ACCA 3.5 Exam Tips

3.5 Exam Tips
June 2006

Section A

Always difficult to predict the subject matter of the case scenario. Therefore this time it might be something simple in structure and based on the Manufacturing environment.

Areas that could be included within the requirements could include

• 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

Qs: 52, 51, 49, 47 and 45

Section B

Marketing, including new product development. In part suggested by the recent article, and still has not been examined. – Refer to Dec 2003 Q1d as a good review.

Qs: 24, 26, 27, and 34

Human resources. This is feasible this time because it is an important subject, which has been absent for the past few sittings.

Qs: 29, 30 and 32

Globalisation strategy. The strategic development of global businesses was very popular when the paper was first introduced. It remains relevant and could be due another appearance.

Qs: 41, 42, 43 and 48

Ethics and corporate social responsibility. With all of the talk (and recent cases) of corporate scandal ethical behaviour is a very topical area of the syllabus

Qs: 16, 17, 18 and 49

ACCA 3.6i Exam Tips

ACCA Paper 3.6 (Global)
Advanced Corporate Reporting
June 2006 Exam Tips

For each area described, please note the reference to useful questions from BPP’s Practice and Revision kit (P&R kit) 2006 edition. We recommend you practise them all to get broad syllabus coverage.

Section A
The section A question can be on any of the traditional higher-level group accounting topics that are not examinable in paper 2.5. Complex group structures, foreign subsidiary or group cash flow statement appear to be the most likely topics for this sitting.
The question often includes an adjustment for 4 or 5 marks on another area such as pensions, financial instruments, assets 'held for sale' or incorrect accounting entries.
2006 P&R kit practice questions: Largo, Memo, Squire.

Section B
Section B questions can either by a single question on one topic or questions that cover a range of standards.
Possibilities for examination include:

• 'Events' questions such as shutdown of an operation, switch to IFRS, natural or deliberate disaster, bringing in areas such as: impairments, provisions, events after the balance sheet date, non-current assets held for sale, discontinued operations, pension scheme curtailment effects, etc
• 'Mixed' questions where a range of standards are covered in separate unrelated parts of the question, such as related parties, recognition and impairment of tangible and intangible assets, foreign currency transactions, revenue recognition, leases, changes in accounting policies or deferred tax.
• Single topic questions in more detail (theoretical aspects followed up with calculations) such as segment reporting, earnings per share, first-time adoption of IFRS (IFRS 1) or financial instruments (see examiner's articles below)
• Questions on topical areas, such as the continuing attempts to bring about international harmonisation and the effect on a company's accounts of applying IFRS, possibly linked with IFRS 1, recent exposure drafts on the planned changes to groups and provisions and share-based payment
• Group reorganisations, especially if question 1 is a cash flow statement question
  2006 P&R kit practice questions: Argent (INT kit only), Transystems, Issue, Pohler Speed, Cohort, Rockby and Bye, Low Paints, Enterprise, Gear Software, Trident, A B C & D
• Performance and valuation measures, how they are changing and how they are affected by accounting policies often appear in the exam.
• A discussion question looking at current developments in corporate reporting. Topics that could appear here include: social and environmental reporting, business ethics, accounting standards for small and medium-sized entities and reporting on the internet.
  2006 P&R kit practice questions: Bobble, Value Relevance, World Energy, Mineral

Relevant articles

Useful articles – www.accaglobal.com/students

• Dealing with debtors, Graham Holt (examiner), 14 October 2005
• IAS 39, Graham Holt (examiner), 17 May 2005
• IAS 39 Part 2, Graham Holt (examiner), 19 May 2005
• First-time adoption of International Financial Reporting Standards, Steve Scott, 4 January 2005
• Improving standards, Graham Holt (examiner), 23 July 2004
  Look out for other articles on the website in the months leading up to the exam.

Health Warning! The examiners deliberately try to avoid question spotting. Just because a question featured last time, doesn’t mean it won’t feature this time. Use the tips as areas to have a good look at, but remember that no one knows what is in the exam, apart from the examiner. Your safest bet is to achieve good syllabus coverage in your revision, as the examiner aims to do in the exam.

ACCA 3.7 Exam Tips

ACCA Paper 3.7
Strategic Financial Management
June 2006 Exam Tips

Section A:

Global Financial Management:

As a core topic this can be expected to arise somewhere on the paper although for the December sitting this did not feature significantly. An overseas NPV perhaps combined with currency hedging or international cash management would seem a likely candidate for the compulsory section. The examiner will expect you to be able to discuss political risks in this context.
International sources of finance tripped up a few students in the June 2005 paper this could also feature as a sub-question.

Interest rate hedging:

This has not arisen as a compulsory question for some time although it did feature in section B in the June 05 paper.

Corporate Restructuring:

This topic is due to be tested in depth again. Management Buyouts did arise as an option question in December 2005 involving a forecasting element. There has not been a reconstruction scheme tested for some time however. Valuations may be incorporated into the calculations.

Section B:

CAPM and Portfolio Theory:

This is tested so often it is notable when it doesn’t arise. Changing business risk featured in December 2005 but there was no Portfolio Theory this is a popular optional question with the examiner.

Adjusted Present Value:

This topic has not arisen for some time and is due to be tested.

Interest Rate/Currency Hedging:

If not in Section A these topics typically feature somewhere on the paper.

Other:

EVA and Free Cash Flow feature regularly as does Black Scholes.

Question 6 is always discursive. Recently it has featured questions on the Global Economic Environment. Capital Structure could feature in Q6 for June 2006 as could Dividend policy which has not been tested for some time.

Useful Articles:

If you want to read around the subject or improve your understanding there are a number of articles on the ACCA website. Scott Goddard (the examiner) has not written anything recently although the following articles are still relevant to the syllabus.

‘A question of values’ by Steve Jay looks at techniques for measuring shareholder wealth.

‘Shareholder Value’ by Kevin Mayes explores this topic further.

‘The Risk and Return Relationship’ by Patrick Lynch looks at CAPM and Portfolio Theory.

‘The Black Scholes Model’ by Patrick Lynch offers further detail and examples on the ‘Greeks’ and Delta hedging.

‘The Greeks Are Coming’ by Steve Jay offers further advice on this area.

Health Warning!

The examiner deliberately trys to avoid question spotting. Just because a question featured last time, doesn’t mean it won’t feature this time. Use the tips as areas to have a good look at but remember that no one knows what is in the exam, apart from the examiner. Your safest bet is to achieve good syllabus coverage in your revision, as the examiner aims to do in the exam.