P7 Advanced Audit and Assurance(INT) (KAPLAN)
• Core areas (as per examiner’s approach article) likely to be examined in every paper:
• Engagement planning and risk assessment (business risk?);
• Engagement procedures (i.e. evidence);
• Ethics and professional issues;
• Engagement reporting (ISA’s 700, 705, 706 in particular);
• Subjects of recent articles yet to be examined:
• Unmodified audit reports (ISA 700) (October ‘11 article).
• ISA 540 Audit of Accounting Estimates.
• Auditing in a Computer Based Environment;
• Significant topics not examined for at least 18 months:
• Laws & regs (ISA 250);
• Fraud
• Money laundering;
• Forensic audit;
• Written representations;
• Quality control (ISA 220);
• Obtaining work;
• Outsourcing/internal audit;
• NOTE :
• Please note; the UK strand is also very likely to include an aspect of Insolvency.
• Please be aware that the whole syllabus is examinable. Whilst the above topics are likely to be examined in forthcoming sittings this does not mean candidates should avoid other areas of the syllabus in their exam preparation.
• The examiner will set 5 questions, which will all have multiple elements, so it is likely that topics other than the ones noted above will be examined in the December 2011 exam.
• The examiner has noted that questions will not be restricted to topic areas (e.g. question 5 will not necessarily be on audit reporting) and instead we should expect to see topics spread across a number of questions.
• In addition, please note the case study questions in section A will have the requirements embedded in the question (see the recent article from the examiner ‘Changes in question style’).
P7 Advanced Audit and Assurance(INT) (BPP)
There are a number of areas that candidates can expect to see in their exam, such as:
•A risk-based planning scenario in the compulsory section
•Questions based on articles published in Student Accountant (although not necessarily from the last six months)
•A number of requirements asking for audit procedures and required evidence in respect of specific financial reporting issues and ISAs
•A practice-based scenario looking at professional, ethical and quality control issues
•A reporting scenario of some sort - probably testing candidates’ knowledge of either the various modifications to the standard audit report or other forms of communication available to the external auditor.
We would also recommend that candidates read the examiner’s report from the June 2011 exam (in the context of the June 2011 exam paper) and keep the following additional issues in mind as part of their revision:
•Don’t forget key brought-forward knowledge from Paper F8 which candidates have traditionally struggled with at P7(audit risk, audit procedures and audit reports).
•Candidates should also not forget about practice-related issues (such as the terms of audit engagements, sampling and documentation) where topics such as quality control procedures, ACCA firm practising requirements and the ethical implications of one firm providing both internal and external audit services could be discussed.
•The correct accounting treatment of complex issues, such as IAS 19 Employee benefits or a newcomer for 2011 IAS 21 The effects of changes in foreign exchange rates or even the associated issues of disclosure (such as IFRS 8 Operating segments or IAS 33
P7 Advanced Audit and Assurance (ICOUNT)
· Audit opinion
· Evidence
· Transnational audits
· Business and financial statement risk
· Ethics
· Quality control
P7 Advanced Audit and Assurance (FIRST INTUITION)
Business risk in a scenario
Identifying ethical and other professional issues in a scenario
Audit reports
Group audits
Money laundering
Forensic audits
Sunday, November 13, 2011
P6 Advanced Taxation
P6 Advanced Taxation(UK) (KAPLAN)
• Overseas aspects of CGT
• Corporation tax groups with consortium relief
• VAT groups
• IHT vs CGT
• Lease vs buy assets
• Employment income: share options and redundancy payments
P6 Advanced Taxation(UK) (BPP)
Section A will involve two case study questions covering around 60-70% of the marks. One will be from a personal tax perspective and the other from a corporate tax perspective. Both questions will cover a range of topics and taxes and will require the construction of professional documents like reports/letters.
Section B will comprise 3 questions making up the balance of the marks.
