R34308F CIMA - PDF, Page 1-80 at Normalize

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Lecember 2008
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vith seismic shits occurring in the wor|d's economy,
coup|ed with acce|erating concerns about the
sustainabi|ity o our p|anet, never beore has there been
a greater need or organisations to train and deve|op their
peop|e to manage the impact o these changes.
vith this revised qua|ication ClMA remains true to its
|ong and proud history o providing nance proessiona|s
with a dierence <aZkm^k^]FZgZ`^f^gm:\\hngmZgml
who combine management and nance s|i||s in a
unique way and who u||y understand the businesses they
are wor|ing in. vhi|e we respect and |earn |essons rom
the past, through this qua|ication we prepare our uture
members to be ocused on the uture. driving va|ue,
managing perormance, understanding how organisations
are best |ed and inspired, and he|ping to sustain vibrant
business and government. ve provide a strong grounding
in internationa| accounting and nancia| reporting which
is comparab|e to that oered by a|| o our competitors.
ln addition we oer strategic ris| management, business
strategy and much more.
ClMA now designs its qua|ications in what we be|ieve
to be a unique way. ased on rigorous internationa|
primary research with a|| o our |ey sta|eho|ders and
invo|ving the participation o over 6,000 individua|s and
organisations members, students, emp|oyers (both
existing and potentia|), ClMA tuition partners, universities
and our examiner and mar|er team we have designed
a proessiona| nance training and deve|opment so|ution
that is second to none.
l commend this revised ClMA lroessiona| Qua|ication to
you. lt wi|| be examined or the rst time in 2010, so there
is p|enty o time to absorb the exciting changes contained
in the pages that o||ow.
ours sincere|y
kobert C. Je||y
Lirector o Lducation
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kobert C. Je||y
Li ct Ld atio
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01 Structure o the ClMA qua|ication
02 Sy||abus guidance
03 1he u|| sy||abus operationa| |eve|
04 1he u|| sy||abus management |eve|
05 1he u|| sy||abus strategic |eve|
06 1he u|| sy||abus 1est o lroessiona| Competence
in Management Accounting
07 1he examination timetab|e
08 1he transition arrangements or students
09 lrogramme design and the lnternationa| Lducation Standards
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1o qua|iy as a Chartered Management Accountant under the
2010 ClMA qua|ication, an app|icant must.
meet the entry requirements or the lroessiona|
Chartered Management Accounting qua|ication,
register as a student with ClMA,
study or, sit and pass nine examinations, as dened
within the sy||abus,
achieve the requirements o the 1est o lroessiona|
Competence in Management Accounting, inc|uding
lart A lnitia| lroessiona| Leve|opment vor| ased
lractica| Lxperience and lart Case Study Lxamination,
as dened within the sy||abus.
1o gain entry to the lroessiona| Chartered Management
Accounting qua|ication 2010, app|icants must be ho|ders
o ClMA's Certicate in usiness Accounting or an approved
exempting qua|ication.
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1he structure o the qua|ication and sy||abus sub|ects is shown on
the o||owing diagram.
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Sub|ects within each |earning pi||ar o the qua|ication are designed
to be sequentia|, rom operationa| to strategic |eve|, encouraging
the progressive deve|opment o |now|edge, techniques and s|i||s.
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vithin each |earning pi||ar, students are advised to sit and pass
the operationa| |eve| sub|ect examination beore sitting the
management |eve| sub|ect. However, examinations rom dierent
|earning pi||ars, at either operationa| or management |eve|, may be
sat concurrent|y. Students are recommended to sit no more than
three examinations at any sing|e diet, in order to optimise
the probabi|ity o success.
1he pass mar| or each o the operationa| and management |eve|
sub|ect examinations is 50% and permanent credit is awarded or
any paper in which the candidate scores 50% or more.
Students must pass a|| operationa| and management |eve| sub|ect
examinations, in each |earning pi||ar, beore attempting the
strategic |eve| sub|ects.
On successu| comp|etion o a|| operationa| |eve| sub|ects, students
are awarded the ClMA Lip|oma in Management Accounting.
On successu| comp|etion o a|| management |eve| sub|ects,
students are awarded the ClMA Advanced Lip|oma in
Management Accounting.
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vhen attempting the strategic |eve| sub|ects, students must sit
a|| three examination papers (one rom each |earning pi||ar lapers
L3, l3 and l3) together at the rst sitting. At any subsequent
examination attempts, these papers may be ta|en in any order
and combination.
1he pass mar| or each o the strategic |eve| sub|ect examinations
is 50% and permanent credit is awarded or any paper in which the
candidate scores 50% or more.
Students must pass a|| three strategic |eve| sub|ect examinations
beore attempting the 1est o lroessiona| Competence in
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1he 1est o lroessiona| Competence in Management Accounting
comprises two component parts that must both be achieved in
order to comp|ete the test. Credits are used to measure success,
rather than mar|s. 1o pass the 1est o lroessiona| Competence in
Management Accounting, students must achieve an aggregated
minimum o 75 credits comprising a minimum o 50 credits or
lart A (maximum 50 credits) and a minimum o 25 credits or
lart (maximum o 50 credits).
Students are advised to underta|e lart A and lart concurrent|y,
a|though either can be ta|en in any order once a|| strategic |eve|
examinations have been comp|eted. 1he overa|| resu|t or the 1est
o lroessiona| Competence in Management Accounting can on|y
be given when both component parts have been comp|eted.
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lnitia| lroessiona| Leve|opment vor| ased lractica| Lxperience
(maximum 50 credits)
Students must prepare and submit a 'ClMA Career lro|e' or
assessment o their persona| wor| based practica| experience and
s|i||s deve|opment. An approved Career lro|e is awarded 50 credits
the amount needed to meet the requirements or lart A o the
1est o lroessiona| Competence in Management Accounting.
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Case Study Lxamination (maximum 50 credits)
Students must sit and pass the Case Study Lxamination a three
hour assessment o competence, comp|eted within a supervised
examination environment. 25 credits must be awarded to meet
the minimum requirements or lart o the 1est o lroessiona|
Competence in Management Accounting.
On successu| comp|etion o the 1est o lroessiona| Competence in
Management Accounting, students app|y to be e|ected as members
o the Chartered lnstitute o Management Accountants.
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1he aims o the sy||abus or the ClMA lroessiona| Chartered
Management Accounting qua|ication 2010 are.
1o provide or the institute, an adequate basis or assuring
society that those admitted to membership are competent
to act as management accountants or entities, whether in
manuacturing, commercia| or service organisations, in the
pub|ic or private sectors o the economy.
1o enab|e the institute to examine whether prospective
members have an adequate |now|edge, understanding and
mastery o the stated body o |now|edge and s|i||s.
1o enab|e the institute to assess whether prospective members
have comp|eted initia| proessiona| deve|opment and acquired
the necessary wor| based practica| experience and s|i||s.
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1he sy||abus comprises three |earning pi||ars.
Lnterprise pi||ar
lerormance pi||ar
linancia| pi||ar
Lach |earning pi||ar is divided into three progressive |eve|s.
Operationa| |eve|
Management |eve|
Strategic |eve|
vithin each |earning pi||ar there are three sy||abus sub|ects, each
sub|ect being positioned at one o the three progressive |eve|s. Lach
o the nine sub|ect examinations has a duration o three hours, with
a urther 20 minutes o pre-examination reading time. 1he pass
mar| or each o these examinations is 50%.
ln addition to comp|eting a|| examinations within the three |earning
pi||ars, students must successu||y achieve the requirements o
the 1est o lroessiona| Competence in Management Accounting,
inc|uding lart A lnitia| lroessiona| Leve|opment vor| ased
lractica| Lxperience and lart Case Study Lxamination.
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Lach sub|ect within the three |earning pi||ars o the sy||abus
is divided into a number o broad sy||abus topics. 1he topics
contain one or more |ead |earning outcomes, re|ated component
|earning outcomes and indicative |now|edge content.
A |earning outcome has two main purposes.
(a) to dene the s|i|| or abi|ity that a we||-prepared candidate
shou|d be ab|e to exhibit in the examination,
(b) to demonstrate the approach |i|e|y to be ta|en by examiners
in examination questions.
1he |earning outcomes are part o a hierarchy o |earning
ob|ectives. 1he verbs used at the beginning o each |earning
outcome re|ate to a specic |earning ob|ective e.g,
>oZenZm^ perormance using xed and exib|e budget reports.
1he verb 'ôZenZm^' indicates a high, |eve| 5, |earning ob|ective.
ecause |earning ob|ectives are hierarchica|, it is expected that at
this |eve|, students wi|| have |now|edge o xed and exib|e budget
techniques, to be ab|e to app|y them and assess perormance using
re|evant reports.
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vhat you are expected to |now. List
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Lxpress, u||y or c|ear|y, the detai|s/acts o.
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vhat you are expected to understand. Lescribe
Listinguish
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High|ight the dierences between.
Ma|e c|ear or inte||igib|e/state the meaning or purpose o.
kecognise, estab|ish or se|ect ater consideration.
Use an examp|e to describe or exp|ain something.
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How you are expected to app|y
your |now|edge.
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lrepare
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Ascertain or rec|on mathematica||y.
lrove with certainty or exhibit by practica| means.
Ma|e or get ready or use.
Ma|e or prove consistent/compatib|e.
lind an answer to.
Arrange in a tab|e.
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How you are expected to ana|yse the
detai| o what you have |earned.
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Compare and contrast
Construct
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lnterpret
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Lxamine in detai| the structure o.
l|ace into a dened c|ass or division.
Show the simi|arities and/or dierences between.
ui|d up or compi|e.
Lxamine in detai| by argument.
1rans|ate into inte||igib|e or ami|iar terms.
l|ace in order o priority or sequence or action.
Create or bring into existence.
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How you are expected to use your
|earning to eva|uate, ma|e decisions
or recommendations.
Advise
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Appraise or assess the va|ue o.
lropose a course o action.
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1he o||owing tab|e |ists the |earning ob|ectives and the verbs that appear in the sy||abus |earning outcomes and examination questions.
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vithin a sy||abus sub|ect, a percentage weighting is shown against
each section topic and is intended as a guide to the proportion o
study time each topic requires.
lt is essentia| that a|| topics in the sy||abus are studied, since any
sing|e examination question may examine more than one topic,
or carry a higher proportion o mar|s than the percentage study
time suggested.
1he weightings do not speciy the number o mar|s that wi|| be
a||ocated to topics in the examination.
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A. lnteracting with the Competitive Lnvironment 20%
. Change Management 20%
C. Lva|uation o Strategic Options 30%
L. lmp|ementation o Strategic l|ans 30%
A. Strategic Management and Assessing the Competitive Lnvironment 30%
. lro|ect Management 40%
C. Management o ke|ationships 30%
A. 1he C|oba| usiness Lnvironment 20%
. lnormation Systems 20%
C. Operations Management 20%
L. Mar|eting 20%
L. Managing Human Capita| 20%
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A. Croup linancia| Statements 35%
. lssues in kecognition and Measurement 20%
C. Ana|ysis and lnterpretation o linancia| Accounts 35%
L. Leve|opments in Lxterna| keporting 10%
A. lormu|ation o linancia| Strategy 25%
. linancia| Lecisions 30%
C. lnvestment Lecisions and lro|ect Contro| 45%
A. lrincip|es o usiness 1axation 25%
. kegu|ation and Lthics o linancia| keporting 15%
C. linancia| Accounting and keporting 60%
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A. Management Contro| Systems 10%
. kis| and lnterna| Contro| 25%
C. keview and Audit o Contro| Systems 15%
L. Management o linancia| kis| 35%
L. kis| and Contro| in lnormation Systems 15%
A. lricing and lroduct Lecisions 30%
. Cost l|anning and Ana|ysis or Competitive Advantage 30%
C. udgeting and Management Contro| 20%
L. Contro| and lerormance Measurement o kesponsibi|ity Centres 20%
A. Costing Accounting Systems 30%
. lorecasting and udgeting 1echniques 10%
C. lro|ect Appraisa| 25%
L. Lea|ing with Uncertainty in Ana|ysis 15%
L. Managing Short 1erm linance 20%
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1he three sy||abus sub|ects within each |earning pi||ar are designed
to deve|op |now|edge and s|i||s in a progressive manner. Students
are expected to study and pass the operationa| |eve| paper in any
sing|e pi||ar beore tac||ing the management |eve| paper in that
same pi||ar. lt is however possib|e to be concurrent|y studying and
sitting an operationa| |eve| paper in one pi||ar and a management
|eve| paper in another pi||ar. Students may choose to sit one, two
or three examination papers at any sing|e examination diet.
A|| operationa| and management |eve| sub|ect examinations,
in each |earning pi||ar, must be successu||y comp|eted beore
attempting strategic |eve| sub|ects.
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A|| three sy||abus sub|ects at strategic |eve| must be studied
concurrent|y, since students must sit a|| three examination
papers (L3, l3 and l3) together at the rst sitting. 1hese papers
must a|| be successu||y comp|eted beore attempting the 1est o
lroessiona| Competence in Management Accounting.
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14 1est o lroessiona| Competence in Management Accounting
On successu| comp|etion o a|| three strategic |eve| examinations,
students must prepare or and pass each part o the two part 1est
o lroessiona| Competence in Management Accounting. 1he two
parts are.
lart A lnitia| lroessiona| Leve|opment vor| ased
lractica| Lxperience (maximum 50 credits)
lart Case Study Lxamination (maximum 50 credits)
Credits are used to measure success, rather than mar|s and to pass
the 1est o lroessiona| Competence in Management Accounting,
students must achieve an aggregated minimum o 75 credits
comprising a minimum o 50 credits or lart A (maximum 50 credits)
and a minimum o 25 credits or lart (maximum o 50 credits).
ClMA recommends that students underta|e lart A and lart
concurrent|y, a|though either can be ta|en in any order. 1he
aggregated resu|t or 14 1est o lroessiona| Competence
in Management Accounting, can on|y be given when both
component parts have been comp|eted.
F^f[^klabi
On successu| comp|etion o the 1est o lroessiona| Competence
in Management Accounting, students wi|| app|y to be e|ected as
members o the Chartered lnstitute o Management Accountants.
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1he examinations wi|| be set in accordance with re|evant
lnternationa| Accounting Standards and lnternationa| linancia|
keporting Standards, issued up to and inc|uding 1 Lecember
preceding the examination concerned. 1his date is particu|ar|y
re|evant to laper l1 linancia| Operations and laper l2
linancia| Management.
1his date o up to and inc|uding 1 Lecember preceding the
examination a|so app|ies to materia| contained in linancia|
keporting Lxposure Lrats.
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Students are advised to reer to the notice o examinab|e |egis|ation
pub|ished regu|ar|y in ClMA's magazine (linancia| Management),
the student e-news|etter (ve|ocity) and on the ClMA website, to
ensure they are up-to-date.
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Students are advised to manage their time strict|y when answering
questions in examinations. 1he time a||ocated to read, answer and
review the answer to a question, shou|d be proportiona| to the
maximum mar|s avai|ab|e or that question. lor examp|e, a short
answer question worth 5 mar|s, within a 3 hour examination where
a tota| o 100 mar|s are avai|ab|e, shou|d be a||ocated a maximum
o 9 minutes.
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A|| sub|ects and examination papers in the ClMA lroessiona|
Chartered Management Accounting qua|ication are prexed with.
a |etter (L, l or l) to indicate the |earning pi||ar,
a number (1, 2 or 3) to indicate the |eve|,
where they are positioned within the qua|ication structure. 1he
1est o lroessiona| Competence in Management Accounting is
prexed with 14 to indicate its position at |eve| 4.
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ke|evant ormu|ae wi|| be inc|uded within the appropriate
examination papers and mathematica| tab|es re|evant to the
sub|ect wi|| be identied. 1hese wi|| be pub|ished on the
ClMA website.
B MZqZmbhg
Lata required or use when answering examination questions
invo|ving ca|cu|ations or taxation (primari|y within papers l1,
l2 and l3), wi|| be pub|ished on the ClMA website beore each
examination diet. 1he data wi|| a|so be inc|uded within the
appropriate examination papers.
12
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1he sy||abus comprises the o||owing topics and study weightings.
: 1he C|oba| +)
usiness Lnvironment
; lnormation Systems +)
< Operations Management +)
= Mar|eting +)
> Managing Human Capita| +)
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1his paper addresses severa| unctiona| areas o business, as we||
as introducing candidates to the economic, socia| and po|itica|
context o internationa| business. lor each o the sections dea|ing
with inormation systems, operations, mar|eting and managing
human capita|, the |earning requirements a|ert students to ma|or
deve|opments in the e|d as we|| as too|s and techniques
important to each unctiona| area.
A
E
D
C
B
1his section sets out the specic sy||abus or each o the three
papers at the operationa| |eve| o the qua|ication. However, it is
imp|icit in each case, that materia| inc|uded in the sy||abus or any
o the papers within the ClMA Certicate in usiness Accounting
qua|ication, may a|so be re|evant or the purposes o assessment,
in re|ated sub|ects. 1he sy||abus or the ClMA Certicate in usiness
Accounting qua|ication can be viewed on the ClMA website.
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E^Z] <hfihg^gm
1. exp|ain the socia|, po|itica| and
economic context o business.
(a) exp|ain the emergence o ma|or economies in Asia and Latin America,
(b) exp|ain the emergence and importance o outsourcing and oshoring,
(c) exp|ain the impact o internationa| macroeconomic deve|opments (e.g. |ong-term
shits in trade ba|ances), on the organisation's competitive environment.
Cross-cu|tura| management and dierent orms o business organisation.
Lmerging mar|et mu|tinationa|s.
Libera|isation and economic nationa|ism.
Outsourcing and oshoring.
Ma|or economic systems inc|uding US, Luropean and transition economies.
Nationa| account ba|ances (especia||y rom internationa| trade), monetary po|icy and
their impact on mar|ets.
2. ana|yse the re|ationship between
the interna| governance o the rm
and externa| sources o governance
and regu|ation.
(a) exp|ain the princip|es and purpose o corporate socia| responsibi|ity and the
princip|es o good corporate governance in an internationa| context,
(b) ana|yse re|ationships among business, society and government in nationa|
and regiona| contexts,
(c) app|y too|s o country and po|itica| ris| ana|ysis,
(d) discuss the nature o regu|ation and its impact on the rm.
Corporate governance, inc|uding sta|eho|ders and the ro|e o government.
lrincip|es o corporate socia| responsibi|ity and the scope or internationa| variation,
e.g. between deve|oped and deve|oping economies.
usiness-government re|ations in deve|oped and deve|oping economies.
kegu|ation in the nationa| and internationa| context and its impact on the rm.
ko|e o institutions and governance in economic growth.
Corporate po|itica| activity in deve|oped and deve|oping mar|ets.
Country and po|itica| ris|.
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13
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1here wi|| be a written examination paper o three hours, p|us
20 minutes o pre-examination question paper reading time. 1he
examination paper wi|| have the o||owing sections.
Section A 20 mar|s
A variety o compu|sory ob|ective test questions, each worth
between two and our mar|s. Mini scenarios may be given, to which
a group o questions re|ate.
Section 30 mar|s
Six compu|sory short answer questions, each worth ve mar|s. A
short scenario may be given, to which some or a|| questions re|ate.
Section C 50 mar|s
One or two compu|sory questions. Short scenarios may be given, to
which questions re|ate.
E^Z] <hfihg^gm
1. exp|ain the socia|, po|itica| and
economic context o business.
(a) exp|ain the emergence o ma|or economies in Asia and Latin America,
(b) exp|ain the emergence and importance o outsourcing and oshoring,
(c) exp|ain the impact o internationa| macroeconomic deve|opments (e.g. |ong-term
shits in trade ba|ances), on the organisation's competitive environment.
Cross-cu|tura| management and dierent orms o business organisation.
