidated SFP then drawing up the CSFP can help you get all the easy marks by adding across 100% of the Parent and subsidiary figures. The other headings can have the standard working number written beside them instead. It’s a good idea to leave a couple of lines spare in each section of the CSFP in case other things come up in the additional information.
• In addition to this, you can also set up the standard workings. The subsidiary share capital figures and year-end retained earnings can be put into these without reading any of the additional information. In addition to this the parent’s retained earnings figure can be put into W5 (Retained earnings) without reading any additional narrative.
• With all of the proformas and standard workings set up, it means that you are able to tackle the issues in the order that they are presented in the question. It also allows you to deal with both sides of any adjustments as everywhere is set up to make the adjustments. It hopefully helps your CSFP to balance and means that each issue only has to be addressed once, thus helping with time management. Also, if you run out of time, you will get full credit for all that you have already done provided everything is referenced through.
• A similar process can be applied to the CSPL equivalent of setting up final answer and workings to help tackle the issues that come up.

Single company financial statements

• As with the group question, it may be possible to set up the proforma for the answer, particularly if the data in the question is draft financial statements rather than a trial balance. If possible it then means that the draft figures may be placed in the appropriate cell, ready for adjustments as they arise. Generally speaking there are often more adjustments required for cost of sales and property, plant and equipment figures, so these are likely to need separate workings rather than just being input as part of an equation.
• Deal with your ‘favourite’ or easy adjustments first. If there is an adjustment that you are unsure of, come back to it. It is very easy to get bogged down and waste time on a difficult adjustment at the expense of doing an easier one that appears later in the question.

Performance appraisal

• With a performance appraisal question you’re likely to be asked to calculate ratios. When calculating ratios, if you are unsure of a particular calculation always have a go, as even if the calculation is incorrect you will be awarded merit for your discussion of the incorrect number in the written section of the question. It is essential that you show your workings for any calculations.
• When appraising the performance of a company ensure that you always refer to the scenario provided to ensure maximum credit is awarded.

FAQs

Q. What are the core areas I need to learn?
A. As this is a compulsory exam the entire syllabus is examinable, and you may see minor topics examined within Section A or even Section B. Section C will contain an interpretation question and a financial statements preparation question, covering a group and a singe entity. So you will either see a group interpretation with a single entity preparation, or a single entity interpretation with a group preparation.You won’t have to prepare a full statement of cash flows, but you may need to show extracts, so make sure that you practise this area.

Q. How much work is necessary to pass this exam?
A. You will need to ensure that you have practised enough questions to feel comfortable with both the exam style and the content of the questions. There are always familiar elements to every question. Read the Examiner Reports on the ACCA website.

Q. How should I present my answers?
A. Always present your answer first and include all supportive workings below this (e.g. set up your proforma consolidation and include the 5 standard workings behind).

Q. How do you treat PUP adjustments between a parent and subsidiary?
A. For transactions between a parent and subsidiary, you always reduce the inventory on the CSFP. The opposite entry will be to reduce the selling company's reserves, so if the selling company is the parent, reduce W5, for the subsidiary reduce W2 (SFP and post-acquisition column). WIthin the CSPL the PUP increases cost of sales of the selling company, so when calculating the non-controlling interest you’ll need to deduct any subsidiary PUP from the subsidiary profit.

Q. How do you treat PUP adjustments between a parent and associate?
A. For transactions between a parent and associate, you always reduce the group reserves on W5. The opposite entry will depend on which company is holding the inventory. If the parent is holding the inventory, and therefore the inventory is included on the CSFP, the inventory on the CSFP should be reduced. If the associate is holding the inventory, you should reduce the investment in associate W6. Within the CSPL the PUP will either increase cost of sales (parent selling) or reduce share of associate profit (associate selling).

Q. Sometimes my non-current asset revaluation doesn’t agree to the answer. How do you treat a revalued asset in the financial statements?
A. When revaluations are examined, a common error is the incorrect identification of the revaluation date. If the revaluation takes place at the start of the year you must revalue the asset immediately, then depreciate the revalued amount over the remaining useful life. If the revaluation takes place at the end of the year, a full year's depreciation should be charged based on the asset depreciation policy, then the revaluation should be performed at the year end.

Audit and Assurance (AA) tips and FAQs

• Never let anyone tell you it’s all about common sense – make sure you also do the required learning. You MUST know:
  1. The ethical principles – not vaguely but precise
  2. How to describe audit risks and how the audit approach will address them
  3. The controls present at each stage of the sales, purchases and payroll cycles
  4. The key substantive tests (including analytical procedures) for each area of the financial statements
  5. What completion activities the auditor has to do and how to form an audit opinion
• You must learn the ISAs – not the numbers, but the objectives and key provisions of each ISA. Approximately 20 - 30% of the exam will test pure rote-learned knowledge.
• This examining team wants QUALITY not QUANTITY.
• Look at the past exams – many of the same points come up time and time. Practice makes perfect.
• Time allocation is as important in this exam as it is in the others – 1.8 minutes per mark.

FAQs

Q. What are the core areas I need to learn?
A. You can find this at the front of the Kaplan Study Text or on the ACCA website, but generally these are Risk, Audit evidence and procedures, Systems and controls, Completion and Audit reporting.

