P1
*♥ P1 All study material Links Free ♥*
*♥ P1 GR&E Governance, Risk and Ethics Video Lectures ♥*
*♥ P1 Acowtancy Notes 2017 Free ♥*
*♥ ACCA P1 KeyPoints Summaries from 2009 2015 zip | WeACCA ♥*
♥ ACCA P1 GR&E Governance, Risk and Ethics Kaplan Mock 2017 Free ♥
*♥Star Gold Academy Free ACCA Study Material ♥*
*♥ P1 Summary+ Revision notes ♥*
https://weacca.blogspot.com/p/acca-summaryrevison-notes-f1-p7.html
· https://weacca.blogspot.com/p/acca-summaryrevison-notes-f1-p7.html
· https://weacca.blogspot.com/p/blog-page_29.html
· https://weacca.blogspot.com/p/free-kaplan-books-kits-httpswww.html
· https://weacca.blogspot.com/p/free-lsbf.html
· https://weacca.blogspot.com/p/bpp-study-text-2017.html
· https://weacca.blogspot.com/p/blog-page_18.html
· https://weacca.blogspot.com/p/acca-free-video-lectures-f1-to-p7.html
· https://weacca.blogspot.com/p/acca-lsbf-lass-notes.html
*One by one visit these links. You will get what you want every thing P1 related*
*★•.•´¯`•.•★*
P2
*♥ P2 All study material Links Free ♥*
*♥ P2 CR Corporate Reporting Video Lectures♥*
*♥ P2 Acowtancy Notes 2017 Free ♥*
*💜 ACCA P2 Acowtancy Video Lectures Free 2016 💜*
http://weacca.blogspot.com/2017/04/acca-p2-acowtancy-lectures-2016.html
http://weacca.blogspot.com/2017/04/acca-p2-acowtancy-lectures-2016.html
♥ ACCA P2 CR Corporate Reporting Kaplan Mock 2017 Free ♥
*♥Star Gold Academy Free ACCA Study Material ♥*
*♥ P2 Summary+ Revision notes ♥*
· https://weacca.blogspot.com/p/acca-summaryrevison-notes-f1-p7.html
· https://weacca.blogspot.com/p/blog-page_29.html
· https://weacca.blogspot.com/p/free-kaplan-books-kits-httpswww.html
· https://weacca.blogspot.com/p/free-lsbf.html
· https://weacca.blogspot.com/p/bpp-study-text-2017.html
· https://weacca.blogspot.com/p/blog-page_18.html
· https://weacca.blogspot.com/p/acca-free-video-lectures-f1-to-p7.html
· https://weacca.blogspot.com/p/acca-lsbf-lass-notes.html
https://weacca.blogspot.com/p/free-kaplan-practice-mocks-material.html
*♥My Past Paper Folder with Old One♥*
https://www.mediafire.com/folder/ccqz5as3x4ir7/Past%20Papers
https://www.mediafire.com/folder/ccqz5as3x4ir7/Past%20Papers
*One by one visit these links. You will get what you want every thing P2 related*
*★•.•´¯`•.•★*
P3
*♥ P3 All study material Links Free ♥*
*♥ P3 BA Business Analysis Video Lectures♥*
*♥ P3 Acowtancy Notes 2017 Free ♥*
♥ ACCA P3 BA Business Analysis Kaplan Mock 2017 Free ♥
https://weacca.blogspot.com/2017/04/p3-kaplan-mock-upto-june-2017-free.html
*♥Star Gold Academy Free ACCA Study Material ♥*
*♥ P3 Summary+ Revision notes ♥*
*♥My Past Paper Folder with Old One♥*https://www.mediafire.com/folder/ccqz5as3x4ir7/Past%20Papers
https://weacca.blogspot.com/p/free-kaplan-practice-mocks-material.html
*♥My Past Paper Folder with Old One♥*
https://www.mediafire.com/folder/ccqz5as3x4ir7/Past%20Papers
https://www.mediafire.com/folder/ccqz5as3x4ir7/Past%20Papers
*One by one visit these links. You will get what you want every thing P3 related*
*★•.•´¯`•.•★*
P4
*♥ P4 All study material Links Free ♥*
*♥ P4 AFM Advanced Financial Management Video Lectures♥*
*♥ ACCA P4 AFM Advanced Financial Management Kaplan Mock 2017 Free ♥*
https://weacca.blogspot.com/2017/04/p4-kaplan-mock-upto-june-2017-free.html
*♥Star Gold Academy Free ACCA Study Material ♥*
https://weacca.blogspot.com/2017/04/star-gold-academy-acca-study-material.html
*♥ P4 Summary+ Revision notes ♥*
https://weacca.blogspot.com/p/acca-summaryrevison-notes-f1-p7.html
*♥My Past Paper Folder with Old One♥*https://www.mediafire.com/folder/ccqz5as3x4ir7/Past%20Papers
*One by one visit these links. You will get what you want every thing P4 related*
es
examination.
It examines professional competences within the
corporate reporting environment.
Students will be examined on concepts, theories,
and principles, and on their ability to question and
comment on proposed accounting treatments.
Students should be capable of relating professional
issues to relevant concepts and practical situations.
The evaluation of alternative accounting practices
and the identification and prioritisation of issues will
be a key element of the paper. Professional and
ethical judgement will need to be exercised,
together with the integration of technical knowledge
when addressing corporate reporting issues in a
business context.
Global issues will be addressed via the current
issues questions on the paper. Students will be
required to adopt either a stakeholder or an external
focus in answering questions and to demonstrate
personal skills such as problem solving, dealing with
information and decision making.
The paper also deals with specific professional
knowledge appropriate to the preparation and
presentation of consolidated and other financial
statements from accounting data, to conform with
accounting standards.
The paper will comprise two sections.
Section A Compulsory question 50 marks
Section B 2 from 3 questions of
25 marks each 50 marks
100 marks
Section A will consist of one scenario based
question worth 50 marks. It will deal with the
preparation of consolidated financial statements
including group statements of cash flows and with
issues in financial reporting.