Lmerging mar|et mu|tinationa|s.
Libera|isation and economic nationa|ism.
Outsourcing and oshoring.
Ma|or economic systems inc|uding US, Luropean and transition economies.
Nationa| account ba|ances (especia||y rom internationa| trade), monetary po|icy and
their impact on mar|ets.
2. ana|yse the re|ationship between
the interna| governance o the rm
and externa| sources o governance
and regu|ation.
(a) exp|ain the princip|es and purpose o corporate socia| responsibi|ity and the
princip|es o good corporate governance in an internationa| context,
(b) ana|yse re|ationships among business, society and government in nationa|
and regiona| contexts,
(c) app|y too|s o country and po|itica| ris| ana|ysis,
(d) discuss the nature o regu|ation and its impact on the rm.
Corporate governance, inc|uding sta|eho|ders and the ro|e o government.
lrincip|es o corporate socia| responsibi|ity and the scope or internationa| variation,
e.g. between deve|oped and deve|oping economies.
usiness-government re|ations in deve|oped and deve|oping economies.
kegu|ation in the nationa| and internationa| context and its impact on the rm.
ko|e o institutions and governance in economic growth.
Corporate po|itica| activity in deve|oped and deve|oping mar|ets.
Country and po|itica| ris|.
14
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E^Z] <hfihg^gm
1. discuss the wider business context
within which inormation
systems operate.
(a) identiy the va|ue o inormation and inormation systems organisations,
(b) discuss the reasons or organisations' increased dependence on inormation systems,
(c) discuss the transormation o organisations through techno|ogy.
1he ro|e o inormation systems in organisations.
Lmerging inormation system trends in organisations (e.g. Lnterprise-wide systems, |now|edge management systems,
customer re|ationship management systems, e.g. L-business, veb 2.0 too|s).
lnormation techno|ogy enab|ed transormation, the emergence o new orms o organisation.
Ceographica||y dispersed (virtua|) teams, ro|e o inormation systems in virtua| teams and cha||enges or virtua| co||aboration.
2. ana|yse how inormation systems
can be imp|emented in support o
the organisation's strategy.
(a) discuss ways or overcoming prob|ems in inormation system imp|ementation,
(b) discuss ways o organising and managing inormation system activities
in the context o the wider organisation.
Assessing the costs and benets o inormation systems, criteria or eva|uating inormation systems.
lrivacy and security.
System changeover methods (i.e. direct, para||e|, pi|ot and phased).
lnormation system imp|ementation as a change management process, avoiding prob|ems o non-usage and resistance.
lnormation system outsourcing (dierent types o sourcing strategies, c|ient-vendor re|ationships).
A|igning inormation systems with business strategy (e.g. strategic importance o inormation systems, inormation
systems or competitive advantage, inormation systems or competitive necessity).
>*<'HI>K:MBHGLF:G:@>F>GM!+)"
E^Z] <hfihg^gm
1. exp|ain the re|ationship o operations
management to other aspects o the
organisation's operations.
(a) exp|ain the shit rom price-based to re|ationa| procurement and operations,
(b) exp|ain the re|ationship o operations and supp|y management
to the competitiveness o the rm,
(c) exp|ain the particu|ar issues surrounding operations management in services,
(d) exp|ain the importance o sustainabi|ity in operations management.
Supp|y chain management as a strategic process.
An overview o operations strategy and its importance to the rm.
Supp|y chains in competition with each other, ro|e o supp|y networ|s, demand networ|s as an evo|ution o supp|y chains.
Lesign o products/services and processes and how this re|ates to operations and supp|y.
1he concept o sustainabi|ity in operations management.
2. app|y too|s and techniques o
operations management.
(a) app|y contemporary thin|ing in qua|ity management,
(b) exp|ain process design,
(c) app|y too|s and concepts o |ean management,
(d) i||ustrate a p|an or the imp|ementation o a qua|ity programme,
(e) describe ways to manage re|ationships with supp|iers.
Lierent methods o qua|ity measurement (e.g. Servqua|).
Approaches to qua|ity management, inc|uding 1ota| Qua|ity Management (1QM), various ritish and
Luropean Union systems as we|| as statistica| contro| processes.
Lxterna| qua|ity standards.
Systems used in operations management. Manuacturing kesource l|anning ll (Mklll),
Optimized lroduction 1echniques (Ol1) and Lnterprise kesource l|anning (Lkl).
Use o process maps to present the ow o inormation and product across supp|y chains and networ|s.
Methods or managing inventory, inc|uding continuous inventory systems (e.g. Lconomic Order Quantity, LOQ),
periodic inventory systems and the AC system (Note. AC is not an acronym, A reers to high va|ue, to medium and C
to |ow va|ue inventory).
Methods o managing operationa| capacity in product and service de|ivery (e.g. use o queuing theory,
orecasting, exib|e manuacturing systems).
App|ication o |ean techniques to services.
lractices o continuous improvement (e.g. Qua|ity circ|es, Kaizen, 5S, 6 Sigma).
1he characteristics o |ean production.
Criticisms and |imitations o |ean production.
Leve|oping re|ationships with supp|iers, inc|uding the use o supp|y porto|ios.
15
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E^Z] <hfihg^gm
1. discuss the wider business context
within which inormation
systems operate.
(a) identiy the va|ue o inormation and inormation systems organisations,
(b) discuss the reasons or organisations' increased dependence on inormation systems,
(c) discuss the transormation o organisations through techno|ogy.
1he ro|e o inormation systems in organisations.
Lmerging inormation system trends in organisations (e.g. Lnterprise-wide systems, |now|edge management systems,
customer re|ationship management systems, e.g. L-business, veb 2.0 too|s).
lnormation techno|ogy enab|ed transormation, the emergence o new orms o organisation.
Ceographica||y dispersed (virtua|) teams, ro|e o inormation systems in virtua| teams and cha||enges or virtua| co||aboration.
2. ana|yse how inormation systems
can be imp|emented in support o
the organisation's strategy.
(a) discuss ways or overcoming prob|ems in inormation system imp|ementation,
(b) discuss ways o organising and managing inormation system activities
in the context o the wider organisation.
Assessing the costs and benets o inormation systems, criteria or eva|uating inormation systems.
lrivacy and security.
System changeover methods (i.e. direct, para||e|, pi|ot and phased).
lnormation system imp|ementation as a change management process, avoiding prob|ems o non-usage and resistance.
lnormation system outsourcing (dierent types o sourcing strategies, c|ient-vendor re|ationships).
A|igning inormation systems with business strategy (e.g. strategic importance o inormation systems, inormation
systems or competitive advantage, inormation systems or competitive necessity).
E^Z] <hfihg^gm
1. exp|ain the re|ationship o operations
management to other aspects o the
(a) exp|ain the shit rom price-based to re|ationa| procurement and operations,
(b) exp|ain the re|ationship o operations and supp|y management
to the competitiveness o the rm,
(c) exp|ain the particu|ar issues surrounding operations management in services,
(d) exp|ain the importance o sustainabi|ity in operations management.
Supp|y chain management as a strategic process.
An overview o operations strategy and its importance to the rm.
Supp|y chains in competition with each other, ro|e o supp|y networ|s, demand networ|s as an evo|ution o supp|y chains.
Lesign o products/services and processes and how this re|ates to operations and supp|y.
1he concept o sustainabi|ity in operations management.
2. app|y too|s and techniques o
operations management.
(a) app|y contemporary thin|ing in qua|ity management,
(b) exp|ain process design,
(c) app|y too|s and concepts o |ean management,
(d) i||ustrate a p|an or the imp|ementation o a qua|ity programme,
(e) describe ways to manage re|ationships with supp|iers.
Lierent methods o qua|ity measurement (e.g. Servqua|).
Approaches to qua|ity management, inc|uding 1ota| Qua|ity Management (1QM), various ritish and
Luropean Union systems as we|| as statistica| contro| processes.
Lxterna| qua|ity standards.
Systems used in operations management. Manuacturing kesource l|anning ll (Mklll),
Optimized lroduction 1echniques (Ol1) and Lnterprise kesource l|anning (Lkl).
Use o process maps to present the ow o inormation and product across supp|y chains and networ|s.
Methods or managing inventory, inc|uding continuous inventory systems (e.g. Lconomic Order Quantity, LOQ),
periodic inventory systems and the AC system (Note. AC is not an acronym, A reers to high va|ue, to medium and C
to |ow va|ue inventory).
Methods o managing operationa| capacity in product and service de|ivery (e.g. use o queuing theory,
orecasting, exib|e manuacturing systems).
App|ication o |ean techniques to services.
lractices o continuous improvement (e.g. Qua|ity circ|es, Kaizen, 5S, 6 Sigma).
1he characteristics o |ean production.
Criticisms and |imitations o |ean production.
Leve|oping re|ationships with supp|iers, inc|uding the use o supp|y porto|ios.
16
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E^Z] <hfihg^gm
1. exp|ain deve|opments in mar|eting. (a) exp|ain the mar|eting concept, and the a|ternatives to it,
(b) describe the mar|eting environment o a range o organisations,
(c) exp|ain mar|eting in a not-or-prot context,
(d) exp|ain the socia| context o mar|eting behaviour,
(e) describe theories o consumer behaviour.
1he mar|eting concept as a business phi|osophy.
1he mar|eting environment, inc|uding societa|, economic, techno|ogica|, po|itica| and |ega| actors aecting mar|eting.
Mar|eting in not-or-prot organisations (i.e. charities, non-governmenta| organisations, the pub|ic sector).
1heories o consumer behaviour (e.g. socia| interaction theory), as we|| as actors aecting buying decisions,
types o buying behaviour and stages in the buying process.
Socia| mar|eting and corporate socia| responsibi|ity.
2. app|y too|s and techniques
used in support o the
organisation's mar|eting.
(a) exp|ain the re|ationships between mar|et research, mar|et
segmentation, targeting and positioning,
(b) app|y too|s within each area o the mar|eting mix,
(c) describe the business contexts within which mar|eting princip|es can be app|ied,
(d) describe the mar|et p|anning process,
(e) exp|ain the ro|e o branding and brand equity.
Mar|et research, inc|uding data gathering techniques and methods o ana|ysis.
Segmentation and targeting o mar|ets, and positioning o products within mar|ets.
How business to business (2) mar|eting diers rom business to consumer (2C) mar|eting in its dierent orms
(i.e. consumer mar|eting, services mar|eting, direct mar|eting, interactive mar|eting, e-mar|eting, interna| mar|eting).
lromotiona| too|s and the promotion mix.
1he 'service extension' to the mar|eting mix.
Levising and imp|ementing a pricing strategy.
Lxperientia| mar|eting.
Mar|eting communications, inc|uding vira|, guerri||a and other indirect orms o mar|eting.
Listribution channe|s and methods or mar|eting campaigns.
1he ro|e o mar|eting in the business p|an o the organisation.
rand image and brand va|ue.
lroduct deve|opment and product/service |ie-cyc|es.
lnterna| mar|eting as the process o training and motivating emp|oyees so as to support the organisation's externa| mar|eting activities.
1he dierences and simi|arities in the mar|eting o products, services and experiences.
lroduct porto|ios and the product mix.
>*>'F:G:@BG@ANF:G<:IBM:E!+)"
E^Z] <hfihg^gm
1. exp|ain the re|ationship o Human
kesources (Hk) to the
(a) exp|ain how Hk theories and activities can contribute to the
success o the organisation,
(b) exp|ain the importance o ethica| behaviour in business genera||y
and or the |ine manager and their activities.
1heories o Human kesource Management re|ating to abi|ity, motivation and opportunity.
1he psycho|ogica| contract and its importance to retention.
1he re|ationship o the emp|oyee to other e|ements o the business.
lersona| business ethics and the undamenta| princip|es (lart A) o the ClMA Code o Lthics or lroessiona| Accountants.
2. discuss the activities associated with
the management o human capita|.
(a) exp|ain the Hk activities associated with deve|oping the abi|ity o emp|oyees,
(b) discuss the Hk activities associated with the motivation o emp|oyees,
(c) describe the Hk activities associated with improving the opportunities
or emp|oyees to contribute to the rm,
(d) discuss the importance o the |ine manager in the imp|ementation o Hk practices,
(e) prepare an Hk p|an appropriate to a team.
lractices associated with recruiting and deve|oping appropriate abi|ities inc|uding recruitment and se|ection o sta using dierent
recruitment channe|s (i.e. interviews, assessment centres, inte||igence tests, aptitude tests, psychometric tests).
lssues re|ating to air and |ega| emp|oyment practices (e.g. recruitment, dismissa|, redundancy, and ways o managing these).
1he distinction between deve|opment and training and the too|s avai|ab|e to deve|op and train sta.
1he design and imp|ementation o induction programmes.
lractices re|ated to motivation inc|uding lssues in the design o reward systems (e.g. the ro|e o incentives, the uti|ity
o perormance-re|ated pay, arrangements or |now|edge wor|ers, exib|e wor| arrangements).
1he importance o appraisa|s, their conduct and their re|ationship to the reward system.
lractices re|ated to the creation o opportunities or emp|oyees to contribute to the organisation inc|uding |ob design,
communications, invo|vement procedures and appropriate e|ements o negotiating and bargaining.
lrob|ems in imp|ementing an Hk p|an appropriate to a team and ways to manage this.
Hk in dierent organisationa| orms (e.g. pro|ect based, virtua| or networ|ed rms) and dierent organisationa| contexts.
lreparation o an Hk p|an (e.g. lorecasting personne| requirements, retention, absence and |eave, wastage).
17
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E^Z] <hfihg^gm
1. exp|ain deve|opments in mar|eting. (a) exp|ain the mar|eting concept, and the a|ternatives to it,
(b) describe the mar|eting environment o a range o organisations,
(c) exp|ain mar|eting in a not-or-prot context,
(d) exp|ain the socia| context o mar|eting behaviour,
(e) describe theories o consumer behaviour.
1he mar|eting concept as a business phi|osophy.
1he mar|eting environment, inc|uding societa|, economic, techno|ogica|, po|itica| and |ega| actors aecting mar|eting.
Mar|eting in not-or-prot organisations (i.e. charities, non-governmenta| organisations, the pub|ic sector).
1heories o consumer behaviour (e.g. socia| interaction theory), as we|| as actors aecting buying decisions,
types o buying behaviour and stages in the buying process.
Socia| mar|eting and corporate socia| responsibi|ity.
2. app|y too|s and techniques
used in support o the
organisation's mar|eting.
(a) exp|ain the re|ationships between mar|et research, mar|et
segmentation, targeting and positioning,
(b) app|y too|s within each area o the mar|eting mix,
(c) describe the business contexts within which mar|eting princip|es can be app|ied,
(d) describe the mar|et p|anning process,
(e) exp|ain the ro|e o branding and brand equity.
Mar|et research, inc|uding data gathering techniques and methods o ana|ysis.
Segmentation and targeting o mar|ets, and positioning o products within mar|ets.
How business to business (2) mar|eting diers rom business to consumer (2C) mar|eting in its dierent orms
(i.e. consumer mar|eting, services mar|eting, direct mar|eting, interactive mar|eting, e-mar|eting, interna| mar|eting).
lromotiona| too|s and the promotion mix.
1he 'service extension' to the mar|eting mix.
Levising and imp|ementing a pricing strategy.
Lxperientia| mar|eting.
Mar|eting communications, inc|uding vira|, guerri||a and other indirect orms o mar|eting.
Listribution channe|s and methods or mar|eting campaigns.
1he ro|e o mar|eting in the business p|an o the organisation.
rand image and brand va|ue.
lroduct deve|opment and product/service |ie-cyc|es.
lnterna| mar|eting as the process o training and motivating emp|oyees so as to support the organisation's externa| mar|eting activities.
1he dierences and simi|arities in the mar|eting o products, services and experiences.
lroduct porto|ios and the product mix.
E^Z] <hfihg^gm
1. exp|ain the re|ationship o Human
kesources (Hk) to the
(a) exp|ain how Hk theories and activities can contribute to the
success o the organisation,
(b) exp|ain the importance o ethica| behaviour in business genera||y
and or the |ine manager and their activities.
1heories o Human kesource Management re|ating to abi|ity, motivation and opportunity.
1he psycho|ogica| contract and its importance to retention.
1he re|ationship o the emp|oyee to other e|ements o the business.
lersona| business ethics and the undamenta| princip|es (lart A) o the ClMA Code o Lthics or lroessiona| Accountants.
2. discuss the activities associated with
the management o human capita|.
(a) exp|ain the Hk activities associated with deve|oping the abi|ity o emp|oyees,
(b) discuss the Hk activities associated with the motivation o emp|oyees,
(c) describe the Hk activities associated with improving the opportunities
or emp|oyees to contribute to the rm,
(d) discuss the importance o the |ine manager in the imp|ementation o Hk practices,
(e) prepare an Hk p|an appropriate to a team.
lractices associated with recruiting and deve|oping appropriate abi|ities inc|uding recruitment and se|ection o sta using dierent
recruitment channe|s (i.e. interviews, assessment centres, inte||igence tests, aptitude tests, psychometric tests).
lssues re|ating to air and |ega| emp|oyment practices (e.g. recruitment, dismissa|, redundancy, and ways o managing these).
1he distinction between deve|opment and training and the too|s avai|ab|e to deve|op and train sta.
1he design and imp|ementation o induction programmes.
lractices re|ated to motivation inc|uding lssues in the design o reward systems (e.g. the ro|e o incentives, the uti|ity
o perormance-re|ated pay, arrangements or |now|edge wor|ers, exib|e wor| arrangements).
1he importance o appraisa|s, their conduct and their re|ationship to the reward system.
lractices re|ated to the creation o opportunities or emp|oyees to contribute to the organisation inc|uding |ob design,
communications, invo|vement procedures and appropriate e|ements o negotiating and bargaining.
lrob|ems in imp|ementing an Hk p|an appropriate to a team and ways to manage this.
Hk in dierent organisationa| orms (e.g. pro|ect based, virtua| or networ|ed rms) and dierent organisationa| contexts.
lreparation o an Hk p|an (e.g. lorecasting personne| requirements, retention, absence and |eave, wastage).
18
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: Cost Accounting ,)
Systems
; lorecasting and *)
udgeting 1echniques
< lro|ect Appraisa| +.
= Lea|ing with Uncertainty *.
in Ana|ysis
> Managing Short +)
1erm linance
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1his paper primari|y dea|s with the too|s and techniques that
generate inormation needed to eva|uate and contro| present and
pro|ected perormance. 1hus, orecasting |ey variab|es, recognising
uncertainties attached to uture events, is a basis or budget
construction, the budget is then used with costing systems to
eva|uate actua| perormance. lro|ect appraisa| re|ies simi|ar|y on
uture nancia| pro|ections to provide the inormation on which
managers can eva|uate expected perormance and actua| outcomes.
oth budgeting and pro|ect appraisa| emphasise the critica|
importance o optimising cash ow and the na| section o
the paper continues this theme rom the perspective o managing
wor|ing capita|.
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1. discuss costing methods and
their resu|ts.
(a) compare and contrast margina| (or variab|e), throughput and absorption
accounting methods in respect o prot reporting and stoc| va|uation,
(b) discuss a report which reconci|es budget and actua| prot using
absorption and/or margina| costing princip|es,
(c) discuss activity-based costing as compared with traditiona| margina|
and absorption costing methods, inc|uding its re|ative advantages and
disadvantages as a system o cost accounting,
(d) app|y standard costing methods, within costing systems, inc|uding the
reconci|iation o budgeted and actua| prot margins,
(e) exp|ain why and how standards are set in manuacturing and in service industries with
particu|ar reerence to the maximisation o eciency and minimisation o waste,
() interpret materia|, |abour, variab|e overhead, xed overhead and sa|es
variances, distinguishing between p|anning and operationa| variances,
(g) prepare reports using a range o interna| and externa| benchmar|s
and interpret the resu|ts,
(h) exp|ain the impact o |ust-in-time manuacturing methods on cost accounting and
the use o 'bac|-ush accounting' when wor|-in-progress stoc| is minima|.