Q. How much work do I need to do?
A. Enough for you to feel confident on the day, I always say you don’t want to feel you’ve let yourself down due to a lack of work as that is one thing you can control!

Q. Where can I find good practice questions?
A. Use the Kaplan Exam Kit, do revision, final assessment and the mock exam and attend a Kaplan Pre Exam Workshop (formerly QBD).

Q. How much do I need to write?
A. Enough to answer the question, without adding unnecessary information. Use the model answers in the Exam Kit for guidance.

Q. Do I need to know the ISA names and numbers?
A. No. You just need to know the main requirements of the ISAs.

Q. Where can I access relevant articles?
A. They are all on MyKaplan or the ACCA website.

Q. How should I present my answers?
A. For certain requirements you will present in a column format which will already be set up for you in the CBE. Your answers should be clear and concise. Make each point separately. Try to avoid writing in paragraphs as there is a tendency to cover several points briefly which won’t score all the marks available.

Q. If I read and learn all the information in the text book will I pass?
A. Knowledge alone is insufficient if you want to pass this exam. Past and present examiners have stated that the key to passing Audit and Assurance (AA) is to apply knowledge of auditing and assurance to scenario information. Many students fail to read the requirements and simply knowledge-dump everything they know about the topic in the hope that it will achieve the required marks. This will not work.

Q. Do I have to write in full sentences?
A. It is common in Audit and Assurance (AA) requirements to be asked to explain or discuss issues. This requires candidates to write in simple clear English to ensure they gain maximum credit in the exam. This means writing full, but concise, sentences.

Q. Why are the global pass rates traditionally lower than other papers?
A. Audit and Assurance (AA) is a comprehensive auditing exam which examines high level planning, risk and completion issues together with the detail of auditing procedures. Many students, particularly those who do not work in audit, can often find the issues hard to understand. This, combined with the highly discursive (written) nature of the exam makes this exam a tricky one.

Q. Do I have to use a ‘column format’ approach to certain questions?
A. Yes. Where it is relevant, a table will already be set up in the CBE for you to use.

Financial Management (FM) tips and FAQs

FAQs

Q. What does a Positive NPV tell us?
A. A positive NPV shows that the return on the project is greater than the required return to the investors (cost of capital). A positive NPV means that shareholder wealth would increase if the project is undertaken.

Q. Will a tax rate of 30% be used in the exam for NPV calculations?
A. Any tax rate could be used in the exam, so make sure that you note the rate to be used while reading the question.

Q. Do I need to know the hedging calculations?
A. Yes, you may be required to calculate the outcome of a forward contract and/or money market hedge calculations but you will not be required to do futures or options calculations. For futures and options, instead you will have to evaluate statements made in relation to them to decide whether they are true or false.

Q. Do I need to know the WACC formulas?
A. The WACC formula is provided in the exam, along with the Growth model formula (used to calculate the cost of equity with the dividend valuation model) and Gordon’s growth approximation (used to calculate growth from the dividend retention rate and return on capital), but you will need to remember the cost of debt calculations, including when to adjust for taxation, and how to calculate the growth rate of dividends from past dividend information.

Q. How do I approach a WACC questions?
A. First, note how many long-term sources of finance the company has. You will need to calculate a market value (or sometimes nominal value instead) and a cost for each source. There will be an equity source (ordinary shares), possibly some preference shares and possibly multiple sources of long-term debt, including irredeemable, redeemable, convertible and non-tradeable debt. Between two and four different sources are likely in a question. The cost of equity may be calculated in one of two ways. If you are given information on one or more past dividends, you should use the dividend valuation model (DVM). If, instead, you are given information on beta factors, risk free rates and market rates of return, you should use the capital asset pricing model (CAPM). Once you’ve calculated a cost and a value for each source of long-term finance, apply the WACC formula to calculate the overall WACC.

Q. Will there be lots of written parts in the exam?
A. The exam may vary from roughly about 40% calculations and 60% written to 60% calculations and 40% written. This will vary from one exam to the next.

Q. How many hours' study do I need to pass the Financial Management (FM) exam?
A. The Financial Management (FM) exam is quite technical so you would need to study hard all the way through the tuition phase and revision phase. The time that you will need to spend is very individual, depending on how quickly you can grasp the concepts that are new to you and how well you can apply those to exam questions.

Q. What are the most important areas?
A. There are 7 syllabus areas and every one of them will be tested in each FM exam:

1. Carry out effective investment appraisal
2. Discuss and apply working capital management techniques
3. Identify and evaluate alternative sources of business finance
4. Discuss the role and purpose of the financial management function
5. Assess and discuss the impact of the economic environment on financial management
6. Discuss and apply principles of business and asset valuations
7. Explain and apply risk management techniques in business.

The first three areas can be tested in any part of the exam, so both in the short, 2-mark objective testing questions and the longer, 20-mark constructed response questions. The remaining areas will mostly only be tested as 2-mark questions.

The nature of the FM exam means that you cannot question spot and only focus on areas that are likely to crop up. Every area will be tested!

Q. Should I just focus on the numbers?
A. Only if you don’t want to pass. Although the numbers are important, approximately half of the marks are for the written elements. In the objective testing questions, you will have to evaluate written statements to decide which are true or false. In the constructed response questions, you will have to write discussions and make reasoned recommendations.

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