May 222013



Important areas to cover:

Q1 – English legal system; court structures and sources of law.

Q2 – Contract formation; offer, acceptance and consideration.

Q3 – Tort of negligence; duty of care, breach, causation and defences.

Q4 – Formation of company; or operation of a partnership.

Q5 – Capital and financing; shares and/or debentures.

Q6 – Company officers; directors/secretary/auditors.

Q7 – Employment law; employees v self employed workers.

Q8 – Contract dispute; breach of contract and damages.

Q9 – Breach of directors duties.

Q10 – Fraudulent behaviour; Money laundering or Bribery.


There will be 5 compulsory questions, each worth 20 marks. It is likely that one of these will be entirely written, with the others being a mixture of discursive and numerical requirements. This means that it is essential to practice written questions as well as numerical ones when studying for F5.

The syllabus for this paper is very broad, an understanding of all areas is necessary to pass the exam. It would be reasonable to expect one topic from each of the five syllabus areas to be tested. The examiner has repeatedly stated that question spotting is not a suitable way to approach F5. I believe that time spent trying to guess what is going to be in the exam would be better spent revising one additional topic.

Even with this in mind there are some general themes which crop up in most exams: variances have always been tested historically. Given the syllabus changes for 2013 it is likely that mix and yield and/or planning and operational variances will be tested.

Additionally performance management in the form of appraisal of a company or divisions within one company is a regular feature. This may include transfer pricing or the use of ROI and RI.

F6 (UK)

The exam will comprise five compulsory questions.

Q1 will focus on income tax with Q2 focusing on corporation tax. These two questions will make up 55% of the marks.

Commonly examined income tax areas include the employed earner and the sole trader.

Capital allowances is regularly examined within Q2 but we anticipate aspects of groups could also feature in this question.

Q 3 to 5 will total 15 marks each. Q3 will examine capital gains tax from either an individual and/or company perspective involving a number of disposals. The other two questions will cover other areas of the syllabus. One of these questions will be more thought provoking testing candidates ability to think about the tax implications of a situation.

VAT will be examined for at least 5 marks in either Q1 or 2 but could form a separate question. Inheritance tax will also always be examined for between 5 to 15 marks within Question 3, 4 or 5.

The paper will be largely computational with a few written marks for explanations.

F7 (Int)

There will be 5 questions in the exam, all compulsory. The first 25-mark question will cover a consolidated statement of profit or loss and other comprehensive income and/or consolidated statement of financial position, and may include a written part. Q2 and 3 will also be 25 marks, Q2 covering preparation of single entity financial statements, likely from a trial balance. Q3 is usually set in the context of interpretation and often includes a statement of cash flows, likely at this sitting.

The conceptual framework is often part of Q4 or 5 so it is an area you need to ensure you are familiar with. Inflation, discontinued operations, deferred tax, leases, intangible assets, government grants or financial instruments are possible topics for Q4 and 5 this sitting.

F8 (Int)

The F8 exam consists of 5 compulsory questions. Question 1 is a 30 mark scenario based question which will test a wide range of topics such as internal controls and audit evidence and procedures.

The second question focuses on testing knowledge and is worth 10 marks. This question is often broken down in to 3 or 4 separate requirements and can require you to define some of the key terms within audit and assurance.

Questions 3, 4 and 5 are worth 20 marks each and the requirements will largely be based upon the given scenario. Typical areas which are tested in these questions are corporate governance, planning, audit risk, internal controls, audit procedures and audit reports.

Audit procedures, internal controls, audit risk and audit reports are almost always examined so make sure that you can generate both tests of control and substantive procedures for key cycles and balances as well as being able to identify internal control deficiencies. You should also ensure that you can draw out audit risks from a scenario as well as determining the effect audit issues may have on the audit report.


The Examination contains four compulsory 25 mark questions, usually each question features a scenario and multiple requirements. Approximately 50% of the marks will be awarded for calculations and 50% for discussion. It is important that you practise both skills.

The F9 Examiner likes to test across the whole syllabus. In many post exam commentaries he has stated that candidates who were well prepared and who had studied all parts of the syllabus did well on this paper. Candidates who were not successful may have focused on a small number of topic areas.

Investment Appraisal, WACC, Working Capital and valuations have featured in most exams, but just focusing on these topics alone will not be enough to generate a pass. It’s possible to get a whole question on each of these topics but they may just form part of a single question. There is a fair chance that managing foreign exchange rate risk may be tested in June, but historically this has been for less than 10 marks.

To maximise your chances of passing you will need to ensure you have a wide understanding of the whole syllabus.


The P1 exam consists of one compulsory case study in section A for 50 marks. Within section B there is a choice of 2 from 3 questions (25 marks each)

The section A case study will test a wide range of topics with typically four or five requirements relating to the scenario information. This question will assess and link a range of subject areas across the syllabus.

It is vital that students read the case in detail, taking notes as appropriate and getting a feel for what the issues are. Professional marks are also awarded for presentation, logical flow of argument and quality of argument.

Scenarios may be drawn from any situation involving governance, internal controls, risk management, reporting. In addition students may be required to prepare a report applying Kohlberg’s theory, methods of ethical decision making using either the Tucker or AAA model or TARA or ALARP for risk management based questions.

Stakeholders in organisations and in decisions, Gray, Owen, Adams seven positions on corporate social responsibility, professional duties of accountants and appropriate safeguards are possible topics in both Section A and B.

The examiner has stressed the importance of reading technical articles. It is a pre-condition that all P1 students have read the examiner’s most recent article on Environmental accounting and reporting 2012.