Topics that may appear this sitting are as follows:
Liquidation
Group/Consortium relief
Close companies
Sole trader/partnerships
Inheritance tax versus capital gains tax
Property income
Enterprise investment scheme/venture capital trust
Termination of employment
Income tax losses
Personal service companies
Land and buildings aspects of VAT
P6 Advanced Taxation (ICOUNT)
· Advising on IHT mitigation with CGT aspects of lifetime gifts.
· Corporation tax groups with VAT groups.
· Sole trader trading losses.
· Employee share schemes.
P6 Advanced Taxation (FIRST INTUITION)
Income tax- overseas aspects of income tax, share option schemes, change of year end, trading losses, partnerships, EIS and VCT relief
Corporation tax – close companies, benefits for participators, non-UK companies trading in the UK, groups and trading losses and groups and gains, including pre-entry elements. Overseas subsidiary or branch.
CGT – PPR and gift reliefs, reorganisations and takeovers
VAST – capital goods scheme, flat rate scheme
Administration – payment of corporation tax in instalments
IHT – related property, BPR
• Overseas aspects of CGT
• Corporation tax groups with consortium relief
• VAT groups
• IHT vs CGT
• Lease vs buy assets
• Employment income: share options and redundancy payments
P6 Advanced Taxation(UK) (BPP)
Section A will involve two case study questions covering around 60-70% of the marks. One will be from a personal tax perspective and the other from a corporate tax perspective. Both questions will cover a range of topics and taxes and will require the construction of professional documents like reports/letters.
Section B will comprise 3 questions making up the balance of the marks.
Topics that may appear this sitting are as follows:
Liquidation
Group/Consortium relief
Close companies
Sole trader/partnerships
Inheritance tax versus capital gains tax
Property income
Enterprise investment scheme/venture capital trust
Termination of employment
Income tax losses
Personal service companies
Land and buildings aspects of VAT
P6 Advanced Taxation (ICOUNT)
· Advising on IHT mitigation with CGT aspects of lifetime gifts.
· Corporation tax groups with VAT groups.
· Sole trader trading losses.
· Employee share schemes.
P6 Advanced Taxation (FIRST INTUITION)
Income tax- overseas aspects of income tax, share option schemes, change of year end, trading losses, partnerships, EIS and VCT relief
Corporation tax – close companies, benefits for participators, non-UK companies trading in the UK, groups and trading losses and groups and gains, including pre-entry elements. Overseas subsidiary or branch.
CGT – PPR and gift reliefs, reorganisations and takeovers
VAST – capital goods scheme, flat rate scheme
Administration – payment of corporation tax in instalments
IHT – related property, BPR
P5 Advanced Performance Management
P5 Advanced Performance Management (KAPLAN)
• CSFs and KPIs
• Strategic analysis tools, i.e. SWOT, benchmarking
• Gap analysis
• External analysis
• Ethics / CSR
• Budget preparation/forecasting
• IT developments
• Performance measurement
• Not-for-profit organisations
• Quality
• League table and targets in the public sector
• Evaluation of financial and non-financial performance (may examine the performance pyramid / prism)
P5 Advanced Performance Management (BPP)
Performance analysis:
The new examiner has indicated that his questions will require more skill in interpreting data and discussing strategies to improve performance rather than performing calculations. You may be asked to analysis performance vs budget to identify underlying problems that a company needs to address. This analysis could include the use of activity-based approaches, learning curves or non-financial performance measures.
‘Beyond budgeting’ is an important area that can be tested either as a discussion or a numerical question.
Performance appraisal requires effective information systems, expect to be asked to identify the key strategic, tactical and operational information requirements of a business.
Risk analysis:
Analysis of the risk of a new proposal could include numerical techniques such as expected values and probabilities; but strategic frameworks such as PEST analysis could feature here.
Strategic performance measures in the private sector:
Divisional performance measurement is another key area; ROI, RI , EVA, NPV or even cost of quality could feature here and transfer pricing could feature as an aspect of these questions.