Margina| (or variab|e), throughput and absorption accounting systems o prot reporting and stoc| va|uation.
Activity-based costing as a system o prot reporting and stoc| va|uation.
Criticisms o standard costing in genera| and in advanced manuacturing environments in particu|ar.
lntegration o standard costing with margina| cost accounting, absorption cost accounting and throughput accounting.
Manuacturing standards or materia|, |abour, variab|e overhead and xed overhead.
lrice/rate and usage/eciency variances or materia|s, |abour and variab|e overhead.
lurther subdivision o tota| usage/eciency variances into mix and yie|d components.
(Note. 1he ca|cu|ation o mix variances on both individua| and average va|uation bases is required).
lixed overhead expenditure and vo|ume variances. (Note. the subdivision o xed overhead vo|ume variance
into capacity and eciency e|ements wi|| not be examined).
l|anning and operationa| variances.
Standards and variances in service industries (inc|uding the phenomenon o 'McLona|dization'), pub|ic services (e.g. Hea|th),
(inc|uding the use o 'diagnostic re|ated' or 'reerence' groups), and the proessions (e.g. |abour mix variances in audit wor|).
Sa|es price and sa|es revenue/margin vo|ume variances (ca|cu|ation o the |atter on a unit basis re|ated to revenue, gross margin and
contribution margin). App|ication o these variances to a|| sectors, inc|uding proessiona| services and retai| ana|ysis.
lnterpretation o variances. interre|ationship, signicance.
enchmar|ing.
ac|-ush accounting in |ust-in-time production environments. 1he benets o |ust-in-time production, tota| qua|ity management
and theory o constraints and the possib|e impacts o these methods on cost accounting and perormance measurement.
I*:'<HLM:<<HNGMBG@LRLM>FL!,)"
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Section A 20 mar|s
between two and our mar|s. Mini scenarios may be given, to
which a group o questions re|ate.
Section 30 mar|s
Section C 50 mar|s
E^Z] <hfihg^gm
1. discuss costing methods and
their resu|ts.
(a) compare and contrast margina| (or variab|e), throughput and absorption
accounting methods in respect o prot reporting and stoc| va|uation,
(b) discuss a report which reconci|es budget and actua| prot using
absorption and/or margina| costing princip|es,
(c) discuss activity-based costing as compared with traditiona| margina|
and absorption costing methods, inc|uding its re|ative advantages and
disadvantages as a system o cost accounting,
(d) app|y standard costing methods, within costing systems, inc|uding the
reconci|iation o budgeted and actua| prot margins,
(e) exp|ain why and how standards are set in manuacturing and in service industries with
particu|ar reerence to the maximisation o eciency and minimisation o waste,
() interpret materia|, |abour, variab|e overhead, xed overhead and sa|es
variances, distinguishing between p|anning and operationa| variances,
(g) prepare reports using a range o interna| and externa| benchmar|s
and interpret the resu|ts,
(h) exp|ain the impact o |ust-in-time manuacturing methods on cost accounting and
the use o 'bac|-ush accounting' when wor|-in-progress stoc| is minima|.
Margina| (or variab|e), throughput and absorption accounting systems o prot reporting and stoc| va|uation.
Activity-based costing as a system o prot reporting and stoc| va|uation.
Criticisms o standard costing in genera| and in advanced manuacturing environments in particu|ar.
lntegration o standard costing with margina| cost accounting, absorption cost accounting and throughput accounting.
Manuacturing standards or materia|, |abour, variab|e overhead and xed overhead.
lrice/rate and usage/eciency variances or materia|s, |abour and variab|e overhead.
lurther subdivision o tota| usage/eciency variances into mix and yie|d components.
(Note. 1he ca|cu|ation o mix variances on both individua| and average va|uation bases is required).
lixed overhead expenditure and vo|ume variances. (Note. the subdivision o xed overhead vo|ume variance
into capacity and eciency e|ements wi|| not be examined).
l|anning and operationa| variances.
Standards and variances in service industries (inc|uding the phenomenon o 'McLona|dization'), pub|ic services (e.g. Hea|th),
(inc|uding the use o 'diagnostic re|ated' or 'reerence' groups), and the proessions (e.g. |abour mix variances in audit wor|).
Sa|es price and sa|es revenue/margin vo|ume variances (ca|cu|ation o the |atter on a unit basis re|ated to revenue, gross margin and
contribution margin). App|ication o these variances to a|| sectors, inc|uding proessiona| services and retai| ana|ysis.
lnterpretation o variances. interre|ationship, signicance.
enchmar|ing.
ac|-ush accounting in |ust-in-time production environments. 1he benets o |ust-in-time production, tota| qua|ity management
and theory o constraints and the possib|e impacts o these methods on cost accounting and perormance measurement.
20
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2. exp|ain the ro|e o Mkl and
Lkl systems.
(a) exp|ain the ro|e o Mkl and Lkl systems in supporting standard costing systems,
ca|cu|ating variances and aci|itating the posting o |edger entries.
Mkl and Lkl systems or resource p|anning and the integration o accounting unctions with other systems,
such as purchase ordering and production p|anning.
3. app|y princip|es o
environmenta| costing.
(a) app|y princip|es o environmenta| costing in identiying re|evant interna|ised costs
and externa|ised environmenta| impacts o the organisation's activities.
1ypes o interna|ised costs re|ating to the environment (e.g. emissions permits, taxes, waste disposa| costs) and |ey
externa|ised environmenta| impacts, especia||y carbon, energy and water usage. lrincip|es or associating such costs
and impacts with activities and output.
I*:'<HLM:<<HNGMBG@LRLM>FL!,)"\hgmbgn^]
E^Z] <hfihg^gm
1. exp|ain the purposes o orecasts,
p|ans and budgets.
(a) exp|ain why organisations prepare orecasts and p|ans,
(b) exp|ain the purposes o budgets, inc|uding p|anning, communication, co-ordination,
motivation, authorisation, contro| and eva|uation, and how these may conict.
1he ro|e o orecasts and p|ans in resource a||ocation, perormance eva|uation and contro|.
1he purposes o budgets and the budgeting process, and conicts that can arise (e.g. between budgets or rea|istic
p|anning and budgets based on 'hard to achieve' targets or motivation).
2. prepare orecasts o nancia| resu|ts. (a) ca|cu|ate pro|ected product/service vo|umes emp|oying appropriate
orecasting techniques,
(b) ca|cu|ate pro|ected revenues and costs based on product/service vo|umes,
pricing strategies and cost structures.
1ime series ana|ysis inc|uding moving tota|s and averages, treatment o seasona|ity, trend ana|ysis using regression
ana|ysis and the app|ication o these techniques in orecasting product and service vo|umes.
lixed, variab|e, semi-variab|e and activity-based categorisations o cost and their app|ication in pro|ecting nancia| resu|ts.
3. prepare budgets based on orecasts. (a) prepare a budget or any account in the master budget, based
on pro|ections/orecasts and manageria| targets,
(b) app|y a|ternative approaches to budgeting.
Mechanics o budget construction. |imiting actors, component budgets and the master budget, and their interaction.
A|ternative approaches to budget creation, inc|uding incrementa| approaches, zero-based budgeting and activity-based budgets.
I*;'?HK><:LMBG@:G=;N=@>MBG@M><AGBJN>L!*)"
21
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E^Z] <hfihg^gm
2. exp|ain the ro|e o Mkl and
Lkl systems.
(a) exp|ain the ro|e o Mkl and Lkl systems in supporting standard costing systems,
ca|cu|ating variances and aci|itating the posting o |edger entries.
Mkl and Lkl systems or resource p|anning and the integration o accounting unctions with other systems,
such as purchase ordering and production p|anning.
3. app|y princip|es o
environmenta| costing.
(a) app|y princip|es o environmenta| costing in identiying re|evant interna|ised costs
and externa|ised environmenta| impacts o the organisation's activities.
1ypes o interna|ised costs re|ating to the environment (e.g. emissions permits, taxes, waste disposa| costs) and |ey
externa|ised environmenta| impacts, especia||y carbon, energy and water usage. lrincip|es or associating such costs
and impacts with activities and output.
E^Z] <hfihg^gm
1. exp|ain the purposes o orecasts,
p|ans and budgets.
(a) exp|ain why organisations prepare orecasts and p|ans,
(b) exp|ain the purposes o budgets, inc|uding p|anning, communication, co-ordination,
motivation, authorisation, contro| and eva|uation, and how these may conict.
1he ro|e o orecasts and p|ans in resource a||ocation, perormance eva|uation and contro|.
1he purposes o budgets and the budgeting process, and conicts that can arise (e.g. between budgets or rea|istic
p|anning and budgets based on 'hard to achieve' targets or motivation).
2. prepare orecasts o nancia| resu|ts. (a) ca|cu|ate pro|ected product/service vo|umes emp|oying appropriate
orecasting techniques,
(b) ca|cu|ate pro|ected revenues and costs based on product/service vo|umes,
pricing strategies and cost structures.
1ime series ana|ysis inc|uding moving tota|s and averages, treatment o seasona|ity, trend ana|ysis using regression
ana|ysis and the app|ication o these techniques in orecasting product and service vo|umes.
lixed, variab|e, semi-variab|e and activity-based categorisations o cost and their app|ication in pro|ecting nancia| resu|ts.
3. prepare budgets based on orecasts. (a) prepare a budget or any account in the master budget, based
on pro|ections/orecasts and manageria| targets,
(b) app|y a|ternative approaches to budgeting.
Mechanics o budget construction. |imiting actors, component budgets and the master budget, and their interaction.
A|ternative approaches to budget creation, inc|uding incrementa| approaches, zero-based budgeting and activity-based budgets.
22
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1. prepare inormation to support
pro|ect appraisa|.
(a) exp|ain the processes invo|ved in ma|ing |ong-term decisions,
(b) app|y the princip|es o re|evant cash ow ana|ysis to |ong-run
pro|ects that continue or severa| years,
(c) ca|cu|ate pro|ect cash ows, accounting or tax and ination, and
app|y perpetuities to derive 'end o pro|ect' va|ue where appropriate,
(d) app|y activity-based costing techniques to derive approximate '|ong-run'
product or service costs appropriate or use in strategic decision ma|ing,
(e) exp|ain the nancia| consequences o dea|ing with |ong-run pro|ects, in
particu|ar the importance o accounting or the 'time va|ue o money',
() app|y sensitivity ana|ysis to cash ow parameters to identiy those to
which net present va|ue is particu|ar|y sensitive,
(g) prepare decision support inormation or management, integrating
nancia| and non-nancia| considerations.
1he process o investment decision ma|ing, inc|uding origination o proposa|s, creation o capita| budgets, go/no go decisions on
individua| pro|ects (where |udgements on qua|itative issues interact with nancia| ana|ysis), and post audit o comp|eted pro|ects.
ldentication and ca|cu|ation o re|evant pro|ect cash ows ta|ing account o ination, tax, and 'na|' pro|ect va|ue where appropriate.
Activity-based costing to derive approximate '|ong-run' costs appropriate or use in strategic decision ma|ing.
Need or and method o discounting.
Sensitivity ana|ysis to identiy the input variab|es that most aect the chosen measure o pro|ect worth (paybac|, Akk, Nlv or lkk).
ldentiying and integrating non-nancia| actors in |ong-term decisions.
Methods o dea|ing with particu|ar prob|ems. the use o annuities in comparing pro|ects with unequa| |ives and the protabi|ity
index in capita| rationing situations.
2. eva|uate pro|ect proposa|s. (a) eva|uate pro|ect proposa|s using the techniques o investment appraisa|,
(b) compare and contrast the a|ternative techniques o investment appraisa|,
(c) prioritise pro|ects that are mutua||y exc|usive, invo|ve unequa| |ives
and/or are sub|ect to capita| rationing.
1he techniques o investment appraisa|. paybac|, discounted paybac|, accounting rate o return, net present va|ue and
interna| rate o return.
App|ication o the techniques o investment appraisa| to pro|ect cash ows and eva|uation o the strengths and
wea|nesses o the techniques.
I*<'IKHC><M:IIK:BL:E!+."
E^Z] <hfihg^gm
1. ana|yse inormation to assess the
impact on decisions o variab|es
with uncertain va|ues.
(a) ana|yse the impact o uncertainty and ris| on decision mode|s that may be
based on re|evant cash ows, |earning curves, discounting techniques etc,
(b) app|y sensitivity ana|ysis to both short and |ong-run decision mode|s to
identiy variab|es that might have signicant impacts on pro|ect outcomes,
(c) ana|yse ris| and uncertainty by ca|cu|ating expected va|ues and standard
deviations together with probabi|ity tab|es and histograms,
(d) prepare expected va|ue tab|es,
(e) ca|cu|ate the va|ue o inormation,
() app|y decision trees.
1he nature o ris| and uncertainty.
Sensitivity ana|ysis in decision mode||ing and the use o computer sotware or "what i" ana|ysis.
Assignment o probabi|ities to |ey variab|es in decision mode|s.
Ana|ysis o probabi|istic mode|s and interpretation o distributions o pro|ect outcomes.
Lxpected va|ue tab|es and the va|ue o inormation.
Lecision trees or mu|ti-stage decision prob|ems.
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23
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1. prepare inormation to support
pro|ect appraisa|.
(a) exp|ain the processes invo|ved in ma|ing |ong-term decisions,
(b) app|y the princip|es o re|evant cash ow ana|ysis to |ong-run
pro|ects that continue or severa| years,
(c) ca|cu|ate pro|ect cash ows, accounting or tax and ination, and
app|y perpetuities to derive 'end o pro|ect' va|ue where appropriate,
(d) app|y activity-based costing techniques to derive approximate '|ong-run'
product or service costs appropriate or use in strategic decision ma|ing,
(e) exp|ain the nancia| consequences o dea|ing with |ong-run pro|ects, in
particu|ar the importance o accounting or the 'time va|ue o money',
() app|y sensitivity ana|ysis to cash ow parameters to identiy those to
which net present va|ue is particu|ar|y sensitive,
(g) prepare decision support inormation or management, integrating
nancia| and non-nancia| considerations.
1he process o investment decision ma|ing, inc|uding origination o proposa|s, creation o capita| budgets, go/no go decisions on
individua| pro|ects (where |udgements on qua|itative issues interact with nancia| ana|ysis), and post audit o comp|eted pro|ects.
ldentication and ca|cu|ation o re|evant pro|ect cash ows ta|ing account o ination, tax, and 'na|' pro|ect va|ue where appropriate.
Activity-based costing to derive approximate '|ong-run' costs appropriate or use in strategic decision ma|ing.
Need or and method o discounting.
Sensitivity ana|ysis to identiy the input variab|es that most aect the chosen measure o pro|ect worth (paybac|, Akk, Nlv or lkk).
ldentiying and integrating non-nancia| actors in |ong-term decisions.
Methods o dea|ing with particu|ar prob|ems. the use o annuities in comparing pro|ects with unequa| |ives and the protabi|ity
index in capita| rationing situations.
2. eva|uate pro|ect proposa|s. (a) eva|uate pro|ect proposa|s using the techniques o investment appraisa|,
(b) compare and contrast the a|ternative techniques o investment appraisa|,
(c) prioritise pro|ects that are mutua||y exc|usive, invo|ve unequa| |ives
and/or are sub|ect to capita| rationing.
1he techniques o investment appraisa|. paybac|, discounted paybac|, accounting rate o return, net present va|ue and
interna| rate o return.
App|ication o the techniques o investment appraisa| to pro|ect cash ows and eva|uation o the strengths and
wea|nesses o the techniques.
E^Z] <hfihg^gm
1. ana|yse inormation to assess the
impact on decisions o variab|es
with uncertain va|ues.
(a) ana|yse the impact o uncertainty and ris| on decision mode|s that may be
based on re|evant cash ows, |earning curves, discounting techniques etc,
(b) app|y sensitivity ana|ysis to both short and |ong-run decision mode|s to
identiy variab|es that might have signicant impacts on pro|ect outcomes,
(c) ana|yse ris| and uncertainty by ca|cu|ating expected va|ues and standard
deviations together with probabi|ity tab|es and histograms,
(d) prepare expected va|ue tab|es,
(e) ca|cu|ate the va|ue o inormation,
() app|y decision trees.
1he nature o ris| and uncertainty.
Sensitivity ana|ysis in decision mode||ing and the use o computer sotware or "what i" ana|ysis.
Assignment o probabi|ities to |ey variab|es in decision mode|s.
Ana|ysis o probabi|istic mode|s and interpretation o distributions o pro|ect outcomes.
Lxpected va|ue tab|es and the va|ue o inormation.
Lecision trees or mu|ti-stage decision prob|ems.
24
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1. ana|yse the wor|ing capita|
position and identiy areas
or improvement.
(a) exp|ain the importance o cash ow and wor|ing capita| management,
(b) interpret wor|ing capita| ratios or business sectors,
(c) ana|yse cash-ow orecasts over a twe|ve-month period,
(d) discuss measures to improve a cash orecast situation,
(e) ana|yse trade debtor and creditor inormation,
() ana|yse the impacts o a|ternative debtor and creditor po|icies,
(g) ana|yse the impacts o a|ternative po|icies or stoc| management.
1he |in| between cash, prot and the ba|ance sheet.
1he credit cyc|e rom receipt o customer order to cash receipt and the payment cyc|e rom agreeing the order to ma|ing payment.
vor|ing capita| ratios (e.g. debtor days, stoc| days, creditor days, current ratio, quic| ratio) and the wor|ing capita| cyc|e.
vor|ing capita| characteristics o dierent businesses (e.g. supermar|ets being heavi|y unded by creditors) and
the importance o industry comparisons.
Cash-ow orecasts, use o spreadsheets to assist in this in terms o changing variab|es (e.g. interest rates, ination)
and in conso|idating orecasts.
variab|es that are most easi|y changed, de|ayed or brought orward in a orecast.
Methods or eva|uating payment terms and sett|ement discounts.
lreparation and interpretation o age ana|yses o debtors and creditors.
Lstab|ishing co||ection targets on an appropriate basis (e.g. motivationa| issues in managing credit contro|).
Centra|ised versus decentra|ised purchasing.
1he re|ationship between purchasing and stoc| contro|.
lrincip|es o the economic order quantity (LOQ) mode| and criticisms thereo.
2. identiy short-term unding and
investment opportunities.
(a) identiy sources o short-term unding,
(b) identiy a|ternatives or investment o short-term cash surp|uses,
(c) identiy appropriate methods o nance or trading internationa||y,
(d) i||ustrate numerica||y the nancia| impact o short-term unding and investment
methods.
Use and abuse o trade creditors as a source o nance.
1ypes and eatures o short-term nance. trade creditors, overdrats, short-term |oans and debt actoring.
1he princip|es o investing short term (i.e. maturity, return, security, |iquidity and diversication).
1ypes o investments (e.g. interest-bearing ban| accounts, negotiab|e instruments inc|uding certicates o
deposit, short-term treasury bi||s, and securities).
1he dierence between the coupon on debt and the yie|d to maturity.
Lxport nance (e.g. documentary credits, bi||s o exchange, export actoring, oreiting).
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25
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1. ana|yse the wor|ing capita|
position and identiy areas
or improvement.
(a) exp|ain the importance o cash ow and wor|ing capita| management,
(b) interpret wor|ing capita| ratios or business sectors,
(c) ana|yse cash-ow orecasts over a twe|ve-month period,
(d) discuss measures to improve a cash orecast situation,
(e) ana|yse trade debtor and creditor inormation,
() ana|yse the impacts o a|ternative debtor and creditor po|icies,
(g) ana|yse the impacts o a|ternative po|icies or stoc| management.
1he |in| between cash, prot and the ba|ance sheet.
1he credit cyc|e rom receipt o customer order to cash receipt and the payment cyc|e rom agreeing the order to ma|ing payment.
vor|ing capita| ratios (e.g. debtor days, stoc| days, creditor days, current ratio, quic| ratio) and the wor|ing capita| cyc|e.
vor|ing capita| characteristics o dierent businesses (e.g. supermar|ets being heavi|y unded by creditors) and
the importance o industry comparisons.
Cash-ow orecasts, use o spreadsheets to assist in this in terms o changing variab|es (e.g. interest rates, ination)
and in conso|idating orecasts.
variab|es that are most easi|y changed, de|ayed or brought orward in a orecast.
Methods or eva|uating payment terms and sett|ement discounts.
lreparation and interpretation o age ana|yses o debtors and creditors.
Lstab|ishing co||ection targets on an appropriate basis (e.g. motivationa| issues in managing credit contro|).
Centra|ised versus decentra|ised purchasing.
1he re|ationship between purchasing and stoc| contro|.
lrincip|es o the economic order quantity (LOQ) mode| and criticisms thereo.
2. identiy short-term unding and
investment opportunities.
(a) identiy sources o short-term unding,
(b) identiy a|ternatives or investment o short-term cash surp|uses,
(c) identiy appropriate methods o nance or trading internationa||y.
Use and abuse o trade creditors as a source o nance.
1ypes and eatures o short-term nance. trade creditors, overdrats, short-term |oans and debt actoring.
1he princip|es o investing short term (i.e. maturity, return, security, |iquidity and diversication).
1ypes o investments (e.g. interest-bearing ban| accounts, negotiab|e instruments inc|uding certicates o
deposit, short-term treasury bi||s, and securities).
1he dierence between the coupon on debt and the yie|d to maturity.
Lxport nance (e.g. documentary credits, bi||s o exchange, export actoring, oreiting).
26
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: lrincip|es o +.
usiness 1axation
; kegu|ation and Lthics *.
o linancia| keporting
< linancia| Accounting /)
and keporting
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1he core ob|ectives o laper l1 are the preparation o the u||
nancia| statements or a sing|e company and the principa|
conso|idated nancia| statements or a simp|e group. Coverage o a
wide range o internationa| standards is imp|icit in these ob|ectives,
as specied in the paper's content.
Simi|ar|y, understanding the regu|atory and ethica| context o
nancia| reporting, covered in the paper, is vita| to ensuring that
nancia| statements meet users' needs. lrincip|es o taxation
are inc|uded, not on|y to support accounting or taxes in nancia|
statements, but a|so as a basis or examining the ro|e o tax in
nancia| ana|ysis and decision-ma|ing within subsequent papers
(laper l2 linancia| Management and laper l3 linancia| Strategy).
E^Z] <hfihg^gm
1. exp|ain the types o tax that can
app|y to incorporated businesses,
their princip|es and potentia|
administrative requirements.
(a) identiy the principa| types o taxation |i|e|y to be o re|evance
to an incorporated business in a particu|ar country,
(b) describe the eatures o the principa| types o taxation |i|e|y to be o
re|evance to an incorporated business in a particu|ar country,
(c) exp|ain |ey administrative requirements and the possib|e enquiry and investigation
powers o taxing authorities associated with the principa| types o taxation |i|e|y to
be o re|evance to an incorporated business,
(d) exp|ain the dierence in princip|e between tax avoidance and tax evasion,
(e) i||ustrate numerica||y the princip|es o dierent types o tax based on
provided inormation.
Concepts o direct versus indirect taxes, taxab|e person and competent |urisdiction.
1ypes o taxation, inc|uding direct tax on the company's trading prots and capita| gains, indirect taxes co||ected by
the company, emp|oyee taxation and withho|ding taxes on internationa| payments, and their eatures (e.g. in terms o who
u|timate|y bears the tax cost, withho|ding responsibi|ities, princip|es o ca|cu|ating the tax base).
Sources o tax ru|es (e.g. domestic primary |egis|ation and court ru|ings, practice o the re|evant taxing authority, supranationa|
bodies, such as the LU in the case o va|ue added/sa|es tax, and internationa| tax treaties).
lndirect taxes co||ected by the company.
in the context o indirect taxes, the distinction between unit taxes (e.g. excise duties based on physica| measures)
and ad va|orem taxes (e.g. sa|es tax based on va|ue),
the mechanism o va|ue added/sa|es taxes, in which businesses are |iab|e or tax on their outputs |ess credits or tax paid on
their inputs, inc|uding the concepts o exemption and variation in tax rates depending on the type o output and disa||owance o
input credits or exempt outputs.
Lmp|oyee taxation.
the emp|oyee as a separate taxab|e person sub|ect to a persona| income tax regime,
use o emp|oyer reporting and withho|ding to ensure comp|iance and assist tax co||ection.
1he need or record-|eeping and record retention that may be additiona| to that required or nancia| accounting purposes.
1he need or dead|ines or reporting (|ing returns) and tax payments.
1ypes o powers o tax authorities to ensure comp|iance with tax ru|es.
power to review and query |ed returns,
power to request specia| reports or returns,
power to examine records (genera||y extending bac| some years),
powers o entry and search,
exchange o inormation with tax authorities in other |urisdictions.
1he distinction between tax avoidance and tax evasion, and how these vary among |urisdictions (inc|uding the
dierence between the use o statutory genera| anti-avoidance provisions and case |aw based regimes).
?*:'IKBG<BIE>LH?;NLBG>LLM:Q:MBHG!+."
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A
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27
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Section A 20 mar|s
between two and our mar|s. Mini scenarios may be given, to
which a group o questions re|ate.
Section 30 mar|s
Section C 50 mar|s
One or two compu|sory questions. Short scenarios may be given,
to which questions re|ate.
E^Z] <hfihg^gm
1. exp|ain the types o tax that can
app|y to incorporated businesses,
their princip|es and potentia|
administrative requirements.
(a) identiy the principa| types o taxation |i|e|y to be o re|evance
to an incorporated business in a particu|ar country,
(b) describe the eatures o the principa| types o taxation |i|e|y to be o
re|evance to an incorporated business in a particu|ar country,
(c) exp|ain |ey administrative requirements and the possib|e enquiry and investigation
powers o taxing authorities associated with the principa| types o taxation |i|e|y to
be o re|evance to an incorporated business,
(d) exp|ain the dierence in princip|e between tax avoidance and tax evasion,
(e) i||ustrate numerica||y the princip|es o dierent types o tax based on
provided inormation.
Concepts o direct versus indirect taxes, taxab|e person and competent |urisdiction.
1ypes o taxation, inc|uding direct tax on the company's trading prots and capita| gains, indirect taxes co||ected by
the company, emp|oyee taxation and withho|ding taxes on internationa| payments, and their eatures (e.g. in terms o who
u|timate|y bears the tax cost, withho|ding responsibi|ities, princip|es o ca|cu|ating the tax base).
Sources o tax ru|es (e.g. domestic primary |egis|ation and court ru|ings, practice o the re|evant taxing authority, supranationa|
bodies, such as the LU in the case o va|ue added/sa|es tax, and internationa| tax treaties).
lndirect taxes co||ected by the company.
in the context o indirect taxes, the distinction between unit taxes (e.g. excise duties based on physica| measures)
and ad va|orem taxes (e.g. sa|es tax based on va|ue),
the mechanism o va|ue added/sa|es taxes, in which businesses are |iab|e or tax on their outputs |ess credits or tax paid on
their inputs, inc|uding the concepts o exemption and variation in tax rates depending on the type o output and disa||owance o
input credits or exempt outputs.
Lmp|oyee taxation.
the emp|oyee as a separate taxab|e person sub|ect to a persona| income tax regime,
use o emp|oyer reporting and withho|ding to ensure comp|iance and assist tax co||ection.
1he need or record-|eeping and record retention that may be additiona| to that required or nancia| accounting purposes.
1he need or dead|ines or reporting (|ing returns) and tax payments.
1ypes o powers o tax authorities to ensure comp|iance with tax ru|es.
power to review and query |ed returns,
power to request specia| reports or returns,
power to examine records (genera||y extending bac| some years),
powers o entry and search,
exchange o inormation with tax authorities in other |urisdictions.
1he distinction between tax avoidance and tax evasion, and how these vary among |urisdictions (inc|uding the
dierence between the use o statutory genera| anti-avoidance provisions and case |aw based regimes).
28
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2. exp|ain undamenta| concepts in
internationa| taxation o
incorporated businesses.
(a) identiy situations in which oreign tax ob|igations (reporting
and |iabi|ity) cou|d arise and methods or re|ieving oreign tax,
(b) exp|ain sources o tax ru|es and the importance o |urisdiction.
lnternationa| taxation.
the concept o corporate residence and the variation in ru|es or its determination across |urisdictions
(e.g. p|ace o incorporation versus p|ace o management),
types o payments on which withho|ding tax may be required (especia||y interest, dividends, roya|ties and
capita| gains accruing to non-residents),
means o estab|ishing a taxab|e presence in another country (|oca| company and branch),
the eect o doub|e tax treaties (based on the OLCL Mode| Convention) on the above (e.g. reduction o
withho|ding tax rates, provisions or dening a permanent estab|ishment).
3. prepare corporate income
tax ca|cu|ations.
(a) prepare corporate income tax ca|cu|ations based on a given simp|e set o ru|es. Lirect taxes on company prots and gains.
the princip|e o non-deductibi|ity o dividends and systems o taxation dened according to the treatment
o dividends in the hands o the shareho|der (e.g. c|assica|, partia| imputation and imputation),
the distinction between accounting and taxab|e prots in abso|ute terms (e.g. disa||owab|e expenditure on
revenue account, such as entertaining, and on capita| account, such as ormation and acquisition costs)
and in terms o timing (e.g. deduction on a paid basis),
the concept o tax depreciation rep|acing boo| depreciation in the tax computation and its ca|cu|ation based on
the poo|ing o assets by their c|asses, inc|uding ba|ancing ad|ustments on the disposa| o assets,
the nature o ru|es recharacterising interest payments as dividends (e.g. where interest is based on protabi|ity),
potentia| or variation in ru|es or ca|cu|ating the tax base dependent on the nature or source o the income (schedu|er systems),
the need or ru|es dea|ing with the re|ie o |osses,
princip|es o re|ie or oreign taxes by exemption, deduction and credit.
the concept o tax conso|idation (e.g. or re|ie o |osses and deerra| o capita| gains on asset transers within a group).
4. app|y the accounting ru|es or
current and deerred taxation.
(a) app|y the accounting ru|es or current and deerred taxation,
inc|uding ca|cu|ation o deerred tax based on a given set o ru|es.
Accounting treatment o taxation and disc|osure requirements under lAS 12.
?*:'IKBG<BIE>LH?;NLBG>LLM:Q:MBHG!+."\hgmbgn^]
E^Z] <hfihg^gm
1. exp|ain the need or and methods
o regu|ating accounting and
nancia| reporting.
(a) exp|ain the need or regu|ation o pub|ished accounts and the
concept that regu|atory regimes vary rom country to country,
(b) exp|ain potentia| e|ements that might be expected in a nationa|
regu|atory ramewor| or pub|ished accounts,
(c) describe the ro|e and structure o the lnternationa| Accounting Standards oard (lAS)
and the lnternationa| Organisation o Securities Commissions (lOSCO),
(d) exp|ain the meaning o given eatures or parts o the lAS's
lramewor| or the lresentation and lreparation o linancia| Statements,
(e) describe the process |eading to the promu|gation o an llkS,
() describe ways in which llkSs can interact with |oca| regu|atory ramewor|s,
(g) exp|ain in genera| terms, the ro|e o the externa| auditor, the e|ements
o the audit report and types o qua|ication o that report.
1he need or regu|ation o accounts.
L|ements in a regu|atory ramewor| or pub|ished accounts (e.g. company |aw, |oca| CAAl, review o accounts by pub|ic bodies).
CAAl based on prescriptive versus princip|es-based standards.
1he ro|e and structure o the lAS and lOSCO.
1he lAS's lramewor| or the lresentation and lreparation o linancia| Statements.
1he process |eading to the promu|gation o a standard practice.
vays in which llkSs are used. adoption as |oca| CAAl, mode| or |oca| CAAl, persuasive inuence in ormu|ating |oca| CAAl.
1he powers and duties o the externa| auditors, the audit report and its qua|ication or accounting statements not in
accordance with best practice.
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2. exp|ain undamenta| concepts in
internationa| taxation o
incorporated businesses.
(a) identiy situations in which oreign tax ob|igations (reporting
and |iabi|ity) cou|d arise and methods or re|ieving oreign tax,
(b) exp|ain sources o tax ru|es and the importance o |urisdiction.
lnternationa| taxation.
the concept o corporate residence and the variation in ru|es or its determination across |urisdictions
(e.g. p|ace o incorporation versus p|ace o management),
types o payments on which withho|ding tax may be required (especia||y interest, dividends, roya|ties and
capita| gains accruing to non-residents),
means o estab|ishing a taxab|e presence in another country (|oca| company and branch),
the eect o doub|e tax treaties (based on the OLCL Mode| Convention) on the above (e.g. reduction o
withho|ding tax rates, provisions or dening a permanent estab|ishment).
3. prepare corporate income
tax ca|cu|ations.
(a) prepare corporate income tax ca|cu|ations based on a given simp|e set o ru|es. Lirect taxes on company prots and gains.
the princip|e o non-deductibi|ity o dividends and systems o taxation dened according to the treatment
o dividends in the hands o the shareho|der (e.g. c|assica|, partia| imputation and imputation),
the distinction between accounting and taxab|e prots in abso|ute terms (e.g. disa||owab|e expenditure on
revenue account, such as entertaining, and on capita| account, such as ormation and acquisition costs)
and in terms o timing (e.g. deduction on a paid basis),
the concept o tax depreciation rep|acing boo| depreciation in the tax computation and its ca|cu|ation based on
the poo|ing o assets by their c|asses, inc|uding ba|ancing ad|ustments on the disposa| o assets,
the nature o ru|es recharacterising interest payments as dividends (e.g. where interest is based on protabi|ity),
potentia| or variation in ru|es or ca|cu|ating the tax base dependent on the nature or source o the income (schedu|er systems),
the need or ru|es dea|ing with the re|ie o |osses,
princip|es o re|ie or oreign taxes by exemption, deduction and credit.
the concept o tax conso|idation (e.g. or re|ie o |osses and deerra| o capita| gains on asset transers within a group).
4. app|y the accounting ru|es or
current and deerred taxation.
(a) app|y the accounting ru|es or current and deerred taxation,
inc|uding ca|cu|ation o deerred tax based on a given set o ru|es.
Accounting treatment o taxation and disc|osure requirements under lAS 12.
E^Z] <hfihg^gm
1. exp|ain the need or and methods
o regu|ating accounting and
nancia| reporting.
(a) exp|ain the need or regu|ation o pub|ished accounts and the
concept that regu|atory regimes vary rom country to country,
(b) exp|ain potentia| e|ements that might be expected in a nationa|
regu|atory ramewor| or pub|ished accounts,
(c) describe the ro|e and structure o the lnternationa| Accounting Standards oard (lAS)
and the lnternationa| Organisation o Securities Commissions (lOSCO),
(d) exp|ain the meaning o given eatures or parts o the lAS's
lramewor| or the lresentation and lreparation o linancia| Statements,
(e) describe the process |eading to the promu|gation o an llkS,
() describe ways in which llkSs can interact with |oca| regu|atory ramewor|s,
(g) exp|ain in genera| terms, the ro|e o the externa| auditor, the e|ements
o the audit report and types o qua|ication o that report.
1he need or regu|ation o accounts.
L|ements in a regu|atory ramewor| or pub|ished accounts (e.g. company |aw, |oca| CAAl, review o accounts by pub|ic bodies).
CAAl based on prescriptive versus princip|es-based standards.
1he ro|e and structure o the lAS and lOSCO.
1he lAS's lramewor| or the lresentation and lreparation o linancia| Statements.
1he process |eading to the promu|gation o a standard practice.
vays in which llkSs are used. adoption as |oca| CAAl, mode| or |oca| CAAl, persuasive inuence in ormu|ating |oca| CAAl.
1he powers and duties o the externa| auditors, the audit report and its qua|ication or accounting statements not in
accordance with best practice.
30
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2. app|y the provisions o the
ClMA Code o Lthics or
lroessiona| Accountants.
(a) exp|ain the importance o the exercise o ethica| princip|es
in reporting and assessing inormation,
(b) describe the sources o ethica| codes or those invo|ved in the reporting
or taxation aairs o an organisation, inc|uding the externa| auditors,
(c) app|y the provisions o the ClMA Code o Lthics or lroessiona|
Accountants o particu|ar re|evance to the inormation reporting,
assurance and tax-re|ated activities o the accountant.
Lthica| requirements o the proessiona| accountant in reporting and assessing inormation (the undamenta| princip|es).
Sources o ethica| codes (llAC, proessiona| bodies, emp|oying organisations, socia| /re|igious/persona| sources).
lrovisions o the ClMA Code o Lthics or lroessiona| Accountants o particu|ar re|evance to inormation reporting,
assurance and tax-re|ated activities (especia||y section 220 and lart C).
?*;'K>@NE:MBHG:G=>MAB<LH??BG:G<B:EK>IHKMBG@!*."\hgmbgn^]
E^Z] <hfihg^gm
1. prepare the u|| nancia| statements
o a sing|e company and the
conso|idated statements o nancia|
position and comprehensive income
or a group (in re|ative|y
straightorward circumstances).
(a) prepare a comp|ete set o nancia| statements, in a orm
suitab|e or pub|ication or a sing|e company,
(b) app|y the conditions required or an underta|ing to be a
subsidiary or an associate o another company,
(c) prepare the conso|idated statement o nancia| position (ba|ance sheet) and
statement o comprehensive income or a group o companies in a orm suitab|e
or pub|ication or a group o companies comprising direct|y he|d interests in one
or more u||y-contro||ed subsidiaries and associates (such interests having
been acquired at the beginning o an accounting period),
(d) app|y the concepts o air va|ue at the point o acquisition,
identiabi|ity o assets and |iabi|ities, and recognition o goodwi||.
lreparation o the nancia| statements o a sing|e company, as specied in lAS 1 (revised), inc|uding the statement o changes in equity.
lreparation o the statement o cash ows (lAS 7).
lreparation o the conso|idated statement o nancia| position (ba|ance sheet) and statement o comprehensive income where.
interests are direct|y he|d by the acquirer (parent) company, any subsidiary is u||y contro||ed, and a|| interests were acquired at the
beginning o an accounting period. (llkS 3 and lAS 27, to the extent that their provisions are re|evant to the specied |earning outcomes).
2. app|y internationa| standards dea|ing
with a range o matters and items.
(a) app|y the accounting ru|es contained in llkSs and lASs dea|ing with reporting
perormance, non-current assets, inc|uding their impairment, inventories, disc|osure
o re|ated parties to a business, construction contracts (and re|ated nancing costs),
post-ba|ance sheet events, provisions, contingencies, and |eases (|essee on|y),
(b) exp|ain the accounting ru|es contained in llkSs and lASs governing
share capita| transactions.
keporting perormance. recognition o revenue, measurement o prot or |oss, prior period items, discontinuing
operations and segment reporting (lAS 1(revised), 8 and 18, llkS 5 and 8).
lroperty, l|ant and Lquipment (lAS 16). the ca|cu|ation o depreciation and the eect o reva|uations, changes to
economic useu| |ie, repairs, improvements and disposa|s.
kesearch and deve|opment costs (lAS 38). criteria or capita|isation.
lntangib|e Assets (lAS 38) and goodwi||. recognition, va|uation, amortisation.
lmpairment o Assets (lAS 36) and Non-Current Assets He|d or Sa|e (llkS 5) and their eects on the above.
lnventories (lAS 2).
1he disc|osure o re|ated parties to a business (lAS 24).
Construction contracts and re|ated nancing costs (lAS 11 and 23). determination o cost, net rea|isab|e va|ue, the inc|usion o
overheads and the measurement o prot on uncomp|eted contracts.
lost-ba|ance sheet events (lAS 10).
lrovisions and contingencies (lAS 37).
Leases (lAS 17) distinguishing operating rom nance |eases and the concept o substance over orm (rom the lramewor|),
accounting or |eases in the boo|s o the |essee.
lssue and redemption o shares, inc|uding treatment o share issue and redemption costs (lAS 32 and 39), the share premium account,
the accounting or maintenance o capita| arising rom the purchase by a company o its own shares.
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2. app|y the provisions o the
ClMA Code o Lthics or
lroessiona| Accountants.
(a) exp|ain the importance o the exercise o ethica| princip|es
in reporting and assessing inormation,
(b) describe the sources o ethica| codes or those invo|ved in the reporting
or taxation aairs o an organisation, inc|uding the externa| auditors,
(c) app|y the provisions o the ClMA Code o Lthics or lroessiona|
Accountants o particu|ar re|evance to the inormation reporting,
assurance and tax-re|ated activities o the accountant.
Lthica| requirements o the proessiona| accountant in reporting and assessing inormation (the undamenta| princip|es).
Sources o ethica| codes (llAC, proessiona| bodies, emp|oying organisations, socia| /re|igious/persona| sources).
lrovisions o the ClMA Code o Lthics or lroessiona| Accountants o particu|ar re|evance to inormation reporting,
assurance and tax-re|ated activities (especia||y section 220 and lart C).
E^Z] <hfihg^gm
1. prepare the u|| nancia| statements
o a sing|e company and the
conso|idated statements o nancia|
position and comprehensive income
or a group (in re|ative|y
straightorward circumstances).
(a) prepare a comp|ete set o nancia| statements, in a orm
suitab|e or pub|ication or a sing|e company,
(b) app|y the conditions required or an underta|ing to be a
subsidiary or an associate o another company,
(c) prepare the conso|idated statement o nancia| position (ba|ance sheet) and
statement o comprehensive income or a group o companies in a orm suitab|e
or pub|ication or a group o companies comprising direct|y he|d interests in one
or more u||y-contro||ed subsidiaries and associates (such interests having
been acquired at the beginning o an accounting period),
(d) app|y the concepts o air va|ue at the point o acquisition,
identiabi|ity o assets and |iabi|ities, and recognition o goodwi||.
lreparation o the nancia| statements o a sing|e company, as specied in lAS 1 (revised), inc|uding the statement o changes in equity.
lreparation o the statement o cash ows (lAS 7).
lreparation o the conso|idated statement o nancia| position (ba|ance sheet) and statement o comprehensive income where.
interests are direct|y he|d by the acquirer (parent) company, any subsidiary is u||y contro||ed, and a|| interests were acquired at the
beginning o an accounting period. (llkS 3 and lAS 27, to the extent that their provisions are re|evant to the specied |earning outcomes).
2. app|y internationa| standards dea|ing
with a range o matters and items.
(a) app|y the accounting ru|es contained in llkSs and lASs dea|ing with reporting
perormance, non-current assets, inc|uding their impairment, inventories, disc|osure
o re|ated parties to a business, construction contracts (and re|ated nancing costs),
post-ba|ance sheet events, provisions, contingencies, and |eases (|essee on|y),
(b) exp|ain the accounting ru|es contained in llkSs and lASs governing
share capita| transactions.
keporting perormance. recognition o revenue, measurement o prot or |oss, prior period items, discontinuing
operations and segment reporting (lAS 1(revised), 8 and 18, llkS 5 and 8).
lroperty, l|ant and Lquipment (lAS 16). the ca|cu|ation o depreciation and the eect o reva|uations, changes to
economic useu| |ie, repairs, improvements and disposa|s.
kesearch and deve|opment costs (lAS 38). criteria or capita|isation.
lntangib|e Assets (lAS 38) and goodwi||. recognition, va|uation, amortisation.
lmpairment o Assets (lAS 36) and Non-Current Assets He|d or Sa|e (llkS 5) and their eects on the above.
lnventories (lAS 2).
1he disc|osure o re|ated parties to a business (lAS 24).
Construction contracts and re|ated nancing costs (lAS 11 and 23). determination o cost, net rea|isab|e va|ue, the inc|usion o
overheads and the measurement o prot on uncomp|eted contracts.
lost-ba|ance sheet events (lAS 10).
lrovisions and contingencies (lAS 37).
Leases (lAS 17) distinguishing operating rom nance |eases and the concept o substance over orm (rom the lramewor|),
accounting or |eases in the boo|s o the |essee.
lssue and redemption o shares, inc|uding treatment o share issue and redemption costs (lAS 32 and 39), the share premium account,
the accounting or maintenance o capita| arising rom the purchase by a company o its own shares.
32
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: Strategic Management ,)
and Assessing the
Competitive Lnvironment
; lro|ect Management -)
< Management o ,)
ke|ationships
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laper L2 moves away rom the emphasis on unctiona|
|now|edge within laper L1 Lnterprise Operations, towards an
ho|istic, integrated view o management across the organisation.
ui|ding on important concepts in strategic management, this
paper deve|ops too|s and techniques or identiying the |ey
types o competitive environment. 1he s|i||s and too|s o pro|ect
management are a|so addressed. lina||y, the paper introduces the
s|i||s and too|s needed to wor| with, manage and deve|op teams.
1his inc|udes both the |ega| aspects o managing individua|s, as we||
as the soter e|ements o negotiation and |eadership s|i||s.
papers at the management |eve| o the qua|ication. However,
it is imp|icit in each case, that materia| inc|uded in the sy||abus
or any o the papers at the operationa| |eve| may a|so be
re|evant or the purposes o assessment.
E^Z] <hfihg^gm
1. discuss dierent competitive
environments and |ey externa|
characteristics o these environments.
(a) discuss the nature o competitive environments,
(b) distinguish between dierent types o competitive environments.
lLS1 ana|ysis and its derivatives.
1he use o sta|eho|der mapping.
Qua|itative approaches to competitive ana|ysis.
Competitor ana|ysis and competitive strategies (both qua|itative and quantitative too|s o competitor ana|ysis wi|| be used).
Sources, avai|abi|ity and qua|ity o data or environmenta| ana|ysis.
lorter's live lorces mode| and its use or assessing the externa| environment.
lorter's Liamond and its use or assessing the competitive advantage o nations.
2. discuss deve|opments in strategic
management.
(a) discuss concepts in estab|ished and emergent thin|ing in strategic management,
(b) compare and contrast approaches to strategy ormu|ation,
(c) exp|ain the re|ationships between dierent |eve|s o strategy in organisations.
lerspectives on the strategic management o the rm (inc|uding transaction cost, resource-based view and eco|ogica| perspective).
Approaches to strategy (e.g. rationa|, adaptive, emergent, evo|utionary or system based views.
Leve|s o strategy (e.g. Corporate, business-|eve|, unctiona|) (Note. candidates are not expected to identiy or eva|uate options).
>+:'LMK:M>@B<F:G:@>F>GM:G=:LL>LLBG@MA><HFI>MBMBO>>GOBKHGF>GM!,)"
A
C
B
33
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Section A 50 mar|s
live compu|sory medium answer questions, each worth ten mar|s.
Short scenarios may be given, to which some or a|| questions re|ate.
Section 50 mar|s
E^Z] <hfihg^gm
1. discuss dierent competitive
environments and |ey externa|
characteristics o these environments.
(a) discuss the nature o competitive environments,
(b) distinguish between dierent types o competitive environments.
lLS1 ana|ysis and its derivatives.
1he use o sta|eho|der mapping.
Qua|itative approaches to competitive ana|ysis.
Competitor ana|ysis and competitive strategies (both qua|itative and quantitative too|s o competitor ana|ysis wi|| be used).
Sources, avai|abi|ity and qua|ity o data or environmenta| ana|ysis.
lorter's live lorces mode| and its use or assessing the externa| environment.
lorter's Liamond and its use or assessing the competitive advantage o nations.
2. discuss deve|opments in strategic
management.
(a) discuss concepts in estab|ished and emergent thin|ing in strategic management,
(b) compare and contrast approaches to strategy ormu|ation,
(c) exp|ain the re|ationships between dierent |eve|s o strategy in organisations.
lerspectives on the strategic management o the rm (inc|uding transaction cost, resource-based view and eco|ogica| perspective).
Approaches to strategy (e.g. rationa|, adaptive, emergent, evo|utionary or system based views.
Leve|s o strategy (e.g. Corporate, business-|eve|, unctiona|) (Note. candidates are not expected to identiy or eva|uate options).
34
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E^Z] <hfihg^gm
1. discuss too|s and techniques o
pro|ect management.
(a) identiy a pro|ect, a programme and their attributes,
(b) app|y suitab|e structures and ramewor|s to pro|ects to identiy
common pro|ect management issues,
(c) construct an out|ine o the process o pro|ect management,
(d) identiy the characteristics o each phase in the pro|ect process,
(e) app|y |ey too|s and techniques, inc|uding the eva|uation o proposa|s,
() produce a basic pro|ect p|an incorporating strategies or dea|ing with
uncertainty, in the context o a simp|e pro|ect,
(g) identiy structura| and |eadership issues that wi|| be aced in managing a pro|ect team,
(h) compare and contrast pro|ect contro| systems,
(i) discuss the va|ue o post-comp|etion audit,
( |) app|y a process o continuous improvement to pro|ects.
1he denition o a programme, a pro|ect, pro|ect management, and the contrast with repetitive operations and |ine management.
4-L and 7-S mode|s to provide an overview o the pro|ect process, and the nine |ey process areas (lMl) to show what
happens during each part o the process.
1he benets and |imitations o having a sing|e process or managing pro|ects.
Key too|s or pro|ect managers (e.g. vor| rea|down Structure, networ| diagrams (Critica| lath Ana|ysis), Cantt charts,
resource histograms, gates and mi|estones).
Larned va|ue Management.
Lva|uation o p|ans or pro|ects.
1he |ey processes o lklNCL2 and their imp|ications or pro|ect sta.
Managing scope at the outset o a pro|ect and providing systems or conguration management/change contro|.
1he production o basic p|ans or time, cost and qua|ity.
Scenario p|anning and buering to ma|e provision or uncertainty in pro|ects, as part o the ris| and
opportunities management process.
Organisationa| structures, inc|uding the ro|e o the pro|ect and matrix organisations, and their impact on pro|ect achievement.
1eamwor|, inc|uding recognising the |ie-cyc|e o teams, team/group behaviour and se|ection.
Contro| o time, cost and qua|ity through perormance and conormance management systems.
lro|ect comp|etion, documentation, comp|etion reports and system c|ose-down.
1he use o post-comp|etion audit and review activities and the |ustication o their costs.
2. eva|uate the re|ationship o the
pro|ect manager to the
externa| environment.
(a) produce a strategy or a pro|ect,
(b) recommend strategies or the management o sta|eho|der
perceptions and expectations,
(c) exp|ain the ro|es o |ey p|ayers in a pro|ect organisation.
Letermining and managing trade-os between |ey pro|ect ob|ectives o time, cost and qua|ity.
Sta|eho|ders (both process and outcome), their power and interest, and their needs and expectations, mar|eting and
communications to enhance perceptions.
ko|es o support structures, inc|uding pro|ect management oces, as we|| as pro|ect sponsors (SkOs), boards, champions,
managers and c|ients.
35
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E^Z] <hfihg^gm
1. discuss too|s and techniques o
pro|ect management.
(a) identiy a pro|ect, a programme and their attributes,
(b) app|y suitab|e structures and ramewor|s to pro|ects to identiy
common pro|ect management issues,
(c) construct an out|ine o the process o pro|ect management,
(d) identiy the characteristics o each phase in the pro|ect process,
(e) app|y |ey too|s and techniques, inc|uding the eva|uation o proposa|s,
() produce a basic pro|ect p|an incorporating strategies or dea|ing with
uncertainty, in the context o a simp|e pro|ect,
(g) identiy structura| and |eadership issues that wi|| be aced in managing a pro|ect team,
(h) compare and contrast pro|ect contro| systems,
(i) discuss the va|ue o post-comp|etion audit,
( |) app|y a process o continuous improvement to pro|ects.
1he denition o a programme, a pro|ect, pro|ect management, and the contrast with repetitive operations and |ine management.
4-L and 7-S mode|s to provide an overview o the pro|ect process, and the nine |ey process areas (lMl) to show what
happens during each part o the process.
1he benets and |imitations o having a sing|e process or managing pro|ects.
Key too|s or pro|ect managers (e.g. vor| rea|down Structure, networ| diagrams (Critica| lath Ana|ysis), Cantt charts,
resource histograms, gates and mi|estones).
Larned va|ue Management.
Lva|uation o p|ans or pro|ects.
1he |ey processes o lklNCL2 and their imp|ications or pro|ect sta.
Managing scope at the outset o a pro|ect and providing systems or conguration management/change contro|.
1he production o basic p|ans or time, cost and qua|ity.
Scenario p|anning and buering to ma|e provision or uncertainty in pro|ects, as part o the ris| and
opportunities management process.
Organisationa| structures, inc|uding the ro|e o the pro|ect and matrix organisations, and their impact on pro|ect achievement.
1eamwor|, inc|uding recognising the |ie-cyc|e o teams, team/group behaviour and se|ection.
Contro| o time, cost and qua|ity through perormance and conormance management systems.
lro|ect comp|etion, documentation, comp|etion reports and system c|ose-down.
1he use o post-comp|etion audit and review activities and the |ustication o their costs.
2. eva|uate the re|ationship o the
pro|ect manager to the
externa| environment.
(a) produce a strategy or a pro|ect,
(b) recommend strategies or the management o sta|eho|der
perceptions and expectations,
(c) exp|ain the ro|es o |ey p|ayers in a pro|ect organisation.
Letermining and managing trade-os between |ey pro|ect ob|ectives o time, cost and qua|ity.
Sta|eho|ders (both process and outcome), their power and interest, and their needs and expectations, mar|eting and
communications to enhance perceptions.
ko|es o support structures, inc|uding pro|ect management oces, as we|| as pro|ect sponsors (SkOs), boards, champions,
managers and c|ients.
36
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E^Z] <hfihg^gm
1. discuss concepts associated with the
eective operation o an organisation.
(a) discuss the concepts o power, bureaucracy, authority,
responsibi|ity, |eadership and de|egation,
(b) demonstrate the importance o organisationa| cu|ture,
(c) identiy the nature and causes o conict,
(d) discuss a|ternative approaches to the management o conict.
1he concepts o power, authority, bureaucracy, |eadership, responsibi|ity and de|egation and their app|ication to
re|ationships within an organisation and outside it.
Organisationa| cu|ture. denition, c|assication, importance.
1he sources o conict in organisations and the ways in which conict can be managed to ensure that wor|ing
re|ationships are productive and eective.
2. discuss the activities associated
with managing peop|e and their
associated techniques.
(a) ana|yse the re|ationship between managers and their subordinates,
inc|uding |ega| aspects aecting wor| and emp|oyment,
(b) discuss the ro|es o negotiation and communication in the management
process, both within an organisation and with externa| bodies,
(c) discuss the eectiveness o re|ationships between the nance unction
and other parts o the organisation and with externa| sta|eho|ders,
(d) ldentiy too|s or managing and contro||ing individua|s, teams and
networ|s, and or managing group conict,
(e) compare and contrast ways to dea| eective|y with discip|ine prob|ems,
() exp|ain the process and importance o mentoring |unior co||eagues,
(g) ana|yse issues o business ethics and corporate governance.
Liscip|inary procedures and their operation, inc|uding the orm and process o orma| discip|inary action and dismissa|
(e.g. industria| tribuna|s, arbitration and conci|iation).
1he nature and eect o |ega| issues aecting wor| and emp|oyment, inc|uding the app|ication o re|evant emp|oyment |aw
(i.e. re|ating to hea|th, saety, discrimination, air treatment, chi|dcare, contracts o emp|oyment and wor|ing time).
Communication s|i||s (i.e. types o communication too|s and their use, as we|| as the uti|ity and conduct o meetings)
and ways o managing communication prob|ems.
Negotiation s|i||s.
Managing the nance unction to maximise its va|ue to the organisation through |ean operation (e.g. business process outsourcing,
shared service centres) and contribution to other unctions (e.g. embedding nance personne| in business and strategic
decision processes).
Management o re|ationships with proessiona| advisors (accounting, tax and |ega|), auditors and nancia| sta|eho|ders
(investors and nanciers) to meet organisationa| ob|ectives.
1he princip|es o corporate governance and the ClMA Code o Lthics or lroessiona| Accountants, and their re|evance
to the ro|e, ob|igations and expectations o a manager.
How to |ead and manage a team.
1he ro|e o a mentor, and the process o mentoring.
Motivating team members.
1he use o systems o contro| within the organisation (e.g. emp|oyment contracts, perormance appraisa|, reporting structures).
37
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E^Z] <hfihg^gm
1. discuss concepts associated with the
eective operation o an organisation.
(a) discuss the concepts o power, bureaucracy, authority,
responsibi|ity, |eadership and de|egation,
(b) demonstrate the importance o organisationa| cu|ture,
(c) identiy the nature and causes o conict,
(d) discuss a|ternative approaches to the management o conict.
1he concepts o power, authority, bureaucracy, |eadership, responsibi|ity and de|egation and their app|ication to
re|ationships within an organisation and outside it.
Organisationa| cu|ture. denition, c|assication, importance.
1he sources o conict in organisations and the ways in which conict can be managed to ensure that wor|ing
re|ationships are productive and eective.
2. discuss the activities associated
with managing peop|e and their
associated techniques.
(a) ana|yse the re|ationship between managers and their subordinates,
inc|uding |ega| aspects aecting wor| and emp|oyment,
(b) discuss the ro|es o negotiation and communication in the management
process, both within an organisation and with externa| bodies,
(c) discuss the eectiveness o re|ationships between the nance unction
and other parts o the organisation and with externa| sta|eho|ders,
(d) ldentiy too|s or managing and contro||ing individua|s, teams and
networ|s, and or managing group conict,
(e) compare and contrast ways to dea| eective|y with discip|ine prob|ems,
() exp|ain the process and importance o mentoring |unior co||eagues,
(g) ana|yse issues o business ethics and corporate governance.
Liscip|inary procedures and their operation, inc|uding the orm and process o orma| discip|inary action and dismissa|
(e.g. industria| tribuna|s, arbitration and conci|iation).
1he nature and eect o |ega| issues aecting wor| and emp|oyment, inc|uding the app|ication o re|evant emp|oyment |aw
(i.e. re|ating to hea|th, saety, discrimination, air treatment, chi|dcare, contracts o emp|oyment and wor|ing time).
Communication s|i||s (i.e. types o communication too|s and their use, as we|| as the uti|ity and conduct o meetings)
and ways o managing communication prob|ems.
Negotiation s|i||s.
Managing the nance unction to maximise its va|ue to the organisation through |ean operation (e.g. business process outsourcing,
shared service centres) and contribution to other unctions (e.g. embedding nance personne| in business and strategic
decision processes).
Management o re|ationships with proessiona| advisors (accounting, tax and |ega|), auditors and nancia| sta|eho|ders
(investors and nanciers) to meet organisationa| ob|ectives.
1he princip|es o corporate governance and the ClMA Code o Lthics or lroessiona| Accountants, and their re|evance
to the ro|e, ob|igations and expectations o a manager.
How to |ead and manage a team.
1he ro|e o a mentor, and the process o mentoring.
Motivating team members.
1he use o systems o contro| within the organisation (e.g. emp|oyment contracts, perormance appraisa|, reporting structures).
38
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: lricing and ,)
lroduct Lecisions
; Cost l|anning and Ana|ysis ,)
or Competitive Advantage
< udgeting and +)
Management Contro|
= Contro| and lerormance +)
Measurement o
kesponsibi|ity Centres
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vhi|e laper l2 continues the ana|ytic theme o laper l1
lerormance Operations (or examp|e in terms o identiying
re|evant costs), its main ocus is on the app|ication o inormation
in the management processes o decision-ma|ing and contro|, so
as to optimise perormance. 1he rst two sections dea| respective|y
with the |ey contributors to operationa| perormance revenue
(decisions o what to produce, at what price) and costs (how to
manage them to maximise protabi|ity). 1he ro|e o contro| in
monitoring and improving perormance then comes to the ore in
the na| two sections, dea|ing with princip|es and practices in the
use o responsibi|ity centres and budgeting.
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1. discuss concepts o cost and
revenue re|evant to pricing and
product decisions.
(a) discuss the princip|es o decision-ma|ing inc|uding the identication o re|evant cash
ows and their use a|ongside non-quantiab|e actors in ma|ing rounded |udgements,
(b) discuss the possib|e conicts between cost accounting or prot reporting and stoc|
va|uation and inormation required or decision-ma|ing,
(c) discuss the particu|ar issues that arise in pricing decisions and the conict between
'margina| cost' princip|es and the need or u|| recovery o a|| costs incurred.
ke|evant cash ows and their use in short-term decisions, typica||y concerning acceptance/re|ection o contracts,
pricing and cost/benet comparisons.
1he importance o strategic, intangib|e and non-nancia| |udgements in decision-ma|ing.
ke|evant costs and revenues in decision-ma|ing and their re|ation to accounting concepts.
Margina| and u|| cost recovery as bases or pricing decisions in the short and |ong-term.
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A
D
C
B
39
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Section A 50 mar|s
Section 50 mar|s
E^Z] <hfihg^gm
1. discuss concepts o cost and
revenue re|evant to pricing and
product decisions.
(a) discuss the princip|es o decision-ma|ing inc|uding the identication o re|evant cash
ows and their use a|ongside non-quantiab|e actors in ma|ing rounded |udgements,
(b) discuss the possib|e conicts between cost accounting or prot reporting and stoc|
va|uation and inormation required or decision-ma|ing,
(c) discuss the particu|ar issues that arise in pricing decisions and the conict between
'margina| cost' princip|es and the need or u|| recovery o a|| costs incurred.
ke|evant cash ows and their use in short-term decisions, typica||y concerning acceptance/re|ection o contracts,
pricing and cost/benet comparisons.
1he importance o strategic, intangib|e and non-nancia| |udgements in decision-ma|ing.
ke|evant costs and revenues in decision-ma|ing and their re|ation to accounting concepts.
Margina| and u|| cost recovery as bases or pricing decisions in the short and |ong-term.
40
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E^Z] <hfihg^gm
2. ana|yse short-term pricing and
product decisions.
(a) exp|ain the useu|ness o dividing costs into variab|e and xed
components in the context o short-term decision ma|ing,
(b) interpret variab|e/xed cost ana|ysis in mu|tip|e product
contexts to brea|-even ana|ysis and product mix decision ma|ing,
inc|uding circumstances where there are mu|tip|e constraints and
|inear programming methods are needed to identiy 'optima|' so|utions,
(c) discuss the meaning o 'optima|' so|utions and how |inear
programming methods can be emp|oyed or prot maximising,
revenue maximising and satisying ob|ectives,
(d) ana|yse the impact o uncertainty and ris| on decision mode|s based on Cvl ana|ysis.
Simp|e product mix ana|ysis in situations where there are |imitations on product/service demand and one other production constraint.
Mu|ti-product brea|-even ana|ysis, inc|uding brea|-even and prot/vo|ume charts, contribution/sa|es ratio, margin o saety etc.
Linear programming or more comp|ex situations invo|ving mu|tip|e constraints. So|ution by graphica| methods o two variab|e prob|ems,
together with understanding o the mechanics o simp|ex so|ution, shadow prices etc. (Note. questions requiring the u|| app|ication o the
simp|ex a|gorithm wi|| not be set a|though candidates shou|d be ab|e to ormu|ate an initia| tab|eau, interpret a na| simp|ex tab|eau and
app|y the inormation it contained in a na| tab|eau).
Sensitivity ana|ysis o Cvl-based decision mode|s.
3. discuss pricing strategies and
their consequences.
(a) app|y an approach to pricing based on prot maximisation in imperect mar|ets,
(b) discuss the nancia| consequences o a|ternative pricing strategies,
(c) exp|ain why |oint costs must be a||ocated to na| products or nancia| reporting
purposes, but why this is unhe|pu| when decisions concerning process
and product viabi|ity have to be ta|en.
lricing decisions or prot maximising in imperect mar|ets. (Note. tabu|ar methods o so|ution are acceptab|e).
lricing strategies and the nancia| consequences o mar|et s|imming, premium pricing, penetration pricing, |oss |eaders, product
bund|ing/optiona| extras and product dierentiation to appea| to dierent mar|et segments.
1he a||ocation o |oint costs and decisions concerning process and product viabi|ity based on re|evant costs and revenues.
I+:'IKB<BG@:G=IKH=N<M=><BLBHGL!,)"\hgmbgn^]
E^Z] <hfihg^gm
1. eva|uate techniques or ana|ysing
and managing costs or
competitive advantage
(a) compare and contrast va|ue ana|ysis and unctiona| cost ana|ysis,
(b) eva|uate the impacts o |ust-in-time production, the theory o constraints
and tota| qua|ity management on eciency, inventory and cost,
(c) exp|ain the concepts o continuous improvement and Kaizen costing that
are centra| to tota| qua|ity management,
(d) prepare cost o qua|ity reports,
(e) app|y |earning curves to estimate time and cost or new products and services,
() app|y the techniques o activity-based management in identiying cost drivers/activities,
(g) exp|ain how process re-engineering can be used to e|iminate non-va|ue
adding activities and reduce activity costs,
(h) exp|ain how target costs can be derived rom target prices and the
re|ationship between target costs and standard costs,
(i) discuss the concept o |ie cyc|e costing and how |ie cyc|e costs interact
with mar|eting strategies at each stage o the |ie cyc|e.
(|) discuss the concept o the va|ue chain and the management o
contribution/prot generated throughout the chain,
(|) discuss gain sharing arrangements whereby contractors and customers
benet i contract targets or cost, de|ivery etc. are beaten,
(|) ana|yse direct customer protabi|ity and extend this ana|ysis to distribution
channe| protabi|ity through the app|ication o activity-based costing ideas,
(m) app|y lareto ana|ysis as a convenient technique or identiying |ey e|ements o data and
in presenting the resu|ts o other ana|yses, such as activity-based protabi|ity ca|cu|ations.
va|ue ana|ysis and qua|ity unction dep|oyment.
1he benets o |ust-in-time production, tota| qua|ity management and theory o constraints and the imp|ications o these
methods or decision-ma|ing in the 'new manuacturing environment'.
Kaizen costing, continuous improvement and cost o qua|ity reporting.
Learning curves and their use in predicting product/service costs, inc|uding derivation o the |earning rate and the |earning index.
Activity-based management in the ana|ysis o overhead and its use in improving the eciency o repetitive overhead activities.
1arget costing.
Lie cyc|e costing and imp|ications or mar|eting strategies.
1he va|ue chain and supp|y chain management, inc|uding the trend to outsource manuacturing operations to transition
and deve|oping economies.
Cain sharing arrangements in situations where, because o the size o the pro|ect, a |imited number o contractors or security
issues (e.g. in deence wor|), norma| competitive pressures do not app|y.
1he use o direct and activity-based cost methods in tracing costs to 'cost ob|ects', such as customers or distribution channe|s,
and the comparison o such costs with appropriate revenues to estab|ish 'tiered' contribution |eve|s, as in the
activity-based cost hierarchy.
lareto ana|ysis.
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41
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2. ana|yse short-term pricing and
product decisions.
(a) exp|ain the useu|ness o dividing costs into variab|e and xed
components in the context o short-term decision ma|ing,
(b) interpret variab|e/xed cost ana|ysis in mu|tip|e product
contexts to brea|-even ana|ysis and product mix decision ma|ing,
inc|uding circumstances where there are mu|tip|e constraints and
|inear programming methods are needed to identiy 'optima|' so|utions,
(c) discuss the meaning o 'optima|' so|utions and how |inear
programming methods can be emp|oyed or prot maximising,
revenue maximising and satisying ob|ectives,
(d) ana|yse the impact o uncertainty and ris| on decision mode|s based on Cvl ana|ysis.
Simp|e product mix ana|ysis in situations where there are |imitations on product/service demand and one other production constraint.
Mu|ti-product brea|-even ana|ysis, inc|uding brea|-even and prot/vo|ume charts, contribution/sa|es ratio, margin o saety etc.
Linear programming or more comp|ex situations invo|ving mu|tip|e constraints. So|ution by graphica| methods o two variab|e prob|ems,
together with understanding o the mechanics o simp|ex so|ution, shadow prices etc. (Note. questions requiring the u|| app|ication o the
simp|ex a|gorithm wi|| not be set a|though candidates shou|d be ab|e to ormu|ate an initia| tab|eau, interpret a na| simp|ex tab|eau and
app|y the inormation it contained in a na| tab|eau).
Sensitivity ana|ysis o Cvl-based decision mode|s.
3. discuss pricing strategies and
their consequences.
(a) app|y an approach to pricing based on prot maximisation in imperect mar|ets,
(b) discuss the nancia| consequences o a|ternative pricing strategies,
(c) exp|ain why |oint costs must be a||ocated to na| products or nancia| reporting
purposes, but why this is unhe|pu| when decisions concerning process
and product viabi|ity have to be ta|en.
lricing decisions or prot maximising in imperect mar|ets. (Note. tabu|ar methods o so|ution are acceptab|e).
lricing strategies and the nancia| consequences o mar|et s|imming, premium pricing, penetration pricing, |oss |eaders, product
bund|ing/optiona| extras and product dierentiation to appea| to dierent mar|et segments.
1he a||ocation o |oint costs and decisions concerning process and product viabi|ity based on re|evant costs and revenues.
E^Z] <hfihg^gm
1. eva|uate techniques or ana|ysing
and managing costs or
competitive advantage
(a) compare and contrast va|ue ana|ysis and unctiona| cost ana|ysis,
(b) eva|uate the impacts o |ust-in-time production, the theory o constraints
and tota| qua|ity management on eciency, inventory and cost,
(c) exp|ain the concepts o continuous improvement and Kaizen costing that
are centra| to tota| qua|ity management,
(d) prepare cost o qua|ity reports,
(e) app|y |earning curves to estimate time and cost or new products and services,
() app|y the techniques o activity-based management in identiying cost drivers/activities,
(g) exp|ain how process re-engineering can be used to e|iminate non-va|ue
adding activities and reduce activity costs,
(h) exp|ain how target costs can be derived rom target prices and the
re|ationship between target costs and standard costs,
(i) discuss the concept o |ie cyc|e costing and how |ie cyc|e costs interact
with mar|eting strategies at each stage o the |ie cyc|e.
(|) discuss the concept o the va|ue chain and the management o
contribution/prot generated throughout the chain,
(|) discuss gain sharing arrangements whereby contractors and customers
benet i contract targets or cost, de|ivery etc. are beaten,
(|) ana|yse direct customer protabi|ity and extend this ana|ysis to distribution
channe| protabi|ity through the app|ication o activity-based costing ideas,
(m) app|y lareto ana|ysis as a convenient technique or identiying |ey e|ements o data and
in presenting the resu|ts o other ana|yses, such as activity-based protabi|ity ca|cu|ations.
va|ue ana|ysis and qua|ity unction dep|oyment.
1he benets o |ust-in-time production, tota| qua|ity management and theory o constraints and the imp|ications o these
methods or decision-ma|ing in the 'new manuacturing environment'.
Kaizen costing, continuous improvement and cost o qua|ity reporting.
Learning curves and their use in predicting product/service costs, inc|uding derivation o the |earning rate and the |earning index.
Activity-based management in the ana|ysis o overhead and its use in improving the eciency o repetitive overhead activities.
1arget costing.
Lie cyc|e costing and imp|ications or mar|eting strategies.
1he va|ue chain and supp|y chain management, inc|uding the trend to outsource manuacturing operations to transition
and deve|oping economies.
Cain sharing arrangements in situations where, because o the size o the pro|ect, a |imited number o contractors or security
issues (e.g. in deence wor|), norma| competitive pressures do not app|y.
1he use o direct and activity-based cost methods in tracing costs to 'cost ob|ects', such as customers or distribution channe|s,
and the comparison o such costs with appropriate revenues to estab|ish 'tiered' contribution |eve|s, as in the
activity-based cost hierarchy.
lareto ana|ysis.
42
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1. exp|ain the princip|es that under|ie
the use o budgets in contro|.
(a) exp|ain the concepts o eedbac| and eed-orward contro| and
their app|ication in the use o budgets or p|anning and contro|,
(b) exp|ain the concept o responsibi|ity accounting and its importance in the
construction o unctiona| budgets that support the overa|| master budget,
(c) identiy contro||ab|e and uncontro||ab|e costs in the context o responsibi|ity accounting
and why uncontro||ab|e costs may or may not be a||ocated to responsibi|ity centres.
Contro| system concepts.
1he use o budgets in p|anning. 'ro||ing budgets' or adaptive p|anning.
kesponsibi|ity accounting and the use o budgets or contro|. contro||ab|e costs and, treatment o uncontro||ab|e costs,
the conceptua| |in| between standard costing and budget exing.
2. eva|uate perormance using budgets,
recognising a|ternative approaches
and sensitivity to variab|e actors.

(a) eva|uate pro|ected perormance using ratio ana|ysis,
(b) eva|uate the consequences o "what i" scenarios and
their impact on the master budget,
(c) eva|uate perormance using xed and exib|e budget reports.
Assessing the nancia| consequences o pro|ected perormance through |ey metrics inc|uding protabi|ity,
|iquidity and asset turnover ratios.
vhat-i ana|ysis based on a|ternate pro|ections o vo|umes, prices and cost structures and the use o spreadsheets
in aci|itating these ana|yses.
1he eva|uation o out-turn perormance using variances based on 'xed' and 'exed' budgets.
3. discuss the broader manageria|
issues arising rom the use o
budgets in contro|.
(a) discuss the impact o budgetary contro| systems and setting o
standard costs on human behaviour,
(b) discuss the ro|e o non-nancia| perormance indicators,
(c) compare and contrast traditiona| approaches to budgeting with
recommendations based on the 'ba|anced scorecard',
(d) discuss the criticisms o budgeting, particu|ar|y rom the
advocates o 'beyond budgeting' techniques.
ehavioura| issues in budgeting. participation in budgeting and its possib|e benecia| consequences or ownership
and motivation, participation in budgeting and its possib|e adverse consequences or 'budget padding' and manipu|ation, setting
budget targets or motivation, imp|ications o setting standard costs etc.
Non-nancia| perormance indicators.
Criticisms o budgeting and the recommendations o the advocates o the ba|anced scorecard and 'beyond budgeting'.
I+<';N=@>MBG@:G=F:G:@>F>GM<HGMKHE!+)"
E^Z] <hfihg^gm
1. discuss the use o responsibi|ity
centres in devising organisation
structure and in management contro|.
(a) discuss the use o cost, revenue, prot and investment centres
in devising organisation structure and in management contro|.
Organisation structure and its imp|ications or responsibi|ity accounting.
2. discuss inormation suitab|e or
management decision-ma|ing in
responsibi|ity centres.
(a) discuss cost inormation in appropriate ormats or cost centre managers, ta|ing due
account o contro||ab|e/uncontro||ab|e costs and the importance o budget exing,
(b) discuss revenue and cost inormation in appropriate ormats or prot and investment
centre managers, ta|ing due account o cost variabi|ity, attributab|e costs, contro||ab|e
costs and identication o appropriate measures o prot centre 'contribution',
(c) discuss a|ternative measures o perormance or responsibi|ity centres.
lresentation o nancia| inormation representing perormance and recognising issues o contro||ab|e/uncontro||ab|e
costs, variab|e/xed costs and tracing revenues and costs to particu|ar cost ob|ects.
keturn on investment and its deciencies, the emergence o residua| income and economic va|ue added to address these.
issues arising rom the division
o the organisation into
(a) discuss the |i|e|y behavioura| consequences o the use o
perormance metrics in managing cost, prot and investment centres,
(b) discuss the typica| consequences o a divisiona| structure or
perormance measurement as divisions compete or trade with each other,
(c) discuss the |i|e|y consequences o dierent approaches to transer pricing or divisiona|
decision ma|ing, divisiona| and group protabi|ity, the motivation o divisiona|
management and the autonomy o individua| divisions,
(d) discuss in princip|e the potentia| tax and currency management
consequences o interna| transer pricing po|icy.
1he behavioura| consequences o perormance management and contro|.
1he theory o transer pricing, inc|uding perect, imperect and no mar|et or the intermediate good.
Use o negotiated, mar|et, cost-p|us and variab|e cost based transer prices. 'Lua|' transer prices and |ump sum
payments as means o addressing some o the issues that arise.
1he interaction o transer pricing and tax |iabi|ities in internationa| operations and imp|ications or currency
management and possib|e distortion o interna| company operations in order to comp|y with 1ax Authority directives.
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43
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E^Z] <hfihg^gm
1. exp|ain the princip|es that under|ie
the use o budgets in contro|.
(a) exp|ain the concepts o eedbac| and eed-orward contro| and
their app|ication in the use o budgets or p|anning and contro|,
(b) exp|ain the concept o responsibi|ity accounting and its importance in the
construction o unctiona| budgets that support the overa|| master budget,
(c) identiy contro||ab|e and uncontro||ab|e costs in the context o responsibi|ity accounting
and why uncontro||ab|e costs may or may not be a||ocated to responsibi|ity centres.
Contro| system concepts.
1he use o budgets in p|anning. 'ro||ing budgets' or adaptive p|anning.
kesponsibi|ity accounting and the use o budgets or contro|. contro||ab|e costs and, treatment o uncontro||ab|e costs,
the conceptua| |in| between standard costing and budget exing.
2. eva|uate perormance using budgets,
recognising a|ternative approaches
and sensitivity to variab|e actors.

(a) eva|uate pro|ected perormance using ratio ana|ysis,
(b) eva|uate the consequences o "what i" scenarios and
their impact on the master budget,
(c) eva|uate perormance using xed and exib|e budget reports.
Assessing the nancia| consequences o pro|ected perormance through |ey metrics inc|uding protabi|ity,
|iquidity and asset turnover ratios.
vhat-i ana|ysis based on a|ternate pro|ections o vo|umes, prices and cost structures and the use o spreadsheets
in aci|itating these ana|yses.
1he eva|uation o out-turn perormance using variances based on 'xed' and 'exed' budgets.
issues arising rom the use o
budgets in contro|.
(a) discuss the impact o budgetary contro| systems and setting o
standard costs on human behaviour,
(b) discuss the ro|e o non-nancia| perormance indicators,
(c) compare and contrast traditiona| approaches to budgeting with
recommendations based on the 'ba|anced scorecard',
(d) discuss the criticisms o budgeting, particu|ar|y rom the
advocates o 'beyond budgeting' techniques.
ehavioura| issues in budgeting. participation in budgeting and its possib|e benecia| consequences or ownership
and motivation, participation in budgeting and its possib|e adverse consequences or 'budget padding' and manipu|ation, setting
budget targets or motivation, imp|ications o setting standard costs etc.
Non-nancia| perormance indicators.
Criticisms o budgeting and the recommendations o the advocates o the ba|anced scorecard and 'beyond budgeting'.
E^Z] <hfihg^gm
1. discuss the use o responsibi|ity
centres in devising organisation
structure and in management contro|.
(a) discuss the use o cost, revenue, prot and investment centres
in devising organisation structure and in management contro|.
Organisation structure and its imp|ications or responsibi|ity accounting.
2. discuss inormation suitab|e or
management decision-ma|ing in
(a) discuss cost inormation in appropriate ormats or cost centre managers, ta|ing due
account o contro||ab|e/uncontro||ab|e costs and the importance o budget exing,
(b) discuss revenue and cost inormation in appropriate ormats or prot and investment
centre managers, ta|ing due account o cost variabi|ity, attributab|e costs, contro||ab|e
costs and identication o appropriate measures o prot centre 'contribution',
(c) discuss a|ternative measures o perormance or responsibi|ity centres.
lresentation o nancia| inormation representing perormance and recognising issues o contro||ab|e/uncontro||ab|e
costs, variab|e/xed costs and tracing revenues and costs to particu|ar cost ob|ects.
keturn on investment and its deciencies, the emergence o residua| income and economic va|ue added to address these.
issues arising rom the division
o the organisation into
(a) discuss the |i|e|y behavioura| consequences o the use o
perormance metrics in managing cost, prot and investment centres,
(b) discuss the typica| consequences o a divisiona| structure or
perormance measurement as divisions compete or trade with each other,
(c) discuss the |i|e|y consequences o dierent approaches to transer pricing or divisiona|
decision ma|ing, divisiona| and group protabi|ity, the motivation o divisiona|
management and the autonomy o individua| divisions,
(d) discuss in princip|e the potentia| tax and currency management
consequences o interna| transer pricing po|icy.
1he behavioura| consequences o perormance management and contro|.
1he theory o transer pricing, inc|uding perect, imperect and no mar|et or the intermediate good.
Use o negotiated, mar|et, cost-p|us and variab|e cost based transer prices. 'Lua|' transer prices and |ump sum
payments as means o addressing some o the issues that arise.
1he interaction o transer pricing and tax |iabi|ities in internationa| operations and imp|ications or currency
management and possib|e distortion o interna| company operations in order to comp|y with 1ax Authority directives.
44
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: Croup linancia| ,.
Statements
; lssues in kecognition +)
and Measurement
< Ana|ysis and lnterpretation ,.
o linancia| Accounts
< Leve|opments in *)
Lxterna| keporting
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laper l2 extends the scope o laper l1 linancia| Operations to
more advanced topics in nancia| accounting (preparation o
u|| conso|idated nancia| statements and issues o princip|e in
accounting standards dea|ing with more comp|ex areas) and to
deve|opments in externa| reporting. vith the advanced |eve| o
nancia| accounting and reporting achieved in this paper, the
ana|ysis and interpretation o accounts becomes more meaningu|
and this constitutes a substantia| e|ement.
E^Z] <hfihg^gm
1. prepare the u|| conso|idated
statements o a sing|e company and
the conso|idated statements o
nancia| position and
comprehensive income or a group
(in re|ative|y comp|ex circumstances).
(a) prepare a comp|ete set o conso|idated nancia| statements in a
orm suitab|e or pub|ication or a group o companies,
(b) demonstrate the impact on group nancia| statements where. there is a minority
interest, the interest in a subsidiary or associate is acquired or disposed o part way
through an accounting period (to inc|ude the eective date o acquisition and
dividends out o pre-acquisition prots), shareho|dings, or contro|, are acquired in
stages, intra-group trading and other transactions occur, the va|ue o goodwi|| is impaired,
(c) app|y the concept o a |oint venture and how various types are accounted or.
ke|ationships between investors and investees, meaning o contro| and circumstances in which a subsidiary is exc|uded
rom conso|idation.
1he preparation o conso|idated nancia| statements (inc|uding the group cash ow statement and statement o changes in equity)
invo|ving one or more subsidiaries, sub-subsidiaries and associates (lAS 1(revised), 7 and 27, llkS 3).
1he treatment in conso|idated nancia| statements o minority interests, pre and post- acquisition reserves, goodwi||
(inc|uding its impairment), air va|ue ad|ustments, intra-group transactions and dividends, piece-mea| and mid-year acquisitions,
and disposa|s to inc|ude sub-subsidiaries and mixed groups.
1he accounting treatment o associates and |oint ventures (lAS 28 and 31) using the equity method and proportiona| conso|idation method.
2. exp|ain the princip|es o accounting
or capita| schemes and oreign
exchange rate changes.
(a) exp|ain the princip|es o accounting or a capita| reconstruction scheme or a demerger,
(b) exp|ain oreign currency trans|ation princip|es, inc|uding the dierence between
the c|osing rate/net investment method and the historica| rate method,
(c) exp|ain the correct treatment or oreign |oans nancing oreign equity investments.
Accounting or reorganisations and capita| reconstruction schemes.
loreign currency trans|ation (lAS 21), to inc|ude overseas transactions and investments in overseas subsidiaries.
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A
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Section A 50 mar|s
Section 50 mar|s
E^Z] <hfihg^gm
1. prepare the u|| conso|idated
statements o a sing|e company and
the conso|idated statements o
nancia| position and
comprehensive income or a group
(in re|ative|y comp|ex circumstances).
(a) prepare a comp|ete set o conso|idated nancia| statements in a
orm suitab|e or pub|ication or a group o companies,
(b) demonstrate the impact on group nancia| statements where. there is a minority
interest, the interest in a subsidiary or associate is acquired or disposed o part way
through an accounting period (to inc|ude the eective date o acquisition and
dividends out o pre-acquisition prots), shareho|dings, or contro|, are acquired in
stages, intra-group trading and other transactions occur, the va|ue o goodwi|| is impaired,
(c) app|y the concept o a |oint venture and how various types are accounted or.
ke|ationships between investors and investees, meaning o contro| and circumstances in which a subsidiary is exc|uded
rom conso|idation.
1he preparation o conso|idated nancia| statements (inc|uding the group cash ow statement and statement o changes in equity)
invo|ving one or more subsidiaries, sub-subsidiaries and associates (lAS 1(revised), 7 and 27, llkS 3).
1he treatment in conso|idated nancia| statements o minority interests, pre and post- acquisition reserves, goodwi||
(inc|uding its impairment), air va|ue ad|ustments, intra-group transactions and dividends, piece-mea| and mid-year acquisitions,
and disposa|s to inc|ude sub-subsidiaries and mixed groups.
1he accounting treatment o associates and |oint ventures (lAS 28 and 31) using the equity method and proportiona| conso|idation method.
2. exp|ain the princip|es o accounting
or capita| schemes and oreign
exchange rate changes.
(a) exp|ain the princip|es o accounting or a capita| reconstruction scheme or a demerger,
(b) exp|ain oreign currency trans|ation princip|es, inc|uding the dierence between
the c|osing rate/net investment method and the historica| rate method,
(c) exp|ain the correct treatment or oreign |oans nancing oreign equity investments.
Accounting or reorganisations and capita| reconstruction schemes.
loreign currency trans|ation (lAS 21), to inc|ude overseas transactions and investments in overseas subsidiaries.
46
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1. discuss accounting princip|es and
their re|evance to accounting issues
o contemporary interest.
(a) discuss the prob|ems o prot measurement and a|ternative
approaches to asset va|uations,
(b) discuss measures to reduce distortion in nancia| statements when price |eve|s change,
(c) discuss the princip|e o substance over orm app|ied to a range o transactions,
(d) discuss the possib|e treatments o nancia| instruments in the issuer's accounts
(i.e. |iabi|ities versus equity, and the imp|ications or nance costs),
(e) discuss circumstances in which amortised cost, air va|ue and hedge accounting are
appropriate or nancia| instruments, the princip|es o these accounting methods
and considerations in the determination o air va|ue,
() discuss the recognition and va|uation issues concerned with pension schemes
(inc|uding the treatment o actuaria| decits and surp|uses) and share-based payments.
1he prob|ems o prot measurement and the eect o a|ternative approaches to asset va|uation, current cost and current
purchasing power bases and the rea| terms system, linancia| keporting in Hyperinationary Lconomies (lAS 29).
1he princip|e o substance over orm and its inuence in dea|ing with transactions such as sa|e and repurchase agreements,
consignment stoc|, debt actoring, securitised assets, |oan transers and pub|ic and private sector nancia| co||aboration.
linancia| instruments c|assied as |iabi|ities or shareho|ders unds and the a||ocation o nance costs over the term o the
borrowing (lAS 32 and 39).
1he measurement, inc|uding methods o determining air va|ue, and disc|osure o nancia| instruments (lAS 32 and 39, llkS 7).
ketirement benets, inc|uding pension schemes dened benet schemes and dened contribution schemes, actuaria| decits
and surp|uses (lAS 19).
Share-based payments (llkS 2). types o transactions, measurement bases and accounting, determination o air va|ue.
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E^Z] <hfihg^gm
1. produce a ratio ana|ysis rom
nancia| statements and
supporting inormation.
(a) interpret a u|| range o accounting ratios,
(b) discuss the |imitations o accounting ratio ana|ysis and
ana|ysis based on nancia| statements.
katios in the areas o perormance, protabi|ity, nancia| adaptabi|ity, |iquidity, activity, shareho|der investment
and nancing, and their interpretation.
Ca|cu|ation o Larnings per Share under lAS 33, to inc|ude the eect o bonus issues, rights issues and convertib|e stoc|.
1he impact o nancing structure, inc|uding use o |easing and short-term debt, on ratios, particu|ar|y gearing.
Limitations o ratio ana|ysis (e.g. comparabi|ity o businesses and accounting po|icies).
2. eva|uate perormance and position. (a) ana|yse nancia| statements in the context o inormation
provided in the accounts and corporate report,
(b) eva|uate perormance and position based on ana|ysis o nancia| statements,
(c) discuss segmenta| ana|ysis, with inter-rm and internationa|
comparisons ta|ing account o possib|e aggressive or unusua|
accounting po|icies and pressures on ethica| behaviour,
(d) discuss the resu|ts o an ana|ysis o nancia| statements and its |imitations.
lnterpretation o nancia| statements via the ana|ysis o the accounts and corporate reports.
1he identication o inormation required to assess nancia| perormance and the extent to which nancia| statements
ai| to provide such inormation.
lnterpretation o nancia| ob|igations inc|uded in nancia| accounts (e.g. redeemab|e debt, earn-out arrangements, contingent |iabi|ities).
Segment ana|ysis. inter-rm and internationa| comparison (llkS 8).
1he need to be aware o aggressive or unusua| accounting po|icies ("creative accounting"), e.g. in the areas o cost capita|isation
and revenue recognition, and threats to the ethics o accountants rom pressure to report "good resu|ts".
keporting the resu|ts o ana|ysis.
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47
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1. discuss accounting princip|es and
their re|evance to accounting issues
o contemporary interest.
(a) discuss the prob|ems o prot measurement and a|ternative
approaches to asset va|uations,
(b) discuss measures to reduce distortion in nancia| statements when price |eve|s change,
(c) discuss the princip|e o substance over orm app|ied to a range o transactions,
(d) discuss the possib|e treatments o nancia| instruments in the issuer's accounts
(i.e. |iabi|ities versus equity, and the imp|ications or nance costs),
(e) discuss circumstances in which amortised cost, air va|ue and hedge accounting are
appropriate or nancia| instruments, the princip|es o these accounting methods
and considerations in the determination o air va|ue,
() discuss the recognition and va|uation issues concerned with pension schemes
(inc|uding the treatment o actuaria| decits and surp|uses) and share-based payments.
1he prob|ems o prot measurement and the eect o a|ternative approaches to asset va|uation, current cost and current
purchasing power bases and the rea| terms system, linancia| keporting in Hyperinationary Lconomies (lAS 29).
1he princip|e o substance over orm and its inuence in dea|ing with transactions such as sa|e and repurchase agreements,
consignment stoc|, debt actoring, securitised assets, |oan transers and pub|ic and private sector nancia| co||aboration.
linancia| instruments c|assied as |iabi|ities or shareho|ders unds and the a||ocation o nance costs over the term o the
borrowing (lAS 32 and 39).
1he measurement, inc|uding methods o determining air va|ue, and disc|osure o nancia| instruments (lAS 32 and 39, llkS 7).
ketirement benets, inc|uding pension schemes dened benet schemes and dened contribution schemes, actuaria| decits
and surp|uses (lAS 19).
Share-based payments (llkS 2). types o transactions, measurement bases and accounting, determination o air va|ue.
E^Z] <hfihg^gm
1. produce a ratio ana|ysis rom
nancia| statements and
supporting inormation.
(a) interpret a u|| range o accounting ratios,
(b) discuss the |imitations o accounting ratio ana|ysis and
ana|ysis based on nancia| statements.
katios in the areas o perormance, protabi|ity, nancia| adaptabi|ity, |iquidity, activity, shareho|der investment
and nancing, and their interpretation.
Ca|cu|ation o Larnings per Share under lAS 33, to inc|ude the eect o bonus issues, rights issues and convertib|e stoc|.
1he impact o nancing structure, inc|uding use o |easing and short-term debt, on ratios, particu|ar|y gearing.
Limitations o ratio ana|ysis (e.g. comparabi|ity o businesses and accounting po|icies).
2. eva|uate perormance and position. (a) ana|yse nancia| statements in the context o inormation
provided in the accounts and corporate report,
(b) eva|uate perormance and position based on ana|ysis o nancia| statements,
(c) discuss segmenta| ana|ysis, with inter-rm and internationa|
comparisons ta|ing account o possib|e aggressive or unusua|
accounting po|icies and pressures on ethica| behaviour,
(d) discuss the resu|ts o an ana|ysis o nancia| statements and its |imitations.
lnterpretation o nancia| statements via the ana|ysis o the accounts and corporate reports.
1he identication o inormation required to assess nancia| perormance and the extent to which nancia| statements
ai| to provide such inormation.
lnterpretation o nancia| ob|igations inc|uded in nancia| accounts (e.g. redeemab|e debt, earn-out arrangements, contingent |iabi|ities).
Segment ana|ysis. inter-rm and internationa| comparison (llkS 8).
1he need to be aware o aggressive or unusua| accounting po|icies ("creative accounting"), e.g. in the areas o cost capita|isation
and revenue recognition, and threats to the ethics o accountants rom pressure to report "good resu|ts".
keporting the resu|ts o ana|ysis.
48
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1. discuss contemporary
deve|opments in nancia| and
non-nancia| reporting.
(a) discuss pressures or extending the scope and qua|ity o externa| reports to inc|ude
prospective and non-nancia| matters, and narrative reporting genera||y,
(b) exp|ain how inormation concerning the interaction o a business with society
and the natura| environment can be communicated in the pub|ished accounts,
(c) discuss socia| and environmenta| issues which are |i|e|y
to be most important to sta|eho|ders in an organisation,
(d) exp|ain the process o measuring, recording and disc|osing the eect o exchanges
between a business and society human resource accounting,
(e) discuss ma|or dierences between llkS and US CAAl, and the measures
designed to contribute towards their convergence.
lncreasing sta|eho|der demands or inormation that goes beyond historica| nancia| inormation and ramewor|s or such
reporting, inc|uding, as an examp|e o nationa| requirements and guide|ines, the UK's usiness keview and the Accounting
Standard oard's best practice standard, kS1, and the C|oba| keporting lnitiative.
Lnvironmenta| and socia| accounting issues, dierentiating between externa|ities and costs interna|ised through, or examp|e,
capita|isation o environmenta| expenditure, recognition o uture environmenta| costs by means o provisions, taxation and
the costs o emissions permit trading schemes.
Non-nancia| measures o socia| and environmenta| impact.
Human resource accounting.
Ma|or dierences between llkS and US CAAl, and progress towards convergence.
?+='=>O>EHIF>GMLBG>QM>KG:EK>IHKMBG@!*)"
49
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1. discuss contemporary
deve|opments in nancia| and
non-nancia| reporting.
(a) discuss pressures or extending the scope and qua|ity o externa| reports to inc|ude
prospective and non-nancia| matters, and narrative reporting genera||y,
(b) exp|ain how inormation concerning the interaction o a business with society
and the natura| environment can be communicated in the pub|ished accounts,
(c) discuss socia| and environmenta| issues which are |i|e|y
to be most important to sta|eho|ders in an organisation,
(d) exp|ain the process o measuring, recording and disc|osing the eect o exchanges
between a business and society human resource accounting,
(e) discuss ma|or dierences between llkS and US CAAl, and the measures
designed to contribute towards their convergence.
lncreasing sta|eho|der demands or inormation that goes beyond historica| nancia| inormation and ramewor|s or such
reporting, inc|uding, as an examp|e o nationa| requirements and guide|ines, the UK's usiness keview and the Accounting
Standard oard's best practice standard, kS1, and the C|oba| keporting lnitiative.
Lnvironmenta| and socia| accounting issues, dierentiating between externa|ities and costs interna|ised through, or examp|e,
capita|isation o environmenta| expenditure, recognition o uture environmenta| costs by means o provisions, taxation and
the costs o emissions permit trading schemes.
Non-nancia| measures o socia| and environmenta| impact.
Human resource accounting.
Ma|or dierences between llkS and US CAAl, and progress towards convergence.
50
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Competitive Lnvironment
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< Lva|uation o ,)
Strategic Options
= lmp|ementation ,)
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laper L3 continues the integration o s|i||s across unctions, but
concentrates on deve|oping the |now|edge and s|i||s used in designing
and imp|ementing strategy. Strategy is deve|oped in a context, and
understanding how the organisation's externa| environment and
sta|eho|ders aect strategy deve|opment is important. Context and
the interna| capabi|ities o the organisation shape the generation and
eva|uation o strategic options. lmp|ementing strategy invo|ves too|s
and techniques associated with change management. lina||y, the
paper requires the app|ication o too|s to assist in the eva|uation o
the perormance imp|ications o a given strategy.
papers at the strategic |eve| o the qua|ication. However, it is
imp|icit in each case, that materia| inc|uded in the sy||abus or any
o the papers at the management or operationa| |eve|s may a|so
be re|evant or the purposes o assessment.
E^Z] <hfihg^gm
1. eva|uate the |ey externa| actors
aecting an organisation's strategy.
(a) eva|uate the impact and inuence o the externa| environment
on an organisation and its strategy,
(b) recommend approaches to business/government re|ations and
to re|ations with civi| society,
(c) discuss the drivers o externa| demands or corporate
socia| responsibi|ity and the organisation's response,
(d) recommend how to manage re|ationships with sta|eho|ders,
(e) recommend how to interact with supp|iers and customers.
Non-mar|et strategy and orms o corporate po|itica| activity.
Lxterna| demands or responsib|e business practices and ways to respond to these.
Sta|eho|der management (sta|eho|ders to inc|ude government and regu|atory agencies, non-governmenta| organisations
and civi| society, industry associations, customers and supp|iers).
1he customer porto|io. Customer ana|ysis and behaviour, inc|uding the mar|eting audit and customer protabi|ity ana|ysis
as we|| as customer retention and |oya|ty.
Strategic supp|y chain management.
lmp|ications o these interactions or Chartered Management Accountants and the management accounting system.
2. eva|uate the impact o inormation
systems on an organisation.
(a) eva|uate the impact o the internet on an organisation and its strategy,
(b) eva|uate the strategic and competitive impact o inormation systems.
1he impact o l1 (inc|uding the internet) on an organisation (uti|ising ramewor|s such as lorter's live lorces, the va|ue Chain).
Competing through exp|oiting inormation (rather than techno|ogy), e.g. use o databases to identiy potentia| customers or
mar|et segments, and the management o data (warehousing and mining).
Contemporary deve|opments in the commercia| use o the internet (e.g. veb 2.0).
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A
D
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B
51
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Section A 50 mar|s
A maximum o our compu|sory questions, tota||ing ty mar|s,
a|| re|ating to a pre-seen case study and urther new unseen case
materia| provided within the examination.
(Note. 1he pre-seen case study is common to a|| three o the strategic |eve| papers
at each examination sitting i.e. laper L3, l3 and l3).
Section 50 mar|s
1wo questions, rom a choice o three, each worth twenty ve mar|s.
Short scenarios wi|| be given, to which some or a|| questions re|ate.
E^Z] <hfihg^gm
1. eva|uate the |ey externa| actors
aecting an organisation's strategy.
(a) eva|uate the impact and inuence o the externa| environment
on an organisation and its strategy,
(b) recommend approaches to business/government re|ations and
to re|ations with civi| society,
(c) discuss the drivers o externa| demands or corporate
socia| responsibi|ity and the organisation's response,
(d) recommend how to manage re|ationships with sta|eho|ders,
(e) recommend how to interact with supp|iers and customers.
Non-mar|et strategy and orms o corporate po|itica| activity.
Lxterna| demands or responsib|e business practices and ways to respond to these.
Sta|eho|der management (sta|eho|ders to inc|ude government and regu|atory agencies, non-governmenta| organisations
and civi| society, industry associations, customers and supp|iers).
1he customer porto|io. Customer ana|ysis and behaviour, inc|uding the mar|eting audit and customer protabi|ity ana|ysis
as we|| as customer retention and |oya|ty.
Strategic supp|y chain management.
lmp|ications o these interactions or Chartered Management Accountants and the management accounting system.
2. eva|uate the impact o inormation
systems on an organisation.
(a) eva|uate the impact o the internet on an organisation and its strategy,
(b) eva|uate the strategic and competitive impact o inormation systems.
1he impact o l1 (inc|uding the internet) on an organisation (uti|ising ramewor|s such as lorter's live lorces, the va|ue Chain).
Competing through exp|oiting inormation (rather than techno|ogy), e.g. use o databases to identiy potentia| customers or
mar|et segments, and the management o data (warehousing and mining).
Contemporary deve|opments in the commercia| use o the internet (e.g. veb 2.0).
52
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1. advise on important e|ements in
the change process.
(a) discuss the concept o organisationa| change,
(b) recommend techniques to manage resistance to change.
Lxterna| and interna| change triggers (e.g. environmenta| actors, mergers and acquisitions, re organisation and rationa|isation).
Stage mode|s o change.
lrob|em identication as a precursor to change.
Cu|tura| processes o change i.e. change within the context o the who|e rm.
2. eva|uate too|s and methods or
successu||y imp|ementing a
change programme.
(a) eva|uate approaches to managing change,
(b) compare and contrast continuous and discontinuous change,
(c) eva|uate too|s, techniques and strategies or managing the change process,
(d) eva|uate the ro|e o |eadership in managing the change process.
1he importance o managing critica| periods o discontinuous change.
1oo|s, techniques and mode|s associated with organisationa| change.
Approaches, sty|es and strategies o change management.
lmportance o adaptation and continuous change.
Leading change.
3. recommend change management
processes in support o
strategy imp|ementation.
(a) eva|uate the ro|e o change management in the context o strategy imp|ementation,
(b) eva|uate ethica| issues and their reso|ution in the context o organisationa| change.
Change management and its ro|e in the successu| imp|ementation o strategy.
1he advantages and disadvantages o dierent sty|es o management on the successu| imp|ementation o strategy.
Croup ormation within organisation and its impact on change processes within organisations.
usiness ethics in genera| and the ClMA Code o Lthics or lroessiona| Accountants (larts A and ) in the context o
imp|ementation o strategic p|ans.
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E^Z] <hfihg^gm
1. eva|uate the process o
strategy deve|opment.
(a) eva|uate the process o strategy ormu|ation,
(b) eva|uate strategic options,
(c) eva|uate dierent organisationa| structures,
(d) discuss the ro|e and responsibi|ities o directors in the strategy deve|opment process.
Mission statements and their use in orientating the organisation's strategy.
1he process o strategy ormu|ation.
1he identication and eva|uation o strategic options.
Strategic options generation (e.g. using Anso's product/mar|et matrix and lorter's generic strategies).
kea| Options as a too| or strategic ana|ysis. Note. Comp|ex numerica| questions wi|| not be set.
Scenario p|anning and |ong range p|anning as too|s in strategic decision-ma|ing.
Came theoretic approaches to strategic p|anning and decision-ma|ing. Note. Comp|ex numerica| questions wi|| not be set.
Acquisition, divestment, rationa|isation and re|ocations strategies and their p|ace in the strategic p|an.
1he re|ationship between strategy and organisationa| structure.
1he ro|e and responsibi|ities o directors in ma|ing strategic decisions (inc|uding issues o due di|igence, duciary responsibi|ities).
2. eva|uate too|s and techniques
used in strategy ormu|ation.
(a) eva|uate strategic ana|ysis too|s,
(b) recommend appropriate changes to the product porto|io o an
organisation to support the organisation's strategic goa|s,
(c) produce an organisation's va|ue chain,
(d) discuss both qua|itative and quantitative techniques in the
support o the strategic decision ma|ing unction.
Audit o resources and the ana|ysis o this or use in strategic decision-ma|ing.
lorecasting and the various techniques used. trend ana|ysis, system mode||ing, in-depth consu|tation with experts (Le|phi method).
Management o the product porto|io.
va|ue chain ana|ysis.
Strategic decision-ma|ing processes.
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53
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1. advise on important e|ements in
the change process.
(a) discuss the concept o organisationa| change,
(b) recommend techniques to manage resistance to change.
Lxterna| and interna| change triggers (e.g. environmenta| actors, mergers and acquisitions, re organisation and rationa|isation).
Stage mode|s o change.
lrob|em identication as a precursor to change.
Cu|tura| processes o change i.e. change within the context o the who|e rm.
2. eva|uate too|s and methods or
successu||y imp|ementing a
change programme.
(a) eva|uate approaches to managing change,
(b) compare and contrast continuous and discontinuous change,
(c) eva|uate too|s, techniques and strategies or managing the change process,
(d) eva|uate the ro|e o |eadership in managing the change process.
1he importance o managing critica| periods o discontinuous change.
1oo|s, techniques and mode|s associated with organisationa| change.
Approaches, sty|es and strategies o change management.
lmportance o adaptation and continuous change.
Leading change.
3. recommend change management
processes in support o
strategy imp|ementation.
(a) eva|uate the ro|e o change management in the context o strategy imp|ementation,
(b) eva|uate ethica| issues and their reso|ution in the context o organisationa| change.
Change management and its ro|e in the successu| imp|ementation o strategy.
1he advantages and disadvantages o dierent sty|es o management on the successu| imp|ementation o strategy.
Croup ormation within organisation and its impact on change processes within organisations.
usiness ethics in genera| and the ClMA Code o Lthics or lroessiona| Accountants (larts A and ) in the context o
imp|ementation o strategic p|ans.
E^Z] <hfihg^gm
1. eva|uate the process o
strategy deve|opment.
(a) eva|uate the process o strategy ormu|ation,
(b) eva|uate strategic options,
(c) eva|uate dierent organisationa| structures,
(d) discuss the ro|e and responsibi|ities o directors in the strategy deve|opment process.
Mission statements and their use in orientating the organisation's strategy.
1he process o strategy ormu|ation.
1he identication and eva|uation o strategic options.
Strategic options generation (e.g. using Anso's product/mar|et matrix and lorter's generic strategies).
kea| Options as a too| or strategic ana|ysis. Note. Comp|ex numerica| questions wi|| not be set.
Scenario p|anning and |ong range p|anning as too|s in strategic decision-ma|ing.
Came theoretic approaches to strategic p|anning and decision-ma|ing. Note. Comp|ex numerica| questions wi|| not be set.
Acquisition, divestment, rationa|isation and re|ocations strategies and their p|ace in the strategic p|an.
1he re|ationship between strategy and organisationa| structure.
1he ro|e and responsibi|ities o directors in ma|ing strategic decisions (inc|uding issues o due di|igence, duciary responsibi|ities).
2. eva|uate too|s and techniques
used in strategy ormu|ation.
(a) eva|uate strategic ana|ysis too|s,
(b) recommend appropriate changes to the product porto|io o an
organisation to support the organisation's strategic goa|s,
(c) produce an organisation's va|ue chain,
(d) discuss both qua|itative and quantitative techniques in the
support o the strategic decision ma|ing unction.
Audit o resources and the ana|ysis o this or use in strategic decision-ma|ing.
lorecasting and the various techniques used. trend ana|ysis, system mode||ing, in-depth consu|tation with experts (Le|phi method).
Management o the product porto|io.
va|ue chain ana|ysis.
Strategic decision-ma|ing processes.
54
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1. eva|uate the too|s and processes
o strategy imp|ementation.
(a) recommend appropriate contro| measures,
(b) eva|uate a|ternative mode|s o perormance measurement,
(c) recommend so|utions to prob|ems in perormance measurement,
(d) advise managers on the deve|opment o strategies or |now|edge management
and inormation systems that support the organisation's strategic requirements,
(e) recommend changes to inormation systems appropriate to the organisation's
strategic requirements.
A|ternative mode|s o perormance measurement (e.g. the ba|anced scorecard).
usiness unit perormance and appraisa|, inc|uding transer pricing, reward systems and incentives.
lro|ect management. monitoring the imp|ementation o p|ans.
1he imp|ementation o |ean systems across an organisation.
1heories o contro| within organisations and types o organisationa| structure (e.g. matrix, divisiona|, networ|).
Assessing strategic perormance (i.e. the use and deve|opment o appropriate measures that are sensitive to industry
characteristics and environmenta| actors).
Non-nancia| measures and their interaction with nancia| ones. (Note. candidates wi|| be expected to use both
qua|itative and quantitative techniques).
1he purpose and contents o inormation systems strategies, and the need or strategy comp|ementary to the corporate
and individua| business strategies.
Critica| success actors. |in|s to perormance indicators and corporate strategy, and their use as a basis or dening an
organisation's inormation needs.
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55
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1. eva|uate the too|s and processes
o strategy imp|ementation.
(a) recommend appropriate contro| measures,
(b) eva|uate a|ternative mode|s o perormance measurement,
(c) recommend so|utions to prob|ems in perormance measurement,
(d) advise managers on the deve|opment o strategies or |now|edge management
and inormation systems that support the organisation's strategic requirements,
(e) recommend changes to inormation systems appropriate to the organisation's
strategic requirements.
A|ternative mode|s o perormance measurement (e.g. the ba|anced scorecard).
usiness unit perormance and appraisa|, inc|uding transer pricing, reward systems and incentives.
lro|ect management. monitoring the imp|ementation o p|ans.
1he imp|ementation o |ean systems across an organisation.
1heories o contro| within organisations and types o organisationa| structure (e.g. matrix, divisiona|, networ|).
Assessing strategic perormance (i.e. the use and deve|opment o appropriate measures that are sensitive to industry
characteristics and environmenta| actors).
Non-nancia| measures and their interaction with nancia| ones. (Note. candidates wi|| be expected to use both
qua|itative and quantitative techniques).
1he purpose and contents o inormation systems strategies, and the need or strategy comp|ementary to the corporate
and individua| business strategies.
Critica| success actors. |in|s to perormance indicators and corporate strategy, and their use as a basis or dening an
organisation's inormation needs.
56
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lnormation Systems

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1wo |ey issues underpin laper l3 what ris|s does the
organisation ace and how can those ris|s be managed and
contro||ed? 1he scope o the paper inc|udes both nancia| and
non-nancia| ris|s. 1he management strategies covered extend
to the use o nancia| instruments, and more genera| strategies
o ris| identication and management, invo|ving estab|ishing
and monitoring appropriate systems o interna| contro|. vith
the growing importance o 'new' sources o ris|, the paper pays
particu|ar attention to ris|s arising rom governance, ethica| and
socia| /environmenta| issues.
:
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E^Z] <hfihg^gm
1. eva|uate contro| systems or
organisationa| activities and resources.
(a) eva|uate appropriate contro| systems or the management o an organisation,
(b) eva|uate the appropriateness o an organisation's management
accounting contro| systems,
(c) eva|uate the contro| o activities and resources within an organisation,
(d) recommend ways in which identied wea|nesses or prob|ems
associated with contro| systems can be avoided or so|ved.
1he ways in which systems are used to achieve contro| within the ramewor| o an organisation (e.g. contracts o emp|oyment,
po|icies and procedures, discip|ine and reward, reporting structures, perormance appraisa| and eedbac|).
1he app|ication o contro| systems and re|ated theory to the design o management accounting contro| systems and inormation
systems in genera| (i.e. contro| system components, primary and secondary eedbac|, positive and negative eedbac|,
open and c|osed-|oop contro|).
Structure and operation o management accounting contro| systems (e.g. identication o appropriate responsibi|ity and
contro| centres within the organisation, perormance target setting, avoiding unintended behavioura| consequences o using
management accounting contro|s).
variation in contro| needs and systems dependent on organisationa| structure (e.g. extent o centra|isation versus divisiona|isation,
management through strategic business units).
Assessing how |ean the management accounting system is (e.g. extent o the need or detai|ed costing, overhead a||ocation and
budgeting, identication o non-va|ue adding activities in the accounting unction).
Cost o qua|ity app|ied to the management accounting unction and "getting things right rst time".
I,:'F:G:@>F>GM<HGMKHELRLM>FL!*)"
A
E
D
C
B
57
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Section A 50 mar|s
a|| re|ating to a pre-seen case study and urther new un-seen case
(Note. 1he preseen case study is common to a|| three o the strategic |eve| papers at
each examination sitting i.e. paper L3, l3 and l3).
Section 50 mar|s
E^Z] <hfihg^gm
1. eva|uate contro| systems or
organisationa| activities and resources.
(a) eva|uate appropriate contro| systems or the management o an organisation,
(b) eva|uate the appropriateness o an organisation's management
accounting contro| systems,
(c) eva|uate the contro| o activities and resources within an organisation,
(d) recommend ways in which identied wea|nesses or prob|ems
associated with contro| systems can be avoided or so|ved.
1he ways in which systems are used to achieve contro| within the ramewor| o an organisation (e.g. contracts o emp|oyment,
po|icies and procedures, discip|ine and reward, reporting structures, perormance appraisa| and eedbac|).
1he app|ication o contro| systems and re|ated theory to the design o management accounting contro| systems and inormation
systems in genera| (i.e. contro| system components, primary and secondary eedbac|, positive and negative eedbac|,
open and c|osed-|oop contro|).
Structure and operation o management accounting contro| systems (e.g. identication o appropriate responsibi|ity and
contro| centres within the organisation, perormance target setting, avoiding unintended behavioura| consequences o using
management accounting contro|s).
variation in contro| needs and systems dependent on organisationa| structure (e.g. extent o centra|isation versus divisiona|isation,
management through strategic business units).
Assessing how |ean the management accounting system is (e.g. extent o the need or detai|ed costing, overhead a||ocation and
budgeting, identication o non-va|ue adding activities in the accounting unction).
Cost o qua|ity app|ied to the management accounting unction and "getting things right rst time".
58
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E^Z] <hfihg^gm
1. eva|uate types o ris| acing
an organisation.
(a) discuss ways o identiying, measuring and assessing the types o ris| acing an
organisation, inc|uding the organisation's abi|ity to bear such ris|s,
(b) eva|uate ris|s acing an organisation.
1ypes and sources o ris| or business organisations. nancia|, commodity price, business (e.g. rom raud, emp|oyee
ma|easance, |itigation, contractua| inadequacy, |oss o product reputation), techno|ogica|, externa| (e.g. economic and po|itica|),
and corporate reputation (e.g. rom environmenta| and socia| perormance or hea|th and saety) ris|s.
lraud re|ated to sources o nance (e.g. advance ee raud and pyramid schemes).
kis|s associated with internationa| operations (e.g. rom cu|tura| variations and |itigation ris|, to |oss o goods in transit
and enhanced credit ris|). (Note. No specic rea| country wi|| be tested).
Quantication o ris| exposures (impact i an adverse event occurs) and their expected va|ues, ta|ing account o |i|e|ihood.
lnormation required to u||y report on ris| exposures.
kis| map representation o ris| exposures as a basis or reporting and ana|ysing ris|s.

2. eva|uate ris| management
strategies and interna| contro|s.
(a) discuss the purposes and importance o interna| contro| and ris|
management or an organisation,
(b) eva|uate ris| management strategies,
(c) eva|uate the essentia| eatures o interna| contro| systems or
identiying, assessing and managing ris|s,
(d) eva|uate the costs and benets o a particu|ar interna| contro| system.
lurposes and importance o interna| contro| and ris| management or an organisation.
lssues to be addressed in dening management's ris| po|icy.
1he princip|e o diversiying ris|. (Note. Numerica| questions wi|| not be set).
Minimising the ris| o raud (e.g. raud po|icy statements, eective recruitment po|icies and good interna| contro|s, such as
approva| procedures and separation o unctions, especia||y over procurement and cash).
1he ris| manager ro|e (inc|uding as part o a set o ro|es) as distinct rom that o interna| auditor.
lurposes o interna| contro| (e.g. saeguarding o shareho|ders' investment and company assets, aci|itation o operationa|
eectiveness and eciency, contribution to the re|iabi|ity o reporting).
L|ements in interna| contro| systems (e.g. contro| activities, inormation and communication processes, processes or
ensuring continued eectiveness etc).
Operationa| eatures o interna| contro| systems (e.g. embedding in company's operations, responsiveness to evo|ving ris|s,
time|y reporting to management).
1he pervasive nature o interna| contro| and the need or emp|oyee training.
Costs and benets o maintaining the interna| contro| system.
3. eva|uate governance and ethica|
issues acing an organisation.
(a) discuss the princip|es o good corporate governance, particu|ar|y as
regards the need or interna| contro|s,
(b) eva|uate ethica| issues as a source o ris| to the organisation and
contro| mechanisms or their detection and reso|ution.
1he princip|es o good corporate governance based on those or |isted companies (the Combined Code), e.g. separation o
chairman and CLO ro|es, appointment o non-executive directors, transparency o directors' remuneration po|icy, re|ations with
shareho|ders, the audit committee. Other examp|es o recommended good practice may inc|ude 1he King keport on Corporate
Covernance or South Arica, Sarbanes-Ox|ey Act in the USA, 1he Smith and Higgs keports in the UK, etc).
kecommendations or interna| contro| (e.g. 1he 1urnbu|| keport).
Lthica| issues identied in the ClMA Code o Lthics or lroessiona| Accountants, mechanisms or detection in
practice and supporting comp|iance.
I,;'KBLD:G=BGM>KG:E<HGMKHE!+."
59
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E^Z] <hfihg^gm
1. eva|uate types o ris| acing
an organisation.
(a) discuss ways o identiying, measuring and assessing the types o ris| acing an
organisation, inc|uding the organisation's abi|ity to bear such ris|s,
(b) eva|uate ris|s acing an organisation.
1ypes and sources o ris| or business organisations. nancia|, commodity price, business (e.g. rom raud, emp|oyee
ma|easance, |itigation, contractua| inadequacy, |oss o product reputation), techno|ogica|, externa| (e.g. economic and po|itica|),
and corporate reputation (e.g. rom environmenta| and socia| perormance or hea|th and saety) ris|s.
lraud re|ated to sources o nance (e.g. advance ee raud and pyramid schemes).
kis|s associated with internationa| operations (e.g. rom cu|tura| variations and |itigation ris|, to |oss o goods in transit
and enhanced credit ris|). (Note. No specic rea| country wi|| be tested).
Quantication o ris| exposures (impact i an adverse event occurs) and their expected va|ues, ta|ing account o |i|e|ihood.
lnormation required to u||y report on ris| exposures.
kis| map representation o ris| exposures as a basis or reporting and ana|ysing ris|s.

2. eva|uate ