aca advanced stage syllabus 2011

8/2/2019 Aca Advanced Stage Syllabus 2011

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ACA Advanced Stage Syllabus 2011 - Final - Version 5 1Copyright ICAEW 2006 - 2011

ACA ADVANCED STAGE

SYLLABUS 2011


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CONTENTS

ACA Overview .................................................................................................................................... 3Advanced Stage ................................................................................................................................. 4The Link to Work Experience .............................................................................................................. 6

Skills Progression through the ACA qualification ................................................................................. 8Business Reporting ............................................................................................................................. 9Business Change .............................................................................................................................. 11Case Study ....................................................................................................................................... 14Technical Knowledge Grids .............................................................................................................. 15Assurance and Audit ......................................................................................................................... 16Business Analysis ............................................................................................................................. 19Ethics Codes and Standards ............................................................................................................. 23

Financial Reporting ........................................................................................................................... 24Differences between IFRS and UK GAAP ......................................................................................... 26Taxation ............................................................................................................................................ 38APPENDIX A: Business Reporting ................................................................................................ 45APPENDIX B: Business Change ................................................................................................... 49APPENDIX C: Case Study ............................................................................................................ 54


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ACA OVERVIEW

Aim

The ACA is regarded globally as one of the leading business and finance qualifications and isrecognised and valued in practice, industry, commerce and the public sector.The ACAqualification aims to ensure that all newly qualified chartered accountants have the technical and

professional skills required to meet the professional challenges likely to be faced and to provide aplatform on which to build continuing professional development.

Structure

The syllabus has been designed to develop core technical, commercial, and ethical skills andknowledge in a structured and rigorous manner. Progression through the ACA modules, incombination with integrated and monitored work experience, will equip and prepare students forthe demanding multi-disciplinary case study. This final module assesses key skills of analysis,synthesis and communication, commercial and ethical awareness and the application ofprofessional judgement.

The diagram above shows the twelve modules at the Professional Stage, where the focus is on theacquisition and application of technical skills and knowledge, and the Advanced Stage whichcomprises two technical integration modules and the Case Study.

Ethics is embedded throughout the qualification and there are specific learning outcomes includedin a number of the modules. The syllabus has been designed to ensure students understand thefundamental principles of ethics, can apply relevant ethical guidance and are able to recommendactions to resolve ethical issues.


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ADVANCED STAGE

Aim

The Advanced Stage of the ACA qualification is designed to ensure that students are able tointegrate and apply their technical, professional and ethical skills in a variety of business

environments.

The Advanced Stage has been constructed to ensure that students: are able to identify and evaluate a broad range of business issues and communicate

appropriate advice provide relevant and correct technical advice, whilst ensuring that the business implications

of the advice given are understood apply the highest level of professional and ethical skills to business and technical issues maintain their awareness of important emerging business issues are provided with the platform to develop their skills within a continuing professional

development framework

Structure and progression

There are three Advanced Stage modules: the Case Study and two underpinning technicalintegration modules. The two technical integration modules are Business Reporting and BusinessChange.

The Professional Stage consists of knowledge modules and application modules. The Knowledgemodules introduce the core technical knowledge and skills required by a chartered accountant. Theapplication modules further develop and assess practical application of technical knowledge andskills.


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The technical knowledge acquired at the Professional Stage is developed to an advanced leveland integrated in a broader range of business scenarios in the Advanced Stage technicalintegration modules. The application of technical knowledge in these modules requires anappreciation of the typical issues and problems facing businesses and their relationship tocorporate reporting, assurance and taxation. A greater depth of business and financial analysis willbe required to understand the implications and risks arising from the business issues.

New technical topics are introduced in the technical integration modules, reflecting studentsgreater financial and business awareness and their emerging proficiency and ability to integrateknowledge and skills both within and across technical subjects. Students will be required to usemore complex financial instruments in business finance and risk management for example.

Students will also be required to apply professional skills in the technical integration modules.These professional skills are then examined to a greater extent in the final ACA module: the CaseStudy. This module requires higher level cognitive skills, analytical and evaluative skills andemphasises the importance of communication and articulation skills.

The table on page 7 identifies the skills progression through the ACA qualification.

Syllabus

This document presents the high level learning outcomes for the two technical integration modulesand sets out the skills requirements for the Case Study. The appendix contains details of thetechnical knowledge required for the Advanced Stage.

Assessment

The two technical integration modules will be examined using traditional paper basedassessments. Each paper based exam will be 3.5 hours in length. These exams will containquestions requiring the integration of knowledge both within technical disciplines and across

technical disciplines. Questions integrated across all subject streams are an essential step towardsthe Case Study but will have more structure and guidance than those at the Case Study.

The Case Study will continue in its present format of a 4 hour written exam with advanceinformation provided to students ahead of the exam and impact information issued in the exam,containing the Case Study requirements.

Flexibility

There are no regulations stipulating the order in which students must attempt the technicalintegration modules. The Case Study must be the final module attempted and can only beattempted in the final year of a training contract.

There is no restriction on the number of attempts permitted at each Advanced Stage module.

Open Book Policy

Students may take any written or printed material into the exam hall subject to practical spacerestrictions.


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THE LINK TO WORK EXPERIENCE

The work experience requirements for students provide a framework to develop appropriate work

experience, completion of which is essential in order to qualify for membership. Work experience isalso an essential component for examination preparation.

The work experience framework is built aroundfive key skills:

Business awareness being aware of the internal and external issues and pressure forchange facing an organisation and assessing an organisations performance.

Technical and functional expertise applying syllabus learning outcomes and whereappropriate, further technical knowledge to real situations.

Ethics and professionalism recognising issues, using knowledge and experience to assessimplications, making confident decisions and recommendations.

Professional judgement making recommendations and adding value with appropriate,targeted and relevant solutions.

Personal effectiveness developing, maintaining and exercising skills and personalattributes necessary for the role and responsibilities.

The examinations, and in particular the Advanced Stage, embrace all of these skills.

The link between work experience and the examinations is demonstrated by the skills developmentgrids produced by the examiners.

This will help students see that their practical knowledge and skills gained in the workplace feedback into the exam room and vice-versa.


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The message is clear students should use the work experience framework and skillsdevelopment grids to ensure success in exam performance and success in their workplaceperformance.

The appendix to this syllabus contains the following skills grids:

Appendix A: Business Reporting Appendix B: Business Change Appendix C: Case Study

The grid below together with those in the appendix should be read in conjunction with the technicalsyllabus for each subject. They set out the learning outcomes that are addressed under each ofthe skills areas. In addition, for each skills area, there is a description of:

The specific skills that are assessed How these skills are assessed

References where included in a learning outcomes column of a grid (e.g. 3c) are direct referencesto learning outcomes set out in the technical syllabus.


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SKILLS PROGRESSION THROUGH THE ACA QUALIFICATION

Assessed skills Professional Stage Adv

Knowledge modules Application modules Technical Integratio

Assimilating and using information

Understanding the subjectmatter and identifying issues

Specific issues Simple scenarios Complex scenarios

Accessing, evaluating andmanaging information

Information/data as provided Single information sourceprovided

Multiple information sourceprovided

Using technical knowledgeand professional experience

Highly structured applicationof non-integrated knowledge

Structured application of non-integrated knowledge

Structured application ofintegrated and non-integraknowledge and experience

Structuring problems and solutions

Using analytical tools Specified tools Specified tools Tools inferred by nature ofproblem

Analysing and evaluatingproblems

Highly specified tasks Specified non-integratedproblems

Specified integrated and nintegrated problems

Applying judgement

Assessing quality ofinformation

Objective testing Specified in simple scenario Specified in complex scen

Assessing options andpriorities including ethicalissues

Options given Options included in simplescenario

Options included in complescenario

Considering otherperspectives

Not assessed Possible alternative provided Alternative(s) provided

Conclusions and recommendations and communication

Drawing conclusions andmaking recommendations

Not assessed Specified conclusions andrecommendations in simplescenarios

Specified conclusions andrecommendations in compscenarios

Presenting data and writtenwork

Prescribed exam format Exam requirements, includingsome professionalpresentation

Short written professionalpresentations


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BUSINESS REPORTING

Module aim

To ensure that students can apply analysis techniques, technical knowledge and professional skills toresolve real-life compliance issues faced by businesses.

Students may be put, for example, in the role of a preparer of financial statements, or other corporatereports such as on sustainability and corporate responsibility, an advisor or in an assurance rolefacing business issues where there are reporting implications. Compliance issues relating to taxationwill also feature in this module.

Students will be required to use professional judgement to identify and evaluate alternatives anddetermine the appropriate solution(s) to compliance issues, giving due consideration to thecommercial impact of their recommendations.

Specification grid

This grid provides a general guide as to the subject matter within this module and assessmentcoverage over a period of time.

Syllabus area Weighting (%)

Ethics and law 5 - 10

Taxation 20 - 30

Audit and assurance 30 - 40

Corporate reporting 30 - 40

Business analysis 0

Examples of Business scenarios

The business scenarios listed below provide an understanding of the likely context in which technicalknowledge and ethical awareness will be assessed. The scenarios relate to things that havehappened or are happening within a business and will be presented in individual, group andinternational contexts.

1. Business and ethical issues including situations of business risk in the process of stakeholdercommunication

2. Business and ethical issues in the process of tax compliance work including situations withcorporate reporting implications

3. Current taxation and corporate reporting issues for businesses4. Undertaking controls and systems process assurance projects including review and testing of

controls and reporting to management5. Assessment of controls including IT and E-commerce controls6. Breaches of laws and regulations that may require forensic accounting and investigation projects

to assess risk and provide management with information to decide upon appropriate actions7. Issues of earnings management, creative accounting and aggressive earnings management8. Businesses undertaking major projects and/or organisational or process transformation9. Issues arising from raising finance, including issues of compilation of financial information,

production of prospective financial information and implications for corporate reporting10. Issues arising from corporate transformations and group reorganisations11. Issues arising from International corporate expansion including situations with taxation and

corporate reporting implications


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12. Issues arising from use of complex financial instruments in business finance and riskmanagement

Integrated learning outcomes

On completion of this module students will be able to:

1. identify and explain ethical issues and recommend appropriate actions to solve ethical dilemmasin a given business scenario

2. report objectively in a complex environment of business opportunities and threats within the legal,regulatory and compliance environment when: preparing and presenting corporate reports - including preparing and presenting financial

statements, other information included in reports and interim financial reporting presenting corporate governance reports in accordance with the revised combined code presenting corporate responsibility, environment, sustainability and social reports

3. evaluate and apply appropriatecorporatereporting treatments to given scenarios4. evaluate and apply appropriate corporate reporting treatments, including corporate governance

reports and sustainability and/or corporate responsibility reports5. evaluate and apply auditing, assurance and related services standards in complex scenarios6. analyse and evaluate business risks and their implications for corporate reporting and audit

opinions7. analyse and evaluate financial risks (Including financing, currency and interest rate risks) and

their implications for corporate reporting and audit opinions8. analyse, evaluate and calculate the tax consequences of given scenarios, including

circumstances where overseas taxes affect national taxes9. analyse, evaluate and assist entities in the adherence to regulations surrounding taxation10. recognise opportunities to use alternative tax treatments arising from past events and

transactions11. analyse and evaluate controls, including IT and E-commerce controls

12. analyse and evaluate appropriate management actions where laws and regulations have beenbreached

13. recognise the implications for auditors of engagements in connection with investment circulars14. evaluate and apply appropriate laws and regulations in situations of insolvency, administration,

liquidation and bankruptcy15. evaluate and advise on appropriate corporate governance mechanisms16. recognise money laundering transactions and related offences and the reporting responsibilities

for accountants and auditors (Including proceeds of Crime Act)17. analyse and evaluate controls over financial reporting (including in the context of COSA and

S404(a) of the Sarbanes-Oxley Act)18. analyse and evaluate strengths and weaknesses of corporate governance mechanisms and

processes19. explain and communicate current issues in corporate reporting and assurance20. undertake appropriate financial analysis to:

develop an understanding of a business from financial and operational data and information,provided in draft or published format.

assess the quality of such information, by reference to its truth, fairness, credibility andplausibility as a basis for a meaningful analysis of a businesss current position, futureprospects and risks.

apply suitable financial analysis techniques to analyse financial and operational data to bringout and explain a businesss position, prospects and risks.

review the output of such analysis to identify key sensitivities and risks. communicate the results of such analysis, including any reservations regarding transparency

and objectivity of data and information.


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BUSINESS CHANGE

Module aim

To ensure that students can provide technical advice in respect of issues arising in business

transformations, mergers, acquisitions, alliances and disposals.

Students will be required to analyse and interpret both external and internal financial and non-financial data in order to plan for change and provide advice. In undertaking this analysis students willbe expected to evaluate the impact of stakeholder influences on the data, including the impact ofchoice of reporting policies.

Taxation and practical business techniques are particularly important in this module, where businesstechniques include aspects of business strategy, business finance, performance management andcosting. There will also be assurance, ethical and legal implications to be considered whendeveloping and assessing strategic and business plans.

Specification grid

This grid is a general guide as to the subject matter within this module and assessment coverageover a period of time.

Syllabus area Weighting (%)

Ethics and law 5 -10

Taxation 25-35

Assurance 10-20

Corporate reporting 15-25Business analysis 30-35

Examples of Business scenarios

The business scenarios listed below provide an understanding of the likely context in which technicalknowledge and ethical awareness will be assessed. The scenarios relate to future businessstrategies and developments and will be presented in individual, group and international contexts.

1. Controls and systems process planning2. Developing management and corporate governance mechanisms3. Business risk management

4. Developing business and information strategies including E-commerce and E-business5. Transfer pricing decisions6. Business start-up planning7. Business and asset valuations upon acquisitions and disposals for business and tax purposes8. Due diligence investigations of information provided to investors including those concerning

risks related to sustainability and corporate responsibility9. Raising finance

Initial public offers Private equity arrangements

10. Developing performance management approaches11. Developing remuneration and reward packages


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12. Structuring of entities Incorporation Group re-organisation Outsourcing Joint ventures and alliances Acquisitions and mergers Demergers Franchising Divestment Management buy-out Management buy-in

13. Business recovery14. Insolvency and bankruptcy15. Developing international operations16. Structuring of business finance

Integrated learning outcomes

On completion of this module students will be able to:

1. identify and explain ethical issues and recommend appropriate actions to solve ethical dilemmasin a given business scenario

2. develop proposals and advise on corporate governance, corporate reporting, financial reporting,taxation,and assurance issues in organisational planning, change and business strategyimplementation

3. develop business plans and proposals and advise on technical issues relating to business andorganisational plans, the risks involved and how those risks should be managed

4. develop plans to manage a business in distress to avoid insolvency or to evaluate and apply

5. assurance procedures to a business in distress6. develop proposals and advise on taxation issues relating to decisions to cease trading,7. including communicating alternative strategies8. develop outline proposals and advise on outline requirements for IT applications and technology

to support business plans including E-commerce, E-business and virtual arrangements9. advise on and develop proposals for organisational structuring and the financing of existing and

new businesses and projects10. advise on and apply appropriate valuation methods for assets and businesses for the purposes of

acquisitions and disposals for business and taxation purposes11. advise on and develop appropriate performance management approaches for businesses and

business units12. advise on and develop appropriate remuneration and reward packages for staff and executives

13. assess, advise on and propose appropriate business strategies to meet stated objectives and14. apply appropriate assurance procedures15. assess, advise on and propose appropriate costing and pricing approaches for businesses16. appraise and advise on appropriate measures of return and risk for assessing business projects17. appraise and advise on appropriate methods to assess and manage financial risk in businesses18. develop proposals and advise on taxation issues relating to business start-ups, including19. evaluating choice of business structure20. develop proposals and advise on taxation issues relating to personal and corporate business

transformations, including communicating alternative strategies21. assess and advise on required corporate governance mechanisms22. undertake appropriate financial and business analysis:

develop an understanding of financial and operational data and information frommanagement information systems, drawing inferences relating to its completeness,


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accuracy and credibility, as a basis for a meaningful analysis of the position, futureprospects and risks for a business

apply suitable financial, strategic and operational analysis techniques to analyse financialand operational data to bring out and explain business position, prospects and risks,including the use of:I. traditional financial measures of profit, returns, earnings per share, returns, cash flow,

gearing, liquidity and operations.II. EBITDA and residual incomeIII. Balanced scorecard approachIV. Use of financial and non-financial performance indicators for customers, employees

and other stakeholdersV. Business strategic analysis techniques for businesses their resources, processes and

environment communicate an explanation, including any reservations regarding transparency and

objectivity of data and information, of the position, prospects and risks of a business basedon analysis of financial and operational data and information.

Assess and appraise the constituent elements of working capital and advise on the methods

by which working capital can be managed by an entity, including treasury management.


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CASE STUDY

Module Aim

To ensure that students can provide advice in respect of complex business issues in the form of awritten report.

The objective of the Case Study is to assess studentsunderstanding of complex business issuesand the ability to analyse financial and non-financial data, exercise professional and ethicaljudgement, and develop conclusions and recommendations. The limited class time available with atutor, even when supplemented by extensive home study, is insufficient for success in the CaseStudy. Students must bring work experience into their preparation and development programme.

Success at the Case Study requires an integration of the technical knowledge and skills acquiredfrom all of the ACA modules, namely:

the core technical knowledge and skills and practical application acquired at the ProfessionalStage;

the technical, analytical, evaluative and integration skills from the Business Change and

Business Reporting modules; and the advisory, judgemental and communication skills acquired through practical work experience

undertaken during the training contract.

All areas of the syllabus may be tested over time.

The Case Study is designed to reproduce a typical situation in which chartered accountants findthemselves. This will involve using information arising from meetings and communicated inmemoranda, letters or reports from a variety of business and professional advisors and stakeholders.The situation will generally relate to a business plan or transaction and will require preparation for thesubmission of a report.

The reality of such situations is thatin drafting a report you would:

receive some materials in advance carry out some work beforehand and make use of it in the report include additional analysis in appendices to the report develop additional lines of enquiry as you assemble the report expect to discuss and advise on relevant matters

The Case Study scenario may be based on any one of a variety of different organisational structuresor operations. Students will be provided with advance information on the organisation and itsbusiness environment ahead of the exam.

This information will not give specific indication of the eventual requirements of the Case Study.Students will be expected to familiarise themselves with the information provided about theorganisation and the industry in which it operates, undertaking some additional analysis andresearch. Students may take the results of their work into the examination room.

The Case Study will not require the detailed computations needed for the Professional Stage orTechnical Integration modules at the Advanced Stage, but students will be required to undertakefinancial and business analysis.

Requirements will be open in that there will be no predetermined correct answers to the Case Study.


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TECHNICAL KNOWLEDGE GRIDS

Introduction

The tables contained in this section show the technical knowledge in the disciplines of financialreporting, assurance, taxation and business analysis covered in the ACA syllabus by module.

For each individual topic / standard the level of knowledge required in the relevant Professional Stagemodule and the Advanced Stage content is shown.

The knowledge levels are defined as follows:

Level D

An awareness of the scope of the subject matter.

Level CA general knowledge with a basic understanding of the subject matter and training in the applicationthereof sufficient to identify significant issues and evaluate their potential implications or impact.

Level B

A working knowledge with a broad understanding of the subject matter and a level of experience inthe application thereof sufficient to apply the subject matter in straightforward circumstances.

Level A

A thorough knowledge with a solid understanding of the subject matter and experience in theapplication thereof sufficient to exercise reasonable professional judgement in the application of thesubject matter in those circumstances generally encountered by chartered accountants.

Key to other symbols:

the knowledge level reached at Professional Stage is assumed to be continued


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ASSURANCE AND AUDIT

Title

ProfessionalStage

Advanced

Stage

Assurance

Auditand

Assurance

The International Auditing and Assurance Standards Board C

The Authority Attaching to Standards Issued by the International Auditingand Assurance Standards Board

A

The Authority Attaching to Practice Statements Issued by the InternationalAuditing and Assurance Standards Board

A

Discussion Papers C

Working Procedures C

International Standards on Auditing (UK and Ireland)

200 Overall Objectives of the Independent Auditor and the Conduct of anAudit in Accordance with International Standards on Auditing

B A

210 Agreeing theTerms of Audit Engagements B

220 Quality Control for an Audit of Financial Statements B

230 Audit Documentation B A

240 The Auditors Responsibilities Relating to Fraud in an Audit ofFinancial Statements

B A

250 A Consideration of Laws and Regulations in an Audit of FinancialStatements250 B The Auditors Right and Duty to Report to Regulators in theFinancial Sector

B A

260 Communication with Those Charged with Governance B A

265 Communicating Deficiencies in Internal Control to Those Chargedwith Governance and Management

B A

300 Planning an Audit of Financial Statements B A

315 Identifying and Assessing the Risks of Material Misstatement throughUnderstanding the Entity and its environment

C A

320 Materiality in Planning and Performing an Audit C A

330 The Auditors Responses to Assessed Risks B A

402 Audit Considerations Relating to an Entity Using a ServiceOrganisation

C C

450 Evaluation of Misstatements Identified during the Audit C A

500 Audit Evidence B A

501 Audit Evidence - Specific Considerations for Selected Items A

505 External Confirmations B B A


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Title

ProfessionalStage

Advan

cedStage

Assur

ance

Audit

and

Assur

ance

510 Initial Audit Engagements - Opening Balances B A

520 Analytical Procedures C B A

530 Audit Sampling C C A

540 Auditing Accounting Estimates, Including Fair Value AccountingEstimates & Related Disclosures

C B A

550 Related Parties B A560 Subsequent Events B A

570 Going Concern A

580 Written Representations C B A

600 Special Considerations Audits of Group Financial Statements(including the Work of Component Auditors)

C A

610 Using the Work of Internal Auditors C A

620 Using the Work of an Auditors Expert C A

700 The Auditors Report on Financial Statements B A

705 Modifications to the Opinion in the Independent Auditors Report B

706 Emphasis of Matter Paragraphs and Other Matter(s) Paragraphs inthe Independent Auditors Report

A

710 Comparative Information Corresponding Figures and ComparativeFinancial Statements

B A

720 A The Auditors Responsibility in relation to Other Information inDocuments Containing Audited Financial Statements720 B The Auditors Statutory Reporting Responsibility in Relation toDirectors Reports

B A

800 Special Considerations Audits of Financial Statements prepared inAccordance with Special Purpose Frameworks

B

805 Special Considerations Audits of Single Financial Statements andSpecific Elements, Accounts or items of a Financial Statement

B A

810 Engagements to Report on Summary Financial Statements B A

International Auditing Practice Statements (IAPSs)

1000 Inter-bank Confirmation Procedures D

1004 The Relationship Between Banking Supervisors and Banks ExternalAuditors

D

1006 Audits of the Financial Statements of Banks D


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Title

ProfessionalStage

Advan

cedStage

Assur

ance

Audit

and

Assur

ance

1010 The Consideration of Environmental Matters in the Audit of FinancialStatements

A

1012 Auditing Derivative Financial Instruments B

1013 Electronic Commerce: Effect on the Audit of Financial Statements A

International Standards on Review Engagements (ISREs)

2400 Engagements to Review Financial Statements C B

2410 Review of Interim Financial Information Performed by theIndependent Auditor of the Entity

B

International Standards on Assurance Engagements (ISAEs)

3000R Assurance Engagements Other than Audits or Reviews ofHistorical Financial Information

C B

3400 The Examination of Prospective Financial Information C B

International Standards on Related Services (ISRSs)

4400 Engagements to Perform Agreed-upon Procedures RegardingFinancial Information

B

4410 Engagements to Compile Financial Information B

IFAC Statements

ISQC1 Quality Control for Firms that Perform Audits and Reviews ofFinancial Statements, and Other Assurance and Related ServicesEngagements

C B

APB Bulletins

2009/22 Audit Reports on Financial Statements in the UK C B


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BUSINESS ANALYSIS

Topic

Professional Stage

Advanced

Stage

Managemen

t

Information

Business&

Finance

Financial

Managemen

t

Business

Strategy

STRATEGIC ANALYSIS

Environmental and market analysis tools

PEST analysis C A

Porters five forces C A

Product life cycle C A

Boston consulting group matrix C A

Competitor analysis C A

Positional and other analysis tools

Resource audit C A

Resource-based strategy A

Value chain analysis C A

SWOT analysis C A

Gap analysis C A

Competitor analysis A

Marketing analysis A

Competitor advantage A

Benchmarking A

Directional policy matrix B

Business process analysis A B

Strategic risk analysis A

Balanced scorecard C A

STRATEGIC CHOICE

Strategy formulation, evaluation and choice C A

Business risk management C A

Financial analysis and data analysis A

Stakeholder analysis A

Objectives and stakeholders preferences C B

Corporate responsibility and sustainability C B

STRATEGIC IMPLEMENTATION


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Topic

Professional Stage

Advan

cedStage

Manag

ement

Inform

ation

Busin

ess&

Fina

nce

Financial

Manag

ement

Business

Strategy

Market value added (MVA) A

INVESTMENT APPRAISAL AND BASIC RISK ANALYSIS

Project appraisal

NPV B A

IRR B A

Payback B A

Relevant cash flows A

Tax and inflation A

Replacement analysis A

Capital Rationing A

Adjusted present value (APV) A

Assessing risk

Project appraisal and sensitivity analysis B A

Project appraisal and simulation B A

Expected values B A

Scenario planning A

Gap analysis B

Continuous vs. event risk B

FINANCIAL ANALYSIS

Cost of capital

Cost of equity B A

Cost of debt B A

Cost of preference shares B A

Cost of bank loans B A

Weighted average cost of capital (WACC) B A

Effective interest rates A

Splitting convertibles into equity and debt elements A

Public sector discount rates A

Portfolio theory and CAPM

Portfolio theory B ACAPM B A


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Topic

Professional Stage

Advan

cedStage

Manag

ement

Inform

ation

Busin

ess&

Fina

nce

Financial

Manag

ement

Business

Strategy

APT and MCPM A

CAPM and cost of capital B A

International cost of capital A

Bonds

Bond pricing using NPV A

Yields to maturity A

Duration and price volatility A

Convexity A

Term structure of interest rates A

Corporate borrowing and default risk A

SOURCES OF FINANCE AND FINANCING ARRANGEMENTS

Short, medium and long term sources of finance B A

Loan agreement conditions (warranties; covenants;

guarantees)

B A

Raising capital B A

Gearing and capital structure A

Loan agreements and covenants A

Dividend policy A

Financing reconstructions (eg: group reconstruction, spinoff, purchase of own shares, use of distributable profits)

B A

Working capital management C A

FINANCIAL ENGINEERING

Futures, options and swaps

Options B A

Interest rate futures B A

Interest rate options B A

Interest forward rate agreements (FRAs) B A

Interest rate swaps B A

Foreign exchange

Currency forward contracts B A

Currency money market cover B A


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Topic

Professional Stage

Advan

cedStage

Manag

ement

Inform

ation

Busin

ess&

Fina

nce

Financial

Manag

ement

Business

Strategy

Currency options B A

Currency swaps B A

Operational techniques for managing currency risk B A

Theoretical determinants of foreign exchange rates B A

Option value

Value of a call and put option C B

Black Scholes option pricing model B

Binomial Option Pricing Model B

Real options C B

ETHICS CODES AND STANDARDS

Ethics Codes and Standards Level Professional Stage modules

IFAC Code of Ethics for Professional Accountants(parts A, B and C)

A AssuranceBusiness and FinanceLawPrinciples of TaxationAudit and AssuranceBusiness StrategyFinancial ReportingTaxation

ICAEW Code of Ethics(section 1.2 of the members handbook)

A

APB Ethical Standards 1-5 (revised)Provisions Available to Small Entities (revised)

A AssuranceAudit and Assurance


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IAS39 Financial Instruments: Recognition and Measurement C B A

IAS40 Investment Property A

IAS41 Agriculture D

IFRS1 First-Time Adoption of IFRS A

IFRS2 Share-based Payment A

IFRS3 Business Combinations C B A

IFRS4 Insurance Contracts D

IFRS5 Non-current Assets Held for Sale and DiscontinuedOperations

B A

IFRS6 Exploration for and Evaluation of Mineral Resources D

IFRS7 Financial Instruments: Disclosures B A

IFRS8 Operating Segments A

IFRS9 Financial Statements CIFRS for SMEs C


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DIFFERENCES BETWEEN IFRS AND UK GAAP

The following table identifies the scope of the differences examinable in the ACA qualification and where they wdifferences will become examinable where the relevant IFRS is set at knowledge level A. The differences may modules but only in a different context, for example at the Advanced Stage where knowledge of the differencesWhere a general awareness only of an accounting standard is expected (knowledge level D) any differences w

Key: First Module

FR = Financial ReportingAS = Advanced Stage

TitleFirst

Module

Key examinable differencesbetween IFRS and UK GAAP

Preface to InternationalFinancial ReportingStandards

FR No examinable differences

Framework for Preparationand Presentation ofFinancial Statements

FR

ASB Statement of Principles for Financial Reporting

Includes chapters on the reporting entity, presentation and accouwhere there is no direct equivalent in the IASB Framework

Measurement chapter is more detailed with an emphasis on the d

Companies Act

Format 1 and 2 profit & loss account classifications of expenses aIAS1 requires further detail, but not necessarily as individual line comprehensive income.

CA balance sheet formats are less flexible than IAS1 formats thatclassification formats.

Differences in terminology used, including a balance sheet which financial position under IAS 1.


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TitleFirst

Module


IAS1 Presentation ofFinancial Statements FR

FRS3 Reporting Financial Performance

Specifies certain mezzanine exceptional items that must be presloss account after operating profit. IAS1 doesnt specify items andconcept of exceptional items.

Requires separate presentation of profit & loss account and STRGstatement of comprehensive income which combines both.

Requires a sub-total for operating profit which is not explicitly req

FRS18 Accounting Policies

The disclosure requirements for estimation techniques are not asa discussion of significant estimation techniques.

FRS28 Corresponding Amounts

Does not specifically require comparative information for narrativebe disclosed.

IAS2 Inventories FRSSAP9 Stocks and Long Term Contracts

No examinable differences.

IAS7 Statement of CashFlows

FR

FRS1 Cash Flow Statements

Allows certain exemptions from preparing a cash flow statement fcompanies. No exemptions in IAS7.

The definition of cash is more restrictive and only includes cash ademand (within 24 hours). IAS7 uses the wider terminology of c


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Cash flows are classified under eight standard headings rather th

as to where certain cash flows, such as interest paid, are present

IAS8 Accounting Policies,Changes in AccountingEstimates and Errors

FR


Comparative financial information is restated where a fundamentawhich is more restrictive than IAS 8 which requires restatement fo

FRS18 Accounting Policies

Impending changes to accounting policies are not required to be

FRS28 Corresponding Amounts

No examinable differences

IAS10 Events after theReporting Period

FRFRS21 Events After the Balance Sheet Date


IAS11 ConstructionContracts

FR

SSAP9 Stocks and Long-Term Contracts

Unlike IAS11, service contracts may fall within its scope.

Requires the asset representing the gross amount due from custobetween amounts recoverable on contracts (debtors) and long-te

Inequalities in profit generation from different stages of a contractdetermining the attributable profit. IAS11 is silent on this.

FRS19 Deferred tax


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IAS12 Income Taxes AS

Requires deferred taxation to be recognised on the basis of timingtemporary differences.

May require deferred taxation to be recognised at a different rate transactions eliminated on consolidation.

FRS19 permits, but does not require, the discounting of deferred prohibits this.

FRS 19 does not normally recognise deferred taxation on the rev

IAS16 Property, Plant andEquipment

FR

FRS15 Tangible Fixed Assets

Where assets have been revalued FRS15 requires the use of exi

fair value. FRS15 specifies a maximum period of five years between full val

every three years. IAS16 does not specify a maximum period anddepends on changes in market values.

FRS15 requires impairment losses to be debited first against any the asset unless it reflects a consumption of economic benefits. IAlimitation.

The residual values of assets are assessed at the date of acquisitexpected future price changes. However, residual values should bsheet date and revised if appropriate. IAS16 requires them to be rreporting period taking into account current price changes. This m

expense. Annual impairment reviews are required for all assets, which are

of more than 50 years or not depreciated. IAS16 does not include

SSAP21 Accounting For Leases and Hire Purchase Contracts


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IAS17 Leases FR

SSAP21 contains the 90% test rebuttable presumption for deter

finance and operating leases. IAS17 specifically requires leases of land and buildings to be split

of the land and a separate lease of the buildings. Under SSAP21 The net cash investment method is used for lessor accounting. IA

method. UK GAAP requires operating lease rental incentives to be spread

term and the period until the next rent review. IAS requires any inwhole lease term.

IAS18 Revenue FR There is no comprehensive UK accounting standard covering revenue. Reporting the Substance of Transactions and IAS 18 are consistent.

IAS19 Employee Benefits AS

FRS17 Retirement Benefits

The scope of IAS19 is wider and covers different types of employ IAS19 allows a similar immediate recognition approach to actuaria

However, it alternatively permits the deferral from recognition of aremain within a 10% corridor.

Deferred tax balances are netted off the net pension scheme assIAS19 they must be shown separately.

IAS20 Accounting forGovernment Grants andDisclosure of GovernmentAssistance

FRCompanies Act

There are no examinable differences


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IAS21 The Effects ofChange in ForeignExchange Rates

AS

FRS23 The Effects of Changes in Foreign Exchange Rates


IAS23 Borrowing Costs FR


FRS 15 allows the option for borrowing costs to be capitalised andpolicy. IAS 23 requires directly attributable costs, including borrowcost of the asset.

FRS 15 limits the capitalisation of borrowing costs to the finance cincurred. IAS23 limits the amount to the borrowing costs on the to

investment income from any temporary investment of those funds

IAS24 Related PartyDisclosures FR

FRS8 Related Party Disclosures

Unlike IAS24, parent companys individual financial statements ardisclosures when consolidated financial statements are presented

Unlike IAS24, wholly owned UK subsidiaries are exempt from discparent entity.

Disclosure requirements differ. In general FRS8 requires the discparty where a transaction has occurred whereas IAS24 does not.

Management compensation disclosures are included in CA rather

disclosures on loans and other transactions involving directors. IAS24 does not consider the materiality of related party transactiofrom the perspective of both the company and the related party.

IAS26 Accounting andReporting by RetirementBenefit Plans

AS No examinable differences.


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IAS27 Consolidated andSeparate Financial

Statements

FR, AS

FRS2 Accounting for Subsidiary Undertakings

Includes an exclusion of a subsidiary from consolidation on the grrestrictions. No exemption exists under IAS27. (FR)

Under IAS27 the existence of potential voting rights should be coconsideration is required under UK GAAP. (FR)

Requires the non-controlling interest to be presented separately f

requires it to be shown as a separate component of equity. (FR) IAS27 requires changes in a parents ownership interest in a subs

loss of control are accounted for within equity. (AS) IAS27 requires any investment retained in the former subsidiary f

measured at its fair value at the date when control is lost. FRS2 d

IAS28 Investments inAssociates FR

FRS9 Associates and Joint Ventures

Prescribes detailed format for equity accounting. IAS 28 does notstatement of comprehensive income. However, IAS1 provides limtax presentation of the associates income. FRS9 shows the com

Requires investors to recognise their share of any interest in net lwhere there is a legal or constructive obligation to make good tho

IAS29 Financial Reportingin HyperinflationaryEconomies

AS

FRS24 Financial Reporting in Hyperinflationary Environments



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IAS31 Interests in JointVentures

FR

FRS9 Associates and Joint Ventures

Requires the use of the gross equity method rather than proportiomethods allowed by IAS31.

IAS32 FinancialInstruments: Presentation

FRFRS25 Financial Instruments: Disclosure and Presentation


IAS33 Earnings per Share FRFRS22 Earnings Per Share


IAS34 Interim FinancialReporting

ASNo UK accounting standard on interim financial reporting. IAS34 is broastatement on interim reports.

IAS36 Impairment of Assets FR

FRS11 Impairment of fixed assets and goodwill

Impairment losses on previously revalued assets are taken to therelate to a consumption of economic benefits (see IAS16\FRS15

Impairment losses are allocated to goodwill, intangible assets andIAS36 allocates the losses to goodwill first and then on a pro-rataassets.

FRS11 is more restrictive on the recognition of the reversal of intagoodwill.

Unlike IAS36, where cash flows have been used to demonstrate trequires future cash flows to be monitored against those forecast(look back test).

FRS12 Provisions, Contingent Liabilities and Contingent Assets


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IAS37 Provisions,

Contingent Liabilities andContingent Assets

FR No examinable differences

IAS38 Intangible Assets FR

SSAP13 Accounting for Research and Development

The capitalisation of development expenditure is optional. IAS38 where it meets the recognition criteria.

Development expenditure recognition criteria include a requiremeexpectation of future benefits. IAS38 is more stringent as the requbenefits.

FRS10 Goodwill and Intangible Assets

Only intangible assets that can be sold separately from the busineGAAP. IAS38 allows non-separable assets to be recognised wheother legal rights.

Allows amortisation of intangibles over economic life or no amortiassessed. Under IAS38 goodwill and indefinite life assets should tested annually for impairment.

IAS39 FinancialInstruments: Recognitionand Measurement

ASFRS26 Financial Instruments: Measurement


IAS40 Investment Property FR

SSAP19 Accounting for Investment Properties

Requires measurement at open market value. IAS40 allows a cho Investment gains and losses are taken to STRGL unless they rep

value. Under IAS40 all gains and losses are recognised in profit o


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IAS41 Agriculture AS No equivalent UK accounting standard.

IFRS1 First-Time Adoptionof IFRS

AS Not applicable not relevant to UK GAAP

IFRS2 Share-basedPayment

ASFRS20 Share-based Payment


IFRS3 BusinessCombinations

FR, AS FRS6 Acquisitions and Mergers

Merger accounting is required when criteria are met. Not permitte

Group reconstructions are merger accounted for (AS). Common control transactions are not within scope of IFRS3 (AS) IFRS3 contains explicit option (not in UK GAAP) to measure mino

interest (NCI)) as fair value.

FRS7 Fair Values in Acquisition Accounting

Provides specific guidance on fair value measurement. IFRS3 onvalue measurement.

Only requires separable intangible assets to be fair valued. Hencrecognised under IFRS3.

Requires acquisition-related costs to be included in the cost of the

them to be treated as period costs. Post-acquisition changes to the estimates of contingent considera

goodwill recognised. IFRS3 permits few subsequent changes to b

FRS10 Goodwill and Intangible Assets

Goodwill is often amortised over its estimated useful economic lif


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presumption that it is not more than 20 years. IFRS3 prohibits am

impairment reviews. Negative goodwill is capitalised as a separate item within goodwil

over which any related losses are expected and as acquired non-IFRS3 requires immediate recognition as a gain in the profit & los

IFRS4 Insurance Contracts AS

Companies Act

Contains specific requirements for insurance companiesSpecific requirements in SORP and FRS27, Life Assurance

IFRS5 Non-current AssetsHeld for Sale andDiscontinuedOperations

FR


Continuing and discontinued activities must be analysed. Unlike Ion face of P&L account.

Discontinued classification will often be at a later date than IFRS5during the reporting period or before the earlier of the approval ofthree months after year-end.


Classification and measurement of assets generally continues asdisposal. This includes depreciation until the date of disposal. IFRdepreciation to cease while a non-current asset is held for sale.

FRS1 Cash flow Statements

Encourages the separate disclosure of cash flows from discontinurather than encouraged by IFRS5.


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IFRS6 Exploration for and

Evaluation of MineralResources

AS SORP discusses the issues surrounding oil and gas exploration and pr

IFRS7 FinancialInstruments: Disclosures

ASFRS29 Financial Instruments: Disclosures


IFRS8 Operating Segments FR

SSAP25 Segmental Reporting

Omission of segment information is allowed where disclosure ma

entitys interests. No exemption exists under IFRS8. Requires disclosures for both geographic and business segments

about the components of the entity that management uses to makmatters.

Requires segment information to be prepared in accordance withrequires the amounts reported to be on the same basis as for in

SSAP25 does not require unlisted subsidiaries of listed parents towhere the parent has prepared such information.

IFRS in individual company accounts.

Candidates may be required to discuss the key issues that need to be considered when considering whether UKfor their individual company accounts or to move to IFRS. This is examinable in the Financial Reporting module


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TAXATION

Title

ProfessionalStage

AdvancedStage

Principles

of

Taxation

Taxation

Objectives of taxation C

Ethics A

HM Revenue & Customs B

Tax evasion and avoidance C B A

Business TaxAdministration

Administration B

Appeals C

Payments B A

Penalties and interest B A

Self assessment B A

Chargeable gains

Chargeable assets C B

Chargeable disposals C B

Chargeable persons C B

Chattels: wasting and non wasting B

Costs of acquisition and disposal C B

Indexation B A

Leases A

Nil gain/nil loss transfers A

Part disposals B

Pre 31 March 1982 assets A

Qualifying corporate bonds A

Relief for capital losses B A

Reorganisations and reconstructions A

Shares and securities (including bonus and rights issues) A

Chargeable gains reliefs

Entrepreneurs relief A

Gift relief A

Incorporation relief A

Roll-over relief A


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Title

ProfessionalStage

Adv

ancedStage

Principlesof

Ta

xation

Ta

xation

Substantial shareholding exemption A

Trading profits

Adjustments to profits B A

Badges of trade B A

Capital allowances B A

Foreign currency transactions A

Long periods of account C A

Pension contributions B A

Royalty payments B

Royalty receipts B

Unincorporated businesses

Basis of assessment current year basis B A

Change of accounting date B

Commencement and cessation of trade B A

Overlap profits and treatment of opening year losses B A

Partnerships B A

Trading losses A

Profits chargeable to corporation tax

Property income (including lease premiums) A

Trading profits B A

Loan relationships B A

Intangible assets B A

Research and development expenditure B A

Research and development tax credits A

Miscellaneous income B A

Chargeable gains B A

Charges on income gift aid B A

Trading losses A

Use of deficit on non-trading loan relationships A

Corporation tax computation

Chargeable accounting periods C B AClose companies A


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Title

ProfessionalStage

Adv

ancedStage

Principlesof

Ta

xation

Ta

xation

Corporation tax liability B A

Corporate Venturing Scheme A

Distributions B

Double tax relief (including underlying tax and withholding tax) B

Liquidation A

Onshore pooling provisions C

Provision of services through a company A

Rates of tax B A

Residence C B

Groups

Associated companies C B A

Capital gains groups A

Changes in group structure A

Change in ownership B A

Consortium relief A

Controlled foreign companies A

Degrouping charges A

Group loss relief A

Group relationships A

Non-coterminous accounting periods A

Overseas companies and branches A

Pre-acquisition gains and losses A

Roll-over relief A

Transfer of assets A

Transfer pricing A

Stamp Duty and Stamp Duty Land Tax

Basic principles B

Chargeable occasions B

Exemptions B

VAT

Administration B Appeals C


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Title

ProfessionalStage

Adv

ancedStage

Principlesof

Ta

xation

Ta

xation

Capital goods scheme A

Group aspects A

Input VAT A

Output VAT A

Overseas aspects A

Partial exemption B

Payments A

Penalties and interest A

Property transactions A

Registration and deregistration A

Small business reliefs A

Taxable person A

Taxable supplies A

Transfer of a business as a going concern B

VAT records and accounts A

Personal tax

Administration

Administration B

Appeals C

PAYE B

Payments B A

Penalties and interest B A

Self assessment B A

Employees

Allowable deductions against employment income A

Employment income B A

Share schemes A

Statutory Mileage Rates Scheme A

Taxable and exempt benefits B A

Termination payments B

Other incomeDividends from UK companies B A


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Title

ProfessionalStage

Adv

ancedStage

Principlesof

Ta

xation

Ta

xation

Enterprise Investment Scheme B

Investment income B A

ISAs B B

Property income C A

Lease premiums A

Savings income B A

Venture Capital Trusts B

Income tax computation

Exempt income B A

Gift aid B A

Income tax liable and payable B A

Independent taxation and jointly owned assets B A

Married couples allowance B A

Pension contributions

- Provisions for retirement B A

- Tax reliefs B A

Personal age allowance B A

Personal allowance B A

Rates of tax B A

Taxable persons C A

Capital gains tax

Annual exemption B A

Chargeable assets C B

Chargeable disposals C B

Chargeable persons C B

Chattels: wasting and non wasting B

Connected persons A

Converted trading losses B

Costs of acquisition and disposal C B

Indexation A

Leases ANil gain/nil loss transfers A


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Title

ProfessionalStage

Adv

ancedStage

Principlesof

Ta

xation

Ta

xation

Part disposals B

Pre 31 March 1982 assets A

Qualifying corporate bonds A

Rate of tax A

Relief for capital losses B A

Reorganisations and reconstructions A

Shares and securities (including bonus and rights issues) A

Capital gains tax reliefs

Letting relief A

Principal private residence relief A

Reinvestment relief under EIS B

National insurance contributions

Administration C B

Classes of NIC C B

Directors B

Maximum contributions C

Taxable benefits B

Basic principles of inheritance tax

Chargeable persons B

Chargeable property B

Excluded property B

Inter-spouse transfers A

Rates of tax A

Related property B

Seven year accumulation period A

Inheritance tax on lifetime transfers

Discretionary trusts A

Potentially exempt transfers A

Inheritance tax on death

Death estate A

Deeds of variation B Lifetime transfers A


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Title

ProfessionalStage

Adv

ancedStage

Principlesof

Ta

xation

Ta

xation

Reliefs & exemptions from inheritance tax

Agricultural property relief B

Annual exemption B

Business property relief A

Gifts to charities and political parties A

Gifts with reservation of benefit B

Marriage exemption A

Normal expenditure out of income A

Quick succession relief B

Small gifts exemption A

Taper relief A

Overseas aspects of personal taxation

Arising basis A

Deemed domicile for IHT A

Domicile A

Foreign assets income and gains A

Double tax relief A

Ordinary residence A

Remittance basis A

Residence A

Temporary absence A

UK taxation of non-domiciled individuals A


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APPENDIX A: BUSINESS REPORTING

Learning outcomes Assessed skills How skills are assessed


1. identify and explain ethicaldilemmas

10. recognise opportunities touse alternative tax treatmentsarising from past events andtransactions

13. recognise the implicationsfor auditors of engagements inconnection with investmentcirculars

16. recognise moneylaundering transactions andrelated offences and thereporting responsibilities foraccountants and auditors(Including Proceeds of CrimeAct)

19. explain and communicatecurrent issues in corporate andfinancial reporting andassurance

20. undertake appropriatefinancial analysis to develop anunderstanding of a businessfrom financial and operationaldata and information, providedin draft or published format.

Understanding the subjectmatter

Assessing, evaluating andmanaging informationprovided in multiple sources

Operating to a brief instructured situations

Explaining the nature ofethics and its significance

in the businessenvironment andunderstanding theimportance of ethicalbehaviour in respect of thepublic interest, theaccounting profession, thelaw and other valuesystems.

Understanding theimportance of contributing tothe profession andappreciating the ethos andculture of the accountancyprofession

Understanding the publicinterest and corporateresponsibility

Questions will contain bothstructured and unstructureddetails in scenarios of varyingcomplexity with technicalcontent and business context.The scenarios will normally bebased on historic events.

Information may need to beassimilated from varioussources within the question.Some issues may need to be

deduced by inference oranalysis.

Questions will requirecandidates to have a detailedunderstanding of relevantregulations in tax, financialreporting, auditing, businessanalysis and ethics, which willneed to be related to practicalbusiness scenarios and appliedto any data provided. The dataprovided will be based largelyon historic events and focus ontechnical compliance andunderstanding.

Candidates will be required torespond to instructions from aline manager, a client requestor from other senior personnel.The requests may be specific,or they may be more general

requiring interpretation by thecandidate.

Candidates will be required to: assimilate information

provided by internal andexternal sources

evaluate inconsistencies ininformation provided frommultiple sources

use different sources ofevidence to confirm

financialstatement assertions


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2. report objectively in acomplex environment ofbusiness threats andopportunities within the legal,regulatory and complianceenvironment when preparingcorporate reports - includingfinancial statements, otherinformation included in reportsand interim financial reporting

6. analyse business risks andtheir implications for corporatereporting and audit opinions

7. analyse financial risks(Including financing, currencyand interest rate risks) andtheir implications for corporatereporting and audit opinions

8. analyse and calculate the taxconsequences of givenscenarios, includingcircumstances where overseastaxes affect national taxes

11. analyse controls, includingIT and E-commerce controls

12. analyse appropriatemanagement actions wherelaws and regulations havebeen breached

17. analyse controls overfinancial reporting (including inthe context of COSA andS404(a) of the Sarbanes-Oxley

Act)

20. undertake appropriatefinancial analysis to:assess the quality of such

informationapply suitable financial

analysis techniques toanalyse financial andoperational data to bringout and explain abusinesss position,prospects and risks.

Understanding data &information given: identifying& understanding issues

arising in given scenarios

Using the data & informationgiven: analysing data andinformation to supportrequirement.

Drawing upon technical andprofessional knowledgelearnt to analyse issues

Applying knowledge fromdifferent technical areas:

analysing problems thatcombine technical skills in asingle disciplinaryenvironment

Financial statement analysis:performing the requiredcalculations; explaining orstating the issues

Using new concepts:evaluating new ideas and

concepts Recognising ethical issues

arising from situations likelyto be encountered by traineechartered accountants;identifying possible coursesof action to resolve them;and appreciating the ethicaldimensions of situations,

problems and proposals.

Identifying & explaining theconsequences of unethicalbehaviour

Identifying & using relevantup to date content ofInternational & ICAEW Codeof Ethics

Identifying and selectingappropriate courses of actionusing an ethical framework

Scenarios will be of two types:

questions restricted to onetechnical area

integrated questionscovering more than onetechnical area

Examples of the elements thatcandidates may be required toconsider are:

Audit and Assurance business risks in complex

scenarios the control environment tests of controls and

substantive procedures selective financial analysis risk in the context of IT or e-

business professional scepticism

Ethics ethical problems in complex

scenarios

ethical codes and structuredargument.

Financial reporting unstructured information a range of financial

reporting treatments complex financial reporting

information.

Tax range of appropriate tax

treatments descriptive analysis and

explanations integrate different taxes and

jurisdictions taxation impact of a

transaction


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Applying judgement

3. evaluate and applyappropriate financial reporting

treatments to given scenarios

4. evaluate and applyappropriate corporate reportingtreatments, including corporategovernance reports andcorporate responsibility reports

5. evaluate and apply auditing,assurance and related servicesstandards in complex scenarios

6. evaluate business risks andtheir implications for corporatereporting and audit opinions

7. evaluate financial risks(Including financing, currencyand interest rate risks) andtheir implications for corporatereporting and audit opinions

8. evaluate the taxconsequences of given

scenarios, includingcircumstances where overseastaxes affect national taxes

9. analyse, evaluate and assistentities in the adherence toregulations surroundingtaxation11. evaluate controls, includingIT and E-commerce controls

12. evaluate appropriatemanagement actions wherelaws and regulations havebeen breached

14. evaluate and applyappropriate laws andregulations in situations ofinsolvency, administration,liquidation and bankruptcy(including a basic appreciationof Chapter 11)

17. evaluate controls overfinancial reporting

Assessing arguments &considering evidence

against set criteria

Applying discrimination:filtering information providedto identify critical factors

Relating parts and wholes:discerning particular issueswithin complex scenarios

Demonstrating anunderstanding of

sensitivities to change(sensitivity analysis): flexinga range of inputs andassessing the outcomes

Demonstrating anunderstanding of differentperspectives analysing andinterpreting relatedproblems and situationsfrom alternative givenstances

Change management(appreciating theimpacts/effects of change):consider and evaluate theeffects of given alternativescenarios

Appreciating when moreexpert help is required

Applying a sceptical andcritical approach

Conducting critiques:critically reviewing situationsand problems

Seeking opportunities toadd value: thinkingimaginatively in a businesscontext

Prioritising key issues

Applying the concept of

Judgement will be applied inthe context of scenarios of

varying complexity, involvingcalculations and the drawing ofinferences from informationprovided.

Examples of how candidatesmay be required to apply theirjudgement include: selecting between technical

choices filtering data to identify

critical elements

prioritising information,issues or tasks

identifying omissions in theinformation

evaluating inconsistenciesin information

distinguishing between thevarious qualities of the dataprovided

evaluating the impact ofeconomic and politicalfactors

evaluating the effects ofknown events

evaluating theappropriateness ofaccounting policy choice

evaluating options comparing the effects of a

range of estimates,outcomes or financialtreatments

assessing the materiality oferrors

exercising own ethicaljudgement

identifying key linkages


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18. analyse and evaluatestrengths and weaknesses ofcorporate governancemechanisms and processes

20. review the output of

financial analysis to identify keysensitivities and risks.

materiality

Develop arguments, havingfirst appreciated theperspective of other parties

Exercise ethical judgement

Drawing conclusions, making recommendations and communication

1. recommend appropriateactions to solve ethicaldilemmas

2. report objectively within thelegal, regulatory andcompliance environment when:

presenting corporatereports

presenting corporategovernance reports inaccordance with the revisedcombined code

presenting corporateresponsibility, environment,sustainability and socialreports

15. evaluate and advise on

appropriate corporategovernance mechanisms

20. communicate the results offinancial analysis, including anyreservations regardingtransparency and objectivity ofdata and information.

Using technical knowledgeand evidence to supportreasoning and conclusions

Assimilating data fromdifferent sources, data typesin making decisions

Identifying the bestexplanation, solution orsteps against definedcriteria considering risk.

Identifying a range ofsolutions based on analysisand developingrecommendations whichcombine different technicalskills in a defined situation

Formulating opinions,advice, recommendations,plans, solutions, options andreservations based on validevidence

Presenting analysis andrecommendations inaccordance with instructions

Providing specifiedresponses to a specialist ornon-specialist audience

Examples of how candidatesmay be required to drawconclusions are: from data, facts,

calculations, judgementsand own analysis

on complex assurance

engagements by identify weaknesses in

financial informationsystems and their potentialconsequences

by distinguishing betweenthe qualities of dataprovided or other evidencegenerated

by developing riskmanagement solutions

by making strategic

decisions by valuing a company or

investments.

Examples of how candidatesmay be required to presenttheir recommendations are: a report/memorandum in

response to a specifictechnical issue and inaccordance with clientrequirements

reasoned advice supportedby calculations or analysis oftechnical/business issuesidentified

justifying a specificrecommended action whena variety of options areavailable

Candidates may be required toexplain the limitations of theirconclusions or

recommendations.


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APPENDIX B: BUSINESS CHANGE

Learning outcomes Assessed skills How skills are assessed


1. identify and explain ethical

dilemmas

18. undertake appropriatefinancial and business analysisto develop an understanding offinancial and operational dataand information frommanagement informationsystems

Understanding the subject

matter

Assessing, evaluating andmanaging informationprovided in multiple sources

Operating to a brief instructured situations

Explaining the nature ofethics and its significance inthe business environment

and understanding theimportance of ethicalbehaviour in respect of thepublic interest, theaccounting profession, thelaw and other value systems

Understanding theimportance of ethicalbehaviour to a professionalaccountant and the reasonsfor the adoption of ethicalcodes within practice,business contexts and theregulatory structure of theprofession.

Understanding theimportance of contributing tothe profession andappreciating the ethos andculture of the accountancy

profession

Understanding the publicinterest and corporateresponsibility

Understanding the role ofthe professional accountantwithin the public interest,practice and businesscontexts and the regulatorystructure of the profession

Questions will contain both

structured and unstructureddetails in scenarios of varyingcomplexity with technicalcontent and business context.The scenarios will normallyconsider the implications offuture events.

Information may need to beassimilated from varioussources within the question.Some issues may need to be

deduced by inference oranalysis.

Questions will requirecandidates to have a detailedunderstanding of relevantregulations in tax, financialreporting, auditing, businessanalysis and ethics, which willneed to be related to practicalbusiness scenarios and appliedto any data provided. The data

provided may include bothhistoric information andprojections/ forecasts.

Candidates will be required torespond to instructions from aline manager, a client requestor from other senior personnel.The requests may be specific,or they may be more generalrequiring interpretation by thecandidate.

Candidates will be required to: assimilate information

provided by internal andexternal sources

evaluate inconsistencies ininformation provided frommultiple sources

use different sources ofevidence to confirm financialstatement assertions

extrapolate giveninformation into the futurebased upon given or own


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assumptions


2. develop proposals oncorporate governance,corporate reporting, financial

reporting, tax, auditing andassurance issues inorganisational planning,change and business strategyimplementation

3. develop business plans andproposals on technical issuesrelating to business andorganisational plans, the risksinvolved and how those risksshould be managed

4. develop plans to manage abusiness in distress to avoidinsolvency

5. develop proposals ontaxation issues relating todecisions to cease trading

6. develop outline proposals forIT applications and technologyto support business plansincluding E-commerce, E-business and virtualarrangements

8. apply appropriate valuationmethods for assets andbusinesses for the purposes ofacquisitions and disposals forbusiness and tax purposes

11. assess business strategiesto meet stated objectives

12.assess costing and pricingapproaches for businesses

15. develop proposals ontaxation issues relating tobusiness start-ups

16. develop proposals ontaxation issues relating topersonal and corporatebusiness transformations

18. undertake appropriate

financial and business analysisby applying suitable financial,

Understanding data &information given, clarifyingthe information & identifying

gaps

Using the data & informationgiven: analysing andevaluating requirements,data, information, issues andsituations

Financial data analysis:prioritising and trading offsolutions to complexproblems

Financial statementanalysis: comparing andcontrasting more than oneelement of financialstatements to informdecision making

Analysing and evaluatingnew and complex ideaswithin a defined situation

Identifying the relevanttechnicalknowledge/professionalexperience requiredgenerating and validatingsolutions; identification ofrisks and ethical issueswithin the scenario

Recognising ethical issuesarising from situations likelyto be encountered by trainee

chartered accountants;identifying possible coursesof action to resolve themand appreciating the ethicaldimensions of situations,problems and proposals.

Approaching decisionmaking using an ethicalframework

Identifying and usingrelevant up to date contentof the International andICAEW Codes of Ethics

Scenarios will be integrated tocover more than one technicaldiscipline, and will include one

case study style question.Examples of the elements thatcandidates may be required toconsider are:

Audit and Assurance business risks in complex

scenarios the control environment tests of controls and

substantive procedures selective financial analysis risk in the context of IT or e-

business professional scepticism

Business analysis valuations where the

information is incomplete,suspect or inadequate.

key business and financialrisks

data from various sources impact of a strategy

Ethics ethical codes and structured

argument. ethical problems in complex

scenarios

Financial reporting unstructured information a range of financial

reporting treatments complex financial reporting

information impact of future events on

financial statements as awhole delaying or modifying future

decisions business position, prospects

and risksTax range of appropriate tax

treatments descriptive analysis and

explanations integrate different taxes and

jurisdictions taxation impact of a

transaction


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strategic and operationalanalysis techniques

delaying or modifying futuredecisions

Applying judgement

6. advise on outlinerequirements for IT

applications and technology tosupport business plansincluding E-commerce, E-business and virtualarrangements

9. develop appropriateperformance managementapproaches for businesses andbusiness units

10. develop approp