EVA is especially likely given the recent articles published in this area – make sure you have read them. Modified IRR is new to the syllabus so make sure that you are comfortable with this area.
Reward systems:
HR issues are new to the syllabus from June 2011; the examiner is interested in the impact of reward systems on performance management.
Alternative views of performance measurement:
Questions are commonly set that require a good understanding of the balanced scorecard, the building blocks model and the performance pyramid. Questions will often require you to analyse data that has been collected using one of these models. The balanced scorecard and performance pyramid were tested heavily in June 2011.
Performance hierarchy:
Linking strategic decisions to mission statements or suggesting strategic options using models such as Ansoff’s matrix or the BCG matrix lend themselves to questions containing a mixture of financial and discursive elements that could easily include a simple NPV or profit analysis.
P5 Advanced Performance Management (ICOUNT)
· Quality measurement
· PEST/Porters 5 forces
· Incremental Budgeting
· Public sector performance measurement
· Activity Based Costing
P5 Advanced Performance Management (FIRST INTUITION)
Performance pyramid
Performance management hierarchy
Quality costs
EV and risk
Impact of external factors on performance
Activity based principles
• CSFs and KPIs
• Strategic analysis tools, i.e. SWOT, benchmarking
• Gap analysis
• External analysis
• Ethics / CSR
• Budget preparation/forecasting
• IT developments
• Performance measurement
• Not-for-profit organisations
• Quality
• League table and targets in the public sector
• Evaluation of financial and non-financial performance (may examine the performance pyramid / prism)
P5 Advanced Performance Management (BPP)
Performance analysis:
The new examiner has indicated that his questions will require more skill in interpreting data and discussing strategies to improve performance rather than performing calculations. You may be asked to analysis performance vs budget to identify underlying problems that a company needs to address. This analysis could include the use of activity-based approaches, learning curves or non-financial performance measures.
‘Beyond budgeting’ is an important area that can be tested either as a discussion or a numerical question.
Performance appraisal requires effective information systems, expect to be asked to identify the key strategic, tactical and operational information requirements of a business.
Risk analysis:
Analysis of the risk of a new proposal could include numerical techniques such as expected values and probabilities; but strategic frameworks such as PEST analysis could feature here.
Strategic performance measures in the private sector:
Divisional performance measurement is another key area; ROI, RI , EVA, NPV or even cost of quality could feature here and transfer pricing could feature as an aspect of these questions.
EVA is especially likely given the recent articles published in this area – make sure you have read them. Modified IRR is new to the syllabus so make sure that you are comfortable with this area.
Reward systems:
HR issues are new to the syllabus from June 2011; the examiner is interested in the impact of reward systems on performance management.
Alternative views of performance measurement:
Questions are commonly set that require a good understanding of the balanced scorecard, the building blocks model and the performance pyramid. Questions will often require you to analyse data that has been collected using one of these models. The balanced scorecard and performance pyramid were tested heavily in June 2011.
Performance hierarchy:
Linking strategic decisions to mission statements or suggesting strategic options using models such as Ansoff’s matrix or the BCG matrix lend themselves to questions containing a mixture of financial and discursive elements that could easily include a simple NPV or profit analysis.
P5 Advanced Performance Management (ICOUNT)
· Quality measurement
· PEST/Porters 5 forces
· Incremental Budgeting
· Public sector performance measurement
· Activity Based Costing
P5 Advanced Performance Management (FIRST INTUITION)
Performance pyramid
Performance management hierarchy
Quality costs
EV and risk
Impact of external factors on performance
Activity based principles
P4 Advanced Financial Management
P4 Advanced Financial Management (KAPLAN)
• The examiner has expressed his desire to move the paper away from the highly technical papers set by the previous examiner and to make them more strategic and practical. This has been a feature of the last 2 exam papers in December 2010 and June 2011.
• At the March 2011 ACCA Lecturers’ Conference, the examiner explained that question spotting is dangerous at this level – it is important that students should study all parts of the syllabus in detail.
• However, for December 2011, we would advise students to focus on the following core syllabus topics in particular:
• Net Present Value – including foreign currency cash flows
• Bond yields and bond values
• Risk adjusted WACC
• Discussion of financing options
• Interest rate hedging – options, futures and FRAs
P4 Advanced Financial Management (BPP)
Role and responsibility towards stakeholders:
Ethical issues continue to appear regularly as an optional discussion question, normally with practical financial issues from elsewhere in the syllabus. The discussion question is normally one of the easier optional questions.
Economic value added and ratio analysis can also be used to appraise the performance of a company.
Advanced investment appraisal:
The compulsory question often features an NPV question with an analysis of risk and/or financing; it could easily be set in the context of an overseas investment.
Cost of capital calculations are regularly tested, make sure that you are comfortable adjusting betas for differences in gearing. Real options are also a popular theme.
Acquisitions and mergers:
This exam normally contains a question involving valuations which the examiner sees as a crucial part of the syllabus; valuations questions are also likely to cover strategic and financing issues.
Corporate reconstruction:
A question could also ask you to evaluate a management buy out i.e. whether a business will be worth more if it splits itself up.
Advanced risk management:
We would expect to see a numerical risk management question featuring either interest rate or exchange rate hedging; currency hedging was tested in June 2011.
P4 Advanced Financial Management (ICOUNT)
· Overseas Net Present Value
· Financing incorporating change in Business Risk
· Black Scholes
· Corporate failure
· Interest rate risk management
P4 Advanced Financial Management (FIRST INTUITION)
Q1 International investment appraisal techniques focusing on risk management tools such as value at risk
Q2 Impact of WACC following hedging of interest rate risk
Q3 Company valuation-based scenario, possible MBO finance structure
Q4 Adjusted present value with link to real options and Black Scholes option pricing model
Q5 Written question on credit ratings and difficulties of raising debt finance in current credit markets. This could be linked to current challenges faced by Eurozone governments attempting to raise debt capital amidst falling credit ratings
• The examiner has expressed his desire to move the paper away from the highly technical papers set by the previous examiner and to make them more strategic and practical. This has been a feature of the last 2 exam papers in December 2010 and June 2011.
• At the March 2011 ACCA Lecturers’ Conference, the examiner explained that question spotting is dangerous at this level – it is important that students should study all parts of the syllabus in detail.
• However, for December 2011, we would advise students to focus on the following core syllabus topics in particular:
• Net Present Value – including foreign currency cash flows
• Bond yields and bond values
• Risk adjusted WACC
• Discussion of financing options
• Interest rate hedging – options, futures and FRAs
P4 Advanced Financial Management (BPP)
Role and responsibility towards stakeholders:
Ethical issues continue to appear regularly as an optional discussion question, normally with practical financial issues from elsewhere in the syllabus. The discussion question is normally one of the easier optional questions.
Economic value added and ratio analysis can also be used to appraise the performance of a company.
Advanced investment appraisal:
The compulsory question often features an NPV question with an analysis of risk and/or financing; it could easily be set in the context of an overseas investment.
Cost of capital calculations are regularly tested, make sure that you are comfortable adjusting betas for differences in gearing. Real options are also a popular theme.
Acquisitions and mergers:
This exam normally contains a question involving valuations which the examiner sees as a crucial part of the syllabus; valuations questions are also likely to cover strategic and financing issues.
Corporate reconstruction:
A question could also ask you to evaluate a management buy out i.e. whether a business will be worth more if it splits itself up.
Advanced risk management:
We would expect to see a numerical risk management question featuring either interest rate or exchange rate hedging; currency hedging was tested in June 2011.
P4 Advanced Financial Management (ICOUNT)
· Overseas Net Present Value
· Financing incorporating change in Business Risk
· Black Scholes
· Corporate failure
· Interest rate risk management
P4 Advanced Financial Management (FIRST INTUITION)
Q1 International investment appraisal techniques focusing on risk management tools such as value at risk
Q2 Impact of WACC following hedging of interest rate risk
Q3 Company valuation-based scenario, possible MBO finance structure
Q4 Adjusted present value with link to real options and Black Scholes option pricing model
Q5 Written question on credit ratings and difficulties of raising debt finance in current credit markets. This could be linked to current challenges faced by Eurozone governments attempting to raise debt capital amidst falling credit ratings
P3 Business Analysis
P3 Business Analysis (KAPLAN)
• Section A
Question 1 may well be less strategic than we have seen in the past. It could feature a large element of project management for example. But it should have some element of strategic analysis, possibly a SWOT. Project management links well to other areas of the syllabus such as strategy and people and process redesign.
• Section B
• This will combine all elements of the syllabus (strategic analysis, choice and implementation).
• Pricing
• Project appraisal
• Strategy and people
• Change management
• The only chapter from Kaplan’s official study text that has not yet been examined in any detail is the chapter covering finance, so students should ensure that they are comfortable with this chapter as it may appear as part of an option question.
P3 Business Analysis (BPP)
Important areas to cover:
Strategy models
Analysis of the environment and/or internal factors has featured in most exams. Key models include PESTEL, Porter’s Five Forces and the value chain. Expect something on forecasting soon.
Evaluation of strategic options is usually tested one way or another (although wasn’t in the last paper).SAF can be a useful framework to generate ideas but don’t feel you need to follow it slavishly.
Strategic action (largely change management and organisational configuration) is often overlooked, but has featured in the last two papers, emphasising the need for good syllabus coverage.
Business Process Change
A popular area, which may be based around models such as Harmon, or completely unstructured, describing a process and asking for improvements. Expect to see some numbers coming in to questions in this area to help with decisions such as automation and outsourcing.
Information Technology
A pervasive theme in many questions. Make sure you are comfortable with some of the more important recent concepts in technology such as cloud computing, viral marketing and new business models.
Project Management
This is a major topic and was not tested in the last sitting so may well be this time. Questions could well focus on analysis and realisation of benefits and again are likely to include a numerical element.
Financial Analysis
Lots of management accounting knowledge from F5 is assumed knowledge here, including budgeting, variance analysis and relevant costing. The lessons from Q1 in the last paper are that, 1) this may be in the compulsory question and 2) you may not be specifically told which techniques to use, but have to work it out from the data given.
People
This is most likely to be tested in conjunction with one of the other topics, as it was in the last paper.
Most importantly…
Knowledge alone will not get you close to a pass on this paper. You need to be able to apply your knowledge to specific situations. Practice this using past questions and stories in the press or on the web as often as you can and you will be ready for whatever the exam throws at you!
P3 Business Analysis (ICOUNT)
· Project management skills
· Internal resources and competences
· Supply chain management
· Decision tree
· Budgeting
· Change management
P3 Business Analysis (FIRST INTUITION)
Section A
Environment analysis, people with financial analysis
Section B
Project management
Strategic action
Information technology – pricing strategy
• Section A
Question 1 may well be less strategic than we have seen in the past. It could feature a large element of project management for example. But it should have some element of strategic analysis, possibly a SWOT. Project management links well to other areas of the syllabus such as strategy and people and process redesign.
• Section B
• This will combine all elements of the syllabus (strategic analysis, choice and implementation).
• Pricing
• Project appraisal
• Strategy and people
• Change management
• The only chapter from Kaplan’s official study text that has not yet been examined in any detail is the chapter covering finance, so students should ensure that they are comfortable with this chapter as it may appear as part of an option question.
P3 Business Analysis (BPP)
Important areas to cover:
Strategy models
Analysis of the environment and/or internal factors has featured in most exams. Key models include PESTEL, Porter’s Five Forces and the value chain. Expect something on forecasting soon.
Evaluation of strategic options is usually tested one way or another (although wasn’t in the last paper).SAF can be a useful framework to generate ideas but don’t feel you need to follow it slavishly.
Strategic action (largely change management and organisational configuration) is often overlooked, but has featured in the last two papers, emphasising the need for good syllabus coverage.
Business Process Change
A popular area, which may be based around models such as Harmon, or completely unstructured, describing a process and asking for improvements. Expect to see some numbers coming in to questions in this area to help with decisions such as automation and outsourcing.
Information Technology
A pervasive theme in many questions. Make sure you are comfortable with some of the more important recent concepts in technology such as cloud computing, viral marketing and new business models.
Project Management
This is a major topic and was not tested in the last sitting so may well be this time. Questions could well focus on analysis and realisation of benefits and again are likely to include a numerical element.
Financial Analysis
Lots of management accounting knowledge from F5 is assumed knowledge here, including budgeting, variance analysis and relevant costing. The lessons from Q1 in the last paper are that, 1) this may be in the compulsory question and 2) you may not be specifically told which techniques to use, but have to work it out from the data given.
People
This is most likely to be tested in conjunction with one of the other topics, as it was in the last paper.
Most importantly…
Knowledge alone will not get you close to a pass on this paper. You need to be able to apply your knowledge to specific situations. Practice this using past questions and stories in the press or on the web as often as you can and you will be ready for whatever the exam throws at you!
P3 Business Analysis (ICOUNT)
· Project management skills
· Internal resources and competences
· Supply chain management
· Decision tree
· Budgeting
· Change management
P3 Business Analysis (FIRST INTUITION)
Section A
Environment analysis, people with financial analysis
Section B
Project management
Strategic action
Information technology – pricing strategy
P2 Corporate Reporting
P2 Corporate Reporting(INT)(KAPLAN)
Group statement of financial position
Retirement benefits
Financial instruments
Non-current assets & assets held for sale
Deferred tax
Revenue recognition
Entity reconstructions
Conceptual framework / Fair Value Measurement
Management Commentary
P2 Corporate Reporting(INT) (BPP)
Q1: group SOFP and/or SOCI including discontinued activities, acquisitions and disposals or a statement of cash flows, plus adjustments on other syllabus areas such as financial instruments, pensions, share-based payment and impairments. Written part on a linked accounting adjustment and social/ethical/moral aspects of corporate reporting.
Q2 & Q3:2 case study questions, one following a theme such as non-current assets, deferred tax, foreign currency, financial instruments, pensions, share-based payment, the other an industry-based question testing a range of standards such as accounting policies and the framework, leases, grants, IFRS for SMEs, reorganisations, provisions, events after the reporting period and related parties.
Q4:discussion question e.g. revenue recognition, fair values, management commentary, improvements in performance measurement, leasing, including an application part with some computations.
P2 Corporate Reporting (ICOUNT)
· Consolidation Statement of Comprehensive Income (with complex groups)
· Consolidated Statement of Cashflow
· Accounting treatment for Pension / Share based payments.
· Current developments within IFRS'/IAS'
· Financial instruments at FVTPL and amortised cost.
P2 Corporate Reporting (FIRST INTUITION)
Q1 Group question on disposals, piecemeal acquisitions
Ethics
Revenue recognition – current issues
Deferred tax
Share based payments
Related parties
Group statement of financial position
Retirement benefits
Financial instruments
Non-current assets & assets held for sale
Deferred tax
Revenue recognition
Entity reconstructions
Conceptual framework / Fair Value Measurement
Management Commentary
P2 Corporate Reporting(INT) (BPP)
Q1: group SOFP and/or SOCI including discontinued activities, acquisitions and disposals or a statement of cash flows, plus adjustments on other syllabus areas such as financial instruments, pensions, share-based payment and impairments. Written part on a linked accounting adjustment and social/ethical/moral aspects of corporate reporting.
Q2 & Q3:2 case study questions, one following a theme such as non-current assets, deferred tax, foreign currency, financial instruments, pensions, share-based payment, the other an industry-based question testing a range of standards such as accounting policies and the framework, leases, grants, IFRS for SMEs, reorganisations, provisions, events after the reporting period and related parties.
Q4:discussion question e.g. revenue recognition, fair values, management commentary, improvements in performance measurement, leasing, including an application part with some computations.
P2 Corporate Reporting (ICOUNT)
· Consolidation Statement of Comprehensive Income (with complex groups)
· Consolidated Statement of Cashflow
· Accounting treatment for Pension / Share based payments.
· Current developments within IFRS'/IAS'
· Financial instruments at FVTPL and amortised cost.
P2 Corporate Reporting (FIRST INTUITION)
Q1 Group question on disposals, piecemeal acquisitions
Ethics
Revenue recognition – current issues
Deferred tax
Share based payments
Related parties
P1 Governance, Risk & Ethics
Corporate governance: external actors – stock exchanges & Company secretary
‘Sound system’ of Internal controls
Normative / instrumental stakeholder views
Deontological and Teleological
Ethical Decision making – Tucker/AAA
CSR / corporate citizenship
Remuneration committee
Risk perception and ALARP
Role of Chairman and/or NEDs
Directors Performance Evaluation
P1 Governance, Risk & Ethics (BPP)
In the long 50 mark scenario question you can expect to see all areas of the syllabus being tested. For this reason you should ensure that you have not neglected any of the broad syllabus areas of governance, risk and ethics. The topic of risk can be further subdivided between risk and control.
Some good areas of governance to look at are agency, stakeholders and directors’ remuneration.
Don’t neglect internal control reporting.
Ethical theories get tested regularly, and professional codes of ethics are an important part of the syllabus. The examiner did not touch environmental issues in the June exam – you should ensure you brush up on these too.
P1 Governance, Risk & Ethics (ICOUNT)
· Transaction cost versus agency theories
· Board committees
· Risk management and the role of internal audit
· Controlling organisational risks
· Absolutist versus relativist ethical theories
· Professional ethics
P1 Governance, Risk & Ethics (FIRST INTUITION)
50 mark scenario question, to include: TARA risk model, ethics, absolutist v relativism, chairman and CEO powers need to be separate, also corporate social responsibility, ISO 14001
Optional questions to include: importance of internal control, NEDs and remuneration committee, business risks, Grays Owens and adams
‘Sound system’ of Internal controls
Normative / instrumental stakeholder views
Deontological and Teleological
Ethical Decision making – Tucker/AAA
CSR / corporate citizenship
Remuneration committee
Risk perception and ALARP
Role of Chairman and/or NEDs
Directors Performance Evaluation
P1 Governance, Risk & Ethics (BPP)
In the long 50 mark scenario question you can expect to see all areas of the syllabus being tested. For this reason you should ensure that you have not neglected any of the broad syllabus areas of governance, risk and ethics. The topic of risk can be further subdivided between risk and control.
Some good areas of governance to look at are agency, stakeholders and directors’ remuneration.
Don’t neglect internal control reporting.
Ethical theories get tested regularly, and professional codes of ethics are an important part of the syllabus. The examiner did not touch environmental issues in the June exam – you should ensure you brush up on these too.
P1 Governance, Risk & Ethics (ICOUNT)
· Transaction cost versus agency theories
· Board committees
· Risk management and the role of internal audit
· Controlling organisational risks
· Absolutist versus relativist ethical theories
· Professional ethics
P1 Governance, Risk & Ethics (FIRST INTUITION)
50 mark scenario question, to include: TARA risk model, ethics, absolutist v relativism, chairman and CEO powers need to be separate, also corporate social responsibility, ISO 14001
Optional questions to include: importance of internal control, NEDs and remuneration committee, business risks, Grays Owens and adams
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