P2 (Int)

There will be 4 questions. The compulsory question for 50 marks will cover consolidated financial statements with adjustments on other syllabus areas, plus written parts, often in the context of accounting adjustments and ethics.

You need to do two of the three 25 mark questions in section B of the exam, one of which is normally set in the context of a ‘specialised industry’ and one being a discussion question on current developments. A statement of profit or loss and other comprehensive income (with/without a statement of financial position) or a statement of cash flows seem likely for this sitting and could include discontinued activities, disposals and acquisitions and a joint venture/associate, while the issue of too much disclosure (see examiner article ‘Bin the clutter’), management commentary, application of the definition of control, improvements in performance measurement, conceptual framework or leasing are possibilities for the discussion question.


Whilst we at BPP cannot give exam tips as such the following are areas of focus:

• The three strategic lenses, compared with emerging approach. Note RPM.

• PESTLE, 5 Forces and Diamond.

• Value Chain and Benchmarking

• The Cultural Web

• Stakeholders ( Mendelow)

• BCG, Strategy clock and Ashridge. Parent/SBU

• Ansoff and Lynch

• Minzberg

• Analysis management of change (Balogun and Hope

• Outsourcing and Harmon’s model

• E marketing and E Business

• Financial analysis (F2 and F5)

• Project Management ( All aspects).


There has been a syllabus addition this sitting this says:

“ Evaluate the role and limitations of cost accounting in strategy development and implementation with specific reference to the following:

1. Direct and Indirect costing

2. Overhead Apportionment

3. Activity Based costing.”

These are all aspects that should have been covered in F2 and F5. Of course the verb “Evaluate” means weigh up i.e advantages and disadvantages but the emphasis seems to be on the words Strategy development.

So as an example:

If overhead apportionment is incorrect then you might set wrong selling prices. This might lead to a reduction in profitability or loss of customers, a major negative strategic disadvantage for the company.

Impact could be lower dividends to shareholders or loss of market share.


Section A of the P4 exam will, from June 2013, contain one compulsory question; this 50 mark question will, inevitably, draw from a number of different syllabus areas. The examiner has said that he does not plan exams by referring to past exams (i.e. checking that the whole syllabus is being tested over the course of a number of exam sittings). This makes question spotting almost impossible. However we would expect section A questions to test core syllabus areas such as discounted cash flow and business valuations (both of which are likely to include cost of capital calculations) and hedging.

In section B (50 marks in total) you will need to choose two questions from a choice of three. Each question will be worth 25 marks, one of the questions may be entirely discussion based (but this is not guaranteed from June 2013). Commonly tested areas include risk management, the Black Scholes model and cost of capital calculations. Islamic finance is new to the syllabus and could feature as an aspect of a question.


Performance Analysis:

The examiner has indicated that his questions will require more skill in interpreting data and discussing strategies to improve performance rather than performing calculations. You may be asked to analysis performance v budgetary targets to identify underlying problems that a company needs to address. This analysis could include the use of activity-based approaches, learning curves or non-financial performance measures. Ensure you have read the article on Benchmarking published in September 2012.

‘Beyond budgeting’ is an important area that can be tested either as a discussion or a numerical question.

Performance appraisal requires effective information systems so expect to be asked to identify the key strategic, tactical and operational information requirements of a business or the implications of introducing a new system on performance management.

Risk Analysis:

Analysis of the risk of a new proposal could include numerical techniques such as expected values and probabilities but also strategic frameworks such as PEST analysis and Porter could feature here.

Strategic Performance Measures in the Private Sector:

Divisional performance measurement is another key area; ROI, RI, EVA, NPV, share price movement or even costs of quality could feature here and transfer pricing could feature as an aspect of these questions.

Reward Systems:

HR issues are new to the syllabus from June 2011 and the examiner is interested in the impact of reward systems on performance management. Ensure you have read the article published January 2013 on Reward Schemes for Employees and Management.

Alternative Views of Performance Measurement:

Questions are commonly set that require a good understanding of the balanced scorecard, the building blocks model and the performance pyramid. Questions will often require you to analyse data that has been collected using one of these models. The balanced scorecard and the buildings blocks model are due to be tested again.

Performance Hierarchy:

Linking strategic decisions to mission statements or suggesting strategic options using models such as Ansoff’s matrix or the BCG matrix lend themselves to questions containing a mixture of financial and discursive elements that could easily include a simple NPV or profit analysis.

P6 (UK)

The exam will comprise two compulsory questions within Section A which will both be of a case study style. The first question will be 35 marks in length and will contain four marks for professional skills. The second will be for 25 marks in total and will contain no professional skills marks. One of these questions will focus on personal tax issues and the other will focus on corporate tax issues.

Section B will comprise three questions, each of 20 marks in length of which only two are to be answered. These will be in a more succinct, note form style.

The whole syllabus is examinable throughout the paper.

The paper will examine candidates’ ability to analyse and evaluate the tax implications of various situations, numerical calculations will only be required to assist in producing an answer and no purely numerical questions will be set.

Groups of companies, unincorporated business, capital gains tax versus inheritance tax, overseas aspects are regularly examined topics.

P7 (int)

We expect that the P7 exam in June will mirror previous sittings, with two compulsory questions making up the majority of the marks on offer and a choice of two from three optional questions. For exams in 2013 and beyond, the compulsory questions will be fixed at 35 marks and 25 marks for Questions 1 and 2 respectively, while the optional questions will each score 20 marks.

For this sitting, you can expect a planning scenario in the compulsory section which should draw on article content recently published by the P7 examiner, while we expect that optional questions will again test audit reports, ethical issues and practice-related matters. Candidates should also take heed of the examiner’s recent advice on exam technique for P7 and assurance engagements when preparing for this exam.