Students will be required to answer two out of three
questions in Section B, which will normally
comprise two questions which will be scenario or
case-study based and one essay question which
may have some computational element. Section B
could deal with any aspects of the syllabus.
New accounting standards will feature prominently
in this section on initial introduction
© ACCA 2017-18 All rights reserved.
8
Study Guide
A THE PROFESSIONAL AND ETHICAL DUTIES
OF THE ACCOUNTANT
1. Professional behaviour and compliance with
accounting standards
a) Appraise and discuss the ethical and
professional issues in advising on corporate
reporting.
[3]
b) Assess the relevance and importance of ethical
and professional issues in complying with
accounting standards.
[3]
2. Ethical requirements of corporate reporting and
the consequences of unethical behaviour
a) Appraise the potential ethical implications of
professional and managerial decisions in the
preparation of corporate reports.
[3]
b) Assess the consequences of not upholding
ethical principles in the preparation of
corporate reports.
[3]
3. Social Responsibility
a) Discuss the increased demand for transparency
in corporate reports, and the emergence of
non-financial reporting standards.
[3]
b) Discuss the progress towards a framework for
integrated reporting.
[3]
B THE FINANCIAL REPORTING FRAMEWORK
1. The applications, strengths and weaknesses of
an accounting framework
a) Evaluate the valuation models adopted by
standard setters.
[3]
b) Discuss the use of an accounting framework in
underpinning the production of accounting
standards.
[3]
c) Assess the success of such a framework in
introducing rigorous and consistent accounting
standards.
[3]
2. Critical evaluation of principles and practices
a) Identify the relationship between accounting
theory and practice.
[2]
b) Critically evaluate accounting principles and
practices used in corporate reporting.
[3]
C REPORTING THE FINANCIAL PERFORMANCE
OF ENTITIES
1. Performance reporting
a) Prepare reports relating to corporate
performance for external stakeholders.
[3]
b) Discuss and apply the criteria that must be met
before an entity can apply the revenue
recognition model to that contract.
c) Discuss and apply the five-step model which
relates to revenue earned from a contract with
a customer
2. Non-current assets
a) Apply and discuss the timing of the recognition
of non-current assets and the determination of
their carrying amounts including impairments
and revaluations.
[3]
b) Apply and discuss the treatment of non-current
assets held for sale.
[3]
c) Apply and discuss the accounting treatment of
investment properties including classification,
recognition and measurement issues.
[3]
d) Apply and discuss the accounting treatment of
intangible assets including the criteria for
recognition and measurement subsequent to
acquisition and classification.
[3]
3. Financial Instruments
a) Apply and discuss the recognition and de-recognition of financial assets and financial
liabilities.
[2]
b) Apply and discuss the classification of financial
assets and financial liabilities and their
measurement.
[2]
© ACCA 2017-18 All rights reserved.
9
c) Apply and discuss the treatment of gains and
losses arising on financial assets and financial
liabilities.
[2]
d) Apply and discuss the treatment of the
expected loss impairment model.
[2]
e) Account for derivative financial instruments,
and simple embedded derivatives.
[2]
f) Outline the principles of hedge accounting and
account for fair value hedges and cash flow
hedges including hedge effectiveness.
[2]
4. Leases
a) Apply and discuss the accounting for leases by
lessees including the measurement of the right
of use asset and liability
b. Apply and discuss the accounting for leases by
lessors
c Apply and discuss the circumstances where
there may be re-measurement of the lease
liability
d. Apply and discuss the reasons behind the
separation of the components of a lease
contract into lease and no lease elements
e Discuss the recognition exemptions under the
current leasing standard
f) Account for and discuss sale and leaseback
transactions.
[3]
5. Segment Reporting
a) Determine the nature and extent of reportable
segments.
[3]
b) Specify and discuss the nature of segment
information to be disclosed.
[3]
6. Employee Benefits
a) Apply and discuss the accounting treatment of
short term and long term employee benefits
and defined contribution and defined benefit
plans.
[3]
b) Account for gains and losses on settlements
and curtailments.
[2]
c) Account for the “Asset Ceiling” test and the
reporting of actuarial gains and losses.
[2]
7. Income taxes
a) Apply and discuss the recognition and
measurement of deferred tax liabilities and
deferred tax assets.
[3]
b) Determine the recognition of tax expense or
income and its inclusion in the financial
statements.
[3]
8. Provisions, contingencies and events after the
reporting date
a) Apply and discuss the recognition, de-recognition and measurement of provisions,
contingent liabilities and contingent assets
including environmental provisions and
restructuring provisions.
[3]
b) Apply and discuss the accounting for events
after the reporting date.
[3]
c) Determine and report going concern issues
arising after the reporting date.
[3]
9. Related parties
a) Determine the parties considered to be related
to an entity.
[3]
b) Identify the implications of related party
relationships and the need for disclosure.
[3]
10. Share based payment
a) Apply and discuss the recognition and
measurement criteria for share-based payment
transactions.
[3]
b) Account for modifications, cancellations and
settlements of share based payment
transactions.
[2]
11. Reporting requirements of small and medium-sized entities (SMEs)
a) Discuss the accounting treatments not
allowable under the IFRS for SMEs including
the revaluation model for certain assets
[3]
b) Discuss and apply the simplifications
introduced by the IFRS for SMEs including
accounting for goodwill and intangible assets,
financial instruments, defined benefit schemes,
© ACCA 2017-18 All rights reserved.
10
exchange differences and associates and joint
ventures.
[3]
D FINANCIAL STATEMENTS OF GROUPS OF
ENTITIES
1. Group accounting including statements of cash
flows
a) Apply the method of accounting for business
combinations including complex group
structures.
[3]
b) Apply the principles in determining the cost of
a business combination.
[3]
c) Apply the recognition and measurement criteria
for identifiable acquired assets and liabilities
and goodwill including step acquisitions.
[3]
d) Apply and discuss the criteria used to identify a
subsidiary and an associate.
[3]
e) Determine and apply appropriate procedures to
be used in preparing group financial
statements.
[3]
f) Identify and outline:
- the circumstances in which a group is
required to prepare consolidated financial
statements.
[2]
- the circumstances when a group may claim
and exemption from the preparation of
consolidated financial statements.
[2]
- why directors may not wish to consolidate a
subsidiary and where this is permitted.
[2]
g) Apply the equity method of accounting for
associates.
[3]
h) Outline and apply the key definitions and
accounting methods which relate to interests in
joint arrangements.
[3]
i) Prepare and discuss group statements of cash
flows.
[3]
2. Continuing and discontinued interests
a) Prepare group financial statements where
activities have been discontinued, or have been
acquired or disposed of in the period.
[3]
b) Apply and discuss the treatment of a subsidiary
which has been acquired exclusively with a
view to subsequent disposal.
[3]
3. Changes in group structures
a) Discuss the reasons behind a group
reorganisation.
[3]
b) Evaluate and assess the principal terms of a
proposed group reorganisation.
[3]
4. Foreign transactions and entities
a) Outline and apply the translation of foreign
currency amounts and transactions into the
functional currency and the presentational
currency.
[3]
b) Account for the consolidation of foreign
operations and their disposal.
[2]
E SPECIALISED ENTITIES AND SPECIALISED
TRANSACTIONS
1. Financial reporting in specialised, not-for-profit
and public sector entities
a) Apply knowledge from the syllabus to
straightforward transactions and events arising
in specialised, not-for-profit, and public sector
entities.
[3]
2. Entity reconstructions
a) Identify when an entity may no longer be
viewed as a going concern or uncertainty exists
surrounding the going concern status.
[2]
b) Identify and outline the circumstances in which
a reconstruction would be an appropriate
alternative to a company liquidation.
[2]
c) Outline the appropriate accounting treatment
required relating to reconstructions.
[2]
F IMPLICATIONS OF CHANGES IN
ACCOUNTING REGULATION ON FINANCIAL
REPORTING
1. The effect of changes in accounting standards
on accounting systems
© ACCA 2017-18 All rights reserved.
11
a) Apply and discuss the accounting implications
of the first time adoption of a body of new
accounting standards.
[3]
2. Proposed changes to accounting standards
a) Identify issues and deficiencies which have led
to a proposed change to an accounting
standard.
[2]
G THE APPRAISAL OF FINANCIAL
PERFORMANCE AND POSITION OF ENTITIES
1. The creation of suitable accounting policies
a) Develop accounting policies for an entity which
meet the entity’s reporting requirements.
[3]
b) Identify accounting treatments adopted in
financial statements and assess their suitability
and acceptability.
[3]
2. Analysis and interpretation of financial
information and measurement of performance
a) Select and calculate relevant indicators of
financial and non-financial performance.
[3]
b) Identify and evaluate significant features and
issues in financial statements.
[3]
c) Highlight inconsistencies in financial
information through analysis and application of
knowledge.
[3]
d) Make inferences from the analysis of
information taking into account the limitation
of the information, the analytical methods used
and the business environment in which the
entity operates.
[3]
H CURRENT DEVELOPMENTS
1. Environmental and social reporting
a) Appraise the impact of environmental, social,
and ethical factors on performance
measurement.
[3]
b) Evaluate current reporting requirements in the
area including the development of integrated
reporting.
[3]
c) Discuss why entities might include disclosures
relating to the environment and society.
[3]
2. Convergence between national and
international reporting standards
a) Evaluate the implications of worldwide
convergence with International Financial
Reporting Standards.
[3]
b) Discuss the influence of national regulators on
international financial reporting.
[2]
3. Current reporting issues
a) Discuss current issues in corporate
reporting, including:
i. recent IFRSs
ii. practice and regulatory issues
iii. proposed changes to IFRS
iv. problems with extant standards
[3]
© ACCA 2017-18 All rights reserved.
12
NOTE OF SIGNIFICANT CHANGES TO STUDYGUIDE PAPER P2 IN
Study Guide
A ROLE OF THE SENIOR FINANCIAL ADVISER
IN THE MULTINATIONAL ORGANISATION
1. The role and responsibility of senior financial
executive/advisor
a) Develop strategies for the achievement of the
organisational goals in line with its agreed
policy framework.
[3]
b) Recommend strategies for the management of
the financial resources of the organisation such
that they are utilised in an efficient, effective
and transparent way.
[3]
c) Advise the board of directors or management of
the organisation in setting the financial goals of
the business and in its financial policy
development with particular reference to:
[3]
i) Investment selection and capital resource
allocation
ii) Minimising the cost of capital
iii) Distribution and retention policy
iv) Communicating financial policy and
corporate goals to internal and external
stakeholders
v) Financial planning and control
vi) The management of risk.
2. Financial strategy formulation
a) Assess organisational performance using
methods such as ratios and trends
[3]
b) Recommend the optimum capital mix and
structure within a specified business context
and capital asset structure.
[3]
c) Recommend appropriate distribution and
retention policy.
[3]
d) Explain the theoretical and practical rationale
for the management of risk.
[3]
e) Assess the organisation’s exposure to business
and financial risk including operational,
reputational, political, economic, regulatory
and fiscal risk.
[3]
f) Develop a framework for risk management,
comparing and contrasting risk mitigation,
hedging and diversification strategies.
[3]
g) Establish capital investment monitoring and
risk management systems.
[3]
h) Advise on the impact of behavioural finance on
financial strategies / securities prices and why
they may not follow the conventional financial
theories.
[3]
3. Ethical and governance issues
a) Assess the ethical dimension within business
issues and decisions and advise on best
practice in the financial management of the
organisation.
[3]
b) Demonstrate an understanding of the
interconnectedness of the ethics of good
business practice between all of the functional
areas of the organisation.
[2]
c) Recommend, within specified problem
domains, appropriate strategies for the
resolution of stakeholder conflict and advise on
alternative approaches that may be adopted.
[3]
d) Recommend an ethical framework for the
development of an organisation’s financial
policies and a system for the assessment of its
ethical impact upon the financial management
of the organisation.
[3]
e) Explore the areas within the ethical framework
of the organisation which may be undermined
by agency effects and/or stakeholder conflicts
and establish strategies for dealing with
them.
[3]
f) Establish an ethical financial policy for the
financial management of the organisation
which is grounded in good governance, the
highest standards of probity and is fully aligned
with the ethical principles of the Association.
[3]
g) Assess the impact on sustainability and
environmental issues arising from alternative
organisational business and financial decisions.
[3]
h) Assess and advise on the impact of investment
and financing strategies and decisions on the
© ACCA 2017-2018 All rights reserved.
9
organisation’s stakeholders, from an integrated
reporting and governance perspective
[2]
4. Management of international trade and
finance
a) Advise on the theory and practice of free trade
and the management of barriers to trade.
[3]
b) Demonstrate an up to date understanding of
the major trade agreements and common
markets and, on the basis of contemporary
circumstances, advise on their policies and
strategic implications for a given business.
[3]
c) Discuss how the actions of the World Trade
Organisation, the International Monetary Fund,
The World Bank and Central Banks can affect
a multinational organisation.
[2]
d) Discuss the role of international financial
institutions within the context of a globalised
economy, with particular attention to (the Fed,
Bank of England, European Central Bank and
the Bank of Japan).
[2]
e) Discuss the role of the international financial
markets with respect to the management of
global debt, the financial development of the
emerging economies and the maintenance of
global financial stability.
[2]
f) Discuss the significance to the organisation, of
latest developments in the world financial
markets such as the causes and impact of the
recent financial crisis; growth and impact of
dark pool trading systems; the removal of
barriers to the free movement of capital; and
the international regulations on money
laundering.
[2]
g) Demonstrate an awareness of new
developments in the macroeconomic
environment, assessing their impact upon the
organisation, and advising on the appropriate
response to those developments both internally
and externally.
[2]
5. Strategic business and financial planning for
multinationals
a) Advise on the development of a financial
planning framework for a multinational
organisation taking into account:
[3]
i) Compliance with national regulatory
requirements (for example the London
Stock Exchange admission requirements)
ii) The mobility of capital across borders and
national limitations on remittances and
transfer pricing
iii) The pattern of economic and other risk
exposures in the different national markets
iv) Agency issues in the central coordination of
overseas operations and the balancing of
local financial autonomy with effective
central control.
6. Dividend policy in multinationals and transfer
pricing
a) Determine a corporation’s dividend capacity
and its policy given
:
[3]
i) The corporation’s short- and long-term
reinvestment strategy
ii) The impact of capital reconstruction
programmes such as share repurchase
agreements and new capital issues on free
cash flow to equity.
iii) The availability and timing of central
remittances
iv) The corporate tax regime within the host
jurisdiction.
b) Advise, in the context of a specified capital
investment programme, on an organisation’s
current and projected dividend capacity.
[3]
c) Develop organisational policy on the transfer
pricing of goods and services across
international borders and be able to determine
the most appropriate transfer pricing strategy in
a given situation reflecting local regulations and
tax regimes.
[3]
© ACCA 2017-2018 All rights reserved.
10
B ADVANCED INVESTMENT APPRAISAL
1. Discounted cash flow techniques
a) Evaluate the potential value added to an
organisation arising from a specified capital
investment project or portfolio using the net
present value (NPV) model.
[3]
Project modelling should include explicit
treatment and discussion of:
i) Inflation and specific price variation
ii) Taxation including tax allowable
depreciation and tax exhaustion
iii) Single period and multi-period capital
rationing. Multi-period capital rationing to
include the formulation of programming
methods and the interpretation of their
output
iv) Probability analysis and sensitivity analysis
when adjusting for risk and uncertainty in
investment appraisal
v) Risk adjusted discount rates
vi) Project duration as a measure of risk.
b) Outline the application of Monte Carlo
simulation to investment appraisal.
[2]
Candidates will not be expected to undertake
simulations in an examination context but will
be expected to demonstrate an understanding
of:
i) The significance of the simulation output
and the assessment of the likelihood of
project success
ii) The measurement and interpretation of
project value at risk.
c) Establish the potential economic return (using
internal rate of return (IRR) and modified
internal rate of return) and advise on a
project’s return margin. Discuss the relative
merits of NPV and IRR.
[3]
2. Application of option pricing theory in
investment decisions
a) Apply the Black-Scholes Option Pricing (BSOP)
model to financial product valuation and to
asset valuation:
[3]
i) Determine and discuss, using published
data, the five principal drivers of option
value (value of the underlying, exercise
price, time to expiry, volatility and the risk-free rate)
ii) Discuss the underlying assumptions,
structure, application and limitations of the
BSOP model.
b) Evaluate embedded real options within a
project, classifying them into one of the real
option archetypes.
[3]
c) Assess, calculate and advise on the value of
options to delay, expand, redeploy and
withdraw using the BSOP model.
[3]
3. Impact of financing on investment decisions
and adjusted present values
a) Identify and assess the appropriateness of the
range of sources of finance available to an
organisation including equity, debt, hybrids,
lease finance, venture capital, business angel
finance, private equity, asset securitisation and
sale and Islamic finance. Including assessment
on the financial position, financial risk and the
value of an organisation.
[3]
b) Discuss the role of, and developments in,
Islamic financing as a growing source of
finance for organisations; explaining the
rationale for its use, and identifying its benefits
and deficiencies.
[2]
c) Calculate the cost of capital of an organisation,
including the cost of equity and cost of debt,
based on the range of equity and debt sources
of finance. Discuss the appropriateness of
using the cost of capital to establish project
and organisational value, and discuss its
relationship to such value.
[3]
d) Calculate and evaluate project specific cost of
equity and cost of capital, including their
impact on the overall cost of capital of an
organisation. Demonstrate detailed knowledge
of business and financial risk, the capital asset
pricing model and the relationship between
equity and asset betas.
[3]
e) Assess an organisation’s debt exposure to
interest rate changes using the simple
Macaulay duration and modified duration
methods.
[3]
f) Discuss the benefits and limitations of duration
including the impact of convexity.
[3]
© ACCA 2017-2018 All rights reserved.
11
g) Assess the organisation’s exposure to credit
risk, including:
[3]
i) Explain the role of, and the risk assessment
models used by the principal rating
agencies
ii) Estimate the likely credit spread over risk
free
iii) Estimate the organisation’s current cost of
debt capital using the appropriate term
structure of interest rates and the credit
spread.
h) Assess the impact of financing and capital
structure upon the organisation with respect
to:
[3]
i) Modigliani and Miller propositions, before
and after tax
ii) Static trade-off theory
iii) Pecking order propositions
iv) Agency effects.
i) Apply the adjusted present value technique to
the appraisal of investment decisions that
entail significant alterations in the financial
structure of the organisation, including their
fiscal and transactions cost implications.
[3]
j) Assess the impact of a significant capital
investment project upon the reported financial
position and performance of the organisation
taking into account alternative financing
strategies.
[3]
4. Valuation and the use of free cash flows
a) Apply asset based, income based and cash
flow based models to value equity. Apply
appropriate models, including term structure of
interest rates, the yield curve and credit
spreads, to value corporate debt.
[3]
b) Forecast an organisation’s free cash flow and
its free cash flow to equity (pre and post
capital reinvestment).
[3]
c) Advise on the value of an organisation using its
free cash flow and free cash flow to equity
under alternative horizon and growth
assumptions.
[3]
d) Explain the use of the BSOP model to estimate
the value of equity of an organisation and
discuss the implications of the model for a
change in the value of equity.
[2]
e) Explain the role of BSOP model in the
assessment of default risk, the value of debt
and its potential recoverability.
[2]
5. International investment and financing
decisions
a) Assess the impact upon the value of a project
of alternative exchange rate assumptions.
[3]
b) Forecast project or organisation free cash flows
in any specified currency and determine the
project’s net present value or organisation
value under differing exchange rate, fiscal and
transaction cost assumptions.
[2]
c) Evaluate the significance of exchange controls
for a given investment decision and strategies
for dealing with restricted remittance.
[3]
d) Assess the impact of a project upon an
organisation’s exposure to translation,
transaction and economic risk.
[3]
e) Assess and advise on the costs and benefits of
alternative sources of finance available within
the international equity and bond markets.
[3]
C ACQUISITIONS AND MERGERS
1. Acquisitions and mergers versus other growth
strategies
a) Discuss the arguments for and against the use
of acquisitions and mergers as a method of
corporate expansion.
[2]
b) Evaluate the corporate and competitive nature
of a given acquisition proposal.
[3]
c) Advise upon the criteria for choosing an
appropriate target for acquisition.
[3]
d) Compare the various explanations for the high
failure rate of acquisitions in enhancing
shareholder value.
[3]
e) Evaluate, from a given context, the potential for
synergy separately classified as:
[3]
i) Revenue synergy
© ACCA 2017-2018 All rights reserved.
12
ii) Cost synergy
iii) Financial synergy.
f) Evaluate the use of the reverse takeover as a
method of acquisition and as a way of
obtaining a stock market listing:
[3]
2. Valuation for acquisitions and mergers
a) Discuss the problem of overvaluation.
[2]
b) Estimate the potential near-term and
continuing growth levels of a corporation’s
earnings using both internal and external
measures.
[3]
c) Discuss, assess and advise on the value
created from an acquisition or merger of both
quoted and unquoted entities using models
such as:
[3]
i) ’Book value-plus’ models
ii) Market based models
iii) Cash flow models, including free cash
flows.
Taking into account the changes in the risk
profile and risk exposure of the acquirer and
the target entities
d) Apply appropriate methods, such as: risk-adjusted cost of capital, adjusted net present
values and changing price-earnings multipliers
resulting from the acquisition or merger, to the
valuation process where appropriate.
[3]
e) Demonstrate an understanding of the
procedure for valuing high growth start-ups.
[2]
3. Regulatory framework and processes
a) Demonstrate an understanding of the principal
factors influencing the development of the
regulatory framework for mergers and
acquisitions globally and, in particular, be able
to compare and contrast the shareholder versus
the stakeholder models of regulation.
[2]
b) Identify the main regulatory issues which are
likely to arise in the context of a given offer and
i) assess whether the offer is likely to be in
the shareholders’ best interests
ii) advise the directors of a target entity on
the most appropriate defence if a specific
offer is to be treated as hostile.
[3]
4. Financing acquisitions and mergers
a) Compare the various sources of financing
available for a proposed cash-based
acquisition.
[3]
b) Evaluate the advantages and disadvantages of
a financial offer for a given acquisition proposal
using pure or mixed mode financing and
recommend the most appropriate offer to be
made.
[3]
c) Assess the impact of a given financial offer on
the reported financial position and performance
of the acquirer.
[3]
D CORPORATE RECONSTRUCTION AND RE-ORGANISATION
1. Financial reconstruction
a) Assess an organisational situation and
determine whether a financial reconstruction is
an appropriate strategy for a given business
situation.
[3]
b) Assess the likely response of the capital market
and/or individual suppliers of capital to any
reconstruction scheme and the impact their
response is likely to have upon the value of the
organisation.
[3]
2. Business re-organisation
a) Recommend, with reasons, strategies for
unbundling parts of a quoted company.
[3]
b) Evaluate the likely financial and other benefits
of unbundling.
[3]
c) Advise on the financial issues relating to a
management buy-out and buy-in.
[3]
E TREASURY AND ADVANCED RISK
MANAGEMENT TECHNIQUES
1. The role of the treasury function in
multinationals
a) Discuss the role of the treasury management
function within:
[3]
i) The short term management of the
organisation’s financial resources
© ACCA 2017-2018 All rights reserved.
13
ii) The longer term maximisation of corporate
value
iii) The management of risk exposure.
b) Discuss the operations of the derivatives
market, including:
[3]
i) The relative advantages and disadvantages
of exchange traded versus OTC agreements
ii) Key features, such as standard contracts,
tick sizes, margin requirements and margin
trading
iii) The source of basis risk and how it can be
minimised.
iv) Risks such as delta, gamma, vega, rho and
theta, and how these can be managed.
2. The use of financial derivatives to hedge
against forex risk
a) Assess the impact on an organisation to
exposure in translation, transaction and
economic risks and how these can be
managed.
[3]
b) Evaluate, for a given hedging requirement,
which of the following is the most appropriate
strategy, given the nature of the underlying
position and the risk exposure:
[3]
i) The use of the forward exchange market
and the creation of a money market hedge
ii) Synthetic foreign exchange agreements
(SAFEs)
iii) Exchange-traded currency futures contracts
iv) Currency swaps
v) FOREX swaps
vi) Currency options.
c) Advise on the use of bilateral and multilateral
netting and matching as tools for minimising
FOREX transactions costs and the management
of market barriers to the free movement of
capital and other remittances.
[3]
3. The use of financial derivatives to hedge
against interest rate risk
a) Evaluate, for a given hedging requirement,
which of the following is the most appropriate
given the nature of the underlying position and
the risk exposure:
[3]
i) Forward Rate Agreements (FRAs)
ii) Interest rate futures
iii) Interest rate swaps
iv) Interest rate options.
© ACCA 2017-2018 All rights reserved.
14
SUMMARY OF CHANGES TO P4
There are changes to the syllabus to reflect the latest business and educational developments affecting this
paper. These are summarised in the table below.
ACCA periodically reviews its qualification syllabuses so that they fully meet the needs of stakeholders such as
employers, students, regulatory and advisory bodies and learning providers.
Amendments /additions
There have been no amendments to the P4 study guide from the 2016 – 2017 study guide.
tudy Guide
A GOVERNANCE AND RESPONSIBILITY
1. The scope of governance
a) Define and explain the meaning of corporate
governance.
[2]
b) Explain, and analyse the issues raised by the
development of the joint stock company as the
dominant form of business organisation and
the separation of ownership and control over
business activity.
[3]
c) Analyse the purposes and objectives of
corporate governance in the public and private
sectors.
[2]
d) Explain, and apply in context of corporate
governance, the key underpinning concepts
of:
[3]
i) fairness
ii) openness/transparency
iii) innovation
iv) scepticism
iii) independence
iv) probity/honesty
v) responsibility
vi) accountability
vii) reputation
viii)judgment
ix) integrity
e) Explain and assess the major areas of
organisational life affected by issues in
corporate governance.
[3]
i) duties of directors and functions of the
board (including setting a responsible ‘tone’
from the top and being accountable for the
performance and impacts of the
organisation)
ii) the composition and balance of the board
(and board committees)
iii) relevance and reliabilityof corporate
reporting and external auditing
iv) directors’ remuneration and rewards
v) responsibility of the board for risk
management systems and internal control
vi) the rights and responsibilities of
shareholders, including institutional
investors
vii) corporate social responsibility and business
ethics.
f) Compare, and distinguish between public,
private and non-governmental organisations
(NGO) sectors with regard to the issues raised
by, and scope of, governance.
[3]
g) Explain and evaluate the roles, interests and
claims of, the internal parties involved in
corporate governance.
[3]
i) Directors
ii) Company secretaries
iii) Sub-board management
iv) Employee representatives (e.g. trade
unions)
h) Explain and evaluate the roles, interests and
claims of, the external parties involved in
corporate governance.
[3]
i) Shareholders (including shareholders’ rights
and responsibilities)
ii) Auditors
iii) Regulators
iv) Government
v) Stock exchanges
vi) Small investors (and minority rights)
vii) Institutional investors (see also next point)
i) Analyse and discuss the role and influence of
institutional investors in corporate governance
systems and structures, for example the
roles and influences of pension funds,
insurance companies and mutual funds.
[2]
2. Agency relationships and theories
a) Define and explore agency theory.
[2]
b) Define and explain the key concepts in agency
theory.
[2]
i) Agents
ii) Principals
iii) Agency
iv) Agency costs
v) Accountability
vi) Fiduciary responsibilities
vii) Stakeholders
c) Explain and explore the nature of the principal-agent relationship in the context of corporate
governance.
[3]
© ACCA 2017-2018 All rights reserved.
8
d) Analyse and critically evaluate the nature of
agency accountability in agency relationships.
[3]
e) Explain and analyse the following other
theories used to explain aspects of the agency
relationship.
[2]
i) Transaction costs theory
ii) Stakeholder theory
3. The board of directors
a) Explain and evaluate the roles and
responsibilities of boards of directors.
[3]
b) Describe, distinguish between and evaluate the
cases for and against, unitary and two-tier
board structures.
[3]
c) Describe the characteristics, board composition
and types of, directors (including defining
executive and non-executive directors (NED).
[2]
d) Describe and assess the purposes, roles and
responsibilities of NEDs.
[3]
e) Describe and analyse the general principles of
legal and regulatory frameworks within which
directors operate on corporate boards:
[2]
i) legal rights and responsibilities,
ii) time-limited appointments
iii) retirement by rotation,
iv) service contracts,
v) removal,
vi) disqualification
vii) conflict and disclosure of interests
viii)insider dealing/trading
f) Define, explore and compare the roles of the
chief executive officer and company
chairman.
[3]
g) Describe and assess the importance and
execution of, induction and continuing
professional development of directors on
boards of directors.
[3]
h) Explain and analyse the frameworks for
assessing the performance of boards and
individual directors (including NEDs) on
boards.
[2]
i) Explain the meanings of ‘diversity’ and
critically evaluate issues of diversity on boards
of directors.
[3]
4. Board committees
a) Explain and assess the importance, roles and
accountabilities of, board committees in
corporate governance.
[3]
b) Explain and evaluate the role and purpose of
the following committees in effective corporate
governance:
[3]
i) Remuneration committees
ii) Nominations committees
iii) Risk committees.
iv) Audit committees
5. Directors’ remuneration
a) Describe and assess the general principles of
remuneration.
[3]
i) purposes
ii) components
iii) links to strategy
iv) links to labour market conditions.
b) Explain and assess the effect of various
components of remuneration packages on
directors’ behaviour.
[3]
i) basic salary
ii) performance related
iii) shares and share options
iv) loyalty bonuses
v) benefits in kind
vi) pension benefits
c) Explain and analyse the legal, ethical,
competitive and regulatory issues associated
with directors’ remuneration.
[3]
6. Different approaches to corporate governance
a) Describe and compare the essentials of ‘rules’
and ‘principles’ based approaches to corporate
governance. Includes discussion of ‘comply or
explain’.
[3]
b) Describe and analyse the different models of
business ownership that influence different
governance regimes (e.g. family firms versus
joint stock company-based models).
[2]
c) Describe and critically evaluate the reasons
behind the development and use of codes of
© ACCA 2017-2018 All rights reserved.
9
practice in corporate governance
(acknowledging national differences and
convergence).
[3]
d) Explain and briefly explore the development of
corporate governance codes in principles-based
jurisdictions.
[2]
i) impetus and background
ii) major corporate governance codes
iii) effects of
e) Explain and explore the Sarbanes-Oxley Act
(2002) as an example of a rules-based
approach to corporate governance.
[2]
i) impetus and background
ii) main provisions/contents
iii) effects of
f) Describe and explore the objectives, content
and limitations of, corporate governance codes
intended to apply to multiple national
jurisdictions.
[2]
i) Organisation for economic cooperation and
development (OECD) Report (2004)
ii) International corporate governance network
(ICGN) Report (2005)
7. Corporate governance and corporate social
responsibility
a) Explain and explore social responsibility in the
context of corporate governance.
[2]
b) Discuss and critically assess the concept of
stakeholder power and interest using
the Mendelow model and how this can
affect strategy and corporate governance.
[3]
c) Analyse and evaluate issues of ‘ownership,’
‘property’ and the responsibilities of ownership
in the context of shareholding.
[3]
d) Explain the concept of the organisation as a
corporate citizen of society with rights and
responsibilities.
[3]
8. Governance: reporting and disclosure
a) Explain and assess the general principles of
disclosure and communication with
shareholders.
[3]
b) Explain and analyse ‘best practice’ corporate
governance disclosure requirements.
[2]
c) Define and distinguish between mandatory and
voluntary disclosure of corporate information in
the normal reporting cycle.
[2]
d) Explain and explore the nature of, and reasons
and motivations for, voluntary disclosure in a
principles-based reporting environment
(compared to, for example, the reporting
regime in the USA).
[3]
e) Explain and analyse the purposes of the annual
general meeting and extraordinary general
meetings for information exchange between
board and shareholders.
[2]
f) Describe and assess the role of proxy voting in
corporate governance.
[3]
.
9. Public sector governance
a) Describe, compare and contrast public sector,
private sector, charitable status and non-governmental (NGO and quasi-NGOs) forms of
organisation, including purposes and
objectives, performance, ownership and
stakeholders (including lobby groups)
[2]
b) Describe, compare and contrast the different
types of public sector organisations at
subnational, national and supranational level
[2]
c) Assess and evaluate the strategic objectives,
leadership and governance arrangements
specific to public sector organisations as
contrasted with private sector
[3]
.
d) Discuss and assess the nature of democratic
control, political influence and policy
implementation in public sector organisations
including the contestable nature of public
sector policy
[3]
.
e) Discuss obligations of the public sector
organisations to meet the economy,
effectiveness, efficiency (3 E’s) criteria and
promote public value
[3]
.
© ACCA 2017-2018 All rights reserved.
10
B INTERNAL CONTROL AND REVIEW
1. Management control systems in corporate
governance
a) Define and explain internal management
control.
[2]
b) Explain and explore the importance of internal
control and risk management in corporate
governance.
[3]
c) Describe the objectives of internal control
systems and how they can help prevent fraud
and error.
[2]
d) Identify, explain and evaluate the corporate
governance and executive management roles in
risk management (in particular the separation
between responsibility for ensuring that
adequate risk management systems are in
place and the application of risk management
systems and practices in the organisation).
[3]
e) Identify and assess the importance of the
elements or components of internal control
systems.
[3]
2. Internal control, audit and compliance in
corporate governance
a) Describe the function and importance of
internal audit.
[1]
b) Explain, and discuss the importance of, auditor
independence in all client-auditor situations
(including internal audit).
[3]
c) Explain, and assess the nature and sources of
risks to, auditor independence. Assess the
hazard of auditor capture.
[3]
d) Explain and evaluate the importance of
compliance and the role of the internal audit
function in internal control.
[3]
e) Explore and evaluate the effectiveness of
internal control systems.
[3]
f) Describe and analyse the work of the internal
audit committee in overseeing the internal
audit function.
[2]
g) Explain and explore the importance and
characteristics of, the audit committee’s
relationship with external auditors.
[2]
3. Internal control and reporting
a) Describe and assess the need to report on
internal controls to shareholders.
[3]
b) Describe the content of a report on internal
control and audit.
[2]
c) Explain and assess how internal controls
underpin and provide information for
accurate financial reporting.
[3]
4. Management information in audit and internal
control
a) Explain and assess the need for adequate
information flows to management for the
purposes of the management of internal control
and risk.
[3]
b) Evaluate the qualities and characteristics
of information required in internal control and
risk management and monitoring.
[3]
C IDENTIFYING AND ASSESSING RISK
1. Risk and the risk management process
a) Define and explain risk in the context of
corporate governance.
[2]
b) Define and describe management
responsibilities in risk management.
[2]
c) Explain the dynamic nature of risk
assessment.
[2]
d) Explain the importance and nature of
management responses to changing risk
assessments.
[2]
e) Explain risk appetite and how this affects risk
policy.
[2]
2. Categories of risk
a) Define and compare (distinguish between)
strategic and operational risks.
[2]
© ACCA 2017-2018 All rights reserved.
11
b) Define and explain the sources and impacts of
common business risks.
[2]
i) market
ii) credit
iii) liquidity
iv) technological
v) legal
vi) health, safety and environmental
vii) reputation
viii)business probity
ix) derivatives
c) Describe and evaluate the nature and
importance of business and financial risks.
[3]
d) Recognise and analyse the sector or industry
specific nature of many business risks.
[2]
3. Identification, assessment and measurement
of risk
a) Identify, and assess the impact upon, the
stakeholders involved in business risk.
[3]
b) Explain and analyse the concepts of assessing
the severity and probability of risk events.
[2]
c) Describe and evaluate a framework for board
level consideration of risk.
[3]
d) Describe the process of and importance of,
externally reporting on internal control and
risk.
[2]
e) Explain the sources, and assess the importance
of, accurate information for risk management.
[3]
f) Explain and assess the ALARP (as low as
reasonably practicable) principle in risk
assessment and how this relates to severity
and probability.
[3]
g) Evaluate the difficulties of risk perception
including the concepts of objective and
subjective risk perception.
[3]
h) Explain and evaluate the concepts of related
and correlated risk factors.
[3]
D CONTROLLING AND MANAGING RISK
1. Targeting and monitoring of risk
a) Explain and assess the role of a risk manager
in identifying and monitoring risk.
[3]
b) Explain and evaluate the role of the risk
committee in identifying and monitoring risk.
[3]
c) Describe and assess the role of internal or
external risk auditing in monitoring risk.
[3]
2. Methods of controlling and reducing risk
a) Explain the importance of risk awareness at all
levels in an organisation.
[2]
b) Describe and analyse the concept of
embedding risk in an organisation’s systems
and procedures.
[3]
c) Describe and evaluate the concept of
embedding risk in an organisation’s culture and
values.
[3]
d) Explain and analyse the concepts of spreading
and diversifying risk and when this would be
appropriate.
[2]
e) Identify and assess how business organisations
use policies and techniques to mitigate various
types of business and financial risks.
[3]
3. Risk avoidance, retention and modelling
a) Explain, and assess the importance of, risk
transference, avoidance, reduction and
acceptance.
[3]
b) Explain and evaluate the different attitudes to
risk and how these can affect strategy.
[3]
c) Explain and assess the necessity of incurring
risk as part of competitively managing a
business organisation.
[3]
d) Explain and assess attitudes towards risk and
the ways in which risk varies in relation to the
size, structure and development of an
organisation
[3]
© ACCA 2017-2018 All rights reserved.
12
E PROFESSIONAL VALUES, ETHICS AND
SOCIAL RESPONSIBILITY
1. Ethical theories
a) Explain and distinguish between the ethical
theories of relativism and absolutism.
[2]
b) Explain, in an accounting and governance
context, Kohlberg’s stages of human moral
development.
[3]
c) Describe and distinguish between deontological
and teleological/consequentialist approaches to
ethics.
[2]
d) Apply commonly used ethical decision-making
models in accounting and professional
contexts
[2]
i) American Accounting Association model
ii) Tucker’s 5-question model
2. Different approaches to ethics and social
responsibility.
a) Describe and evaluate Gray, Owen & Adams
(1996) seven positions on social
responsibility.
[2]
b)
]
Describe and evaluate other constructions of
corporate and personal ethical stance:
[2]
i) short-term shareholder interests
ii) long-term shareholder interests
iii) multiple stakeholder obligations
iv) shaper of society
c) Describe and analyse the variables determining
the cultural context of ethics and corporate
social responsibility (CSR).
[2]
d) Explain and evaluate the concepts of 'CSR
strategy' and 'strategic CSR'
[2]
.
3. Professions and the public interest
a) Explain and explore the nature of a
‘profession’ and ‘professionalism’.
[2]
b) Describe and assess what is meant by ‘the
public interest’.
[2]
c) Describe the role of, and assess the
widespread influence of, accounting as a
profession in the organisational context.
[3]
d) Analyse the role of accounting as a profession
in society.
[2]
e) Recognise accounting’s role as a value-laden
profession capable of influencing the
distribution of power and wealth in society.
[3]
f) Describe and critically evaluate issues
surrounding accounting and acting against the
public interest.
[3]
4. Professional practice and codes of ethics
a) Describe and explore the areas of behaviour
covered by corporate codes of ethics.
[3]
b) Describe and assess the content of, and
principles behind, professional codes
of ethics.
[3]
c) Describe and assess the codes of ethics
relevant to accounting professionals such as
the IESBA (IFAC) or professional body codes.
[3]
5. Conflicts of interest and the consequences of
unethical behaviour
a) Describe and evaluate issues associated with
conflicts of interest and ethical conflict
resolution.
[3]
b) Explain and evaluate the nature and impacts of
ethical threats and safeguards.
[3]
c) Explain and explore how threats to
independence can affect ethical behaviour.
[3]
d) Explain and explore 'bribery' and 'corruption' in
the context of corporate governance, and
assess how these can undermine confidence
and trust.
[3]
e) Describe and assess best practice measures for
reducing and combating bribery and
corruption, and the barriers to implementing
such measures.
[3]
© ACCA 2017-2018 All rights reserved.
13
6. Ethical characteristics of professionalism
a) Explain and analyse the content and nature of
ethical decision-making using content from
Kohlberg’s framework as appropriate.
[2]
b) Explain and analyse issues related to the
application of ethical behaviour in a
professional context.
[2]
c) Describe and discuss ‘rules based’ and
‘principles based’ approaches to resolving
ethical dilemmas encountered in professional
accounting.
[2]
7. Integrated reporting and sustainability issues in
the conduct of business
a) Explain and assess the concept of integrated
reporting and evaluate the issues
concerning accounting for sustainability
(including the alternative definitions of
capital:.
[3]
(i) Financial
(ii) Manufactured
(iii) Intellectual
(iv) Human
(v) Social and relationship
(vi) Natural
b) Describe and assess the social and
environmental impacts that economic activity
can have (in terms of social and environmental
‘footprints’ and environmental reporting)).
[3]
c) Describe the main features of internal
management systems for underpinning
environmental and sustainability accounting
such as EMAS and ISO 14000.
[1]
d) Explain and assess the typical content
elements and guiding principles of an
integrated report, and discuss
the usefulness of this information to
stakeholders.
[3]
e) Explain the nature of social and environmental
audit and evaluate the contribution it can make
to the assurance of integrated reports.
[3]
© ACCA 2017-2018 All rights reserved.
14
No comments:
Post a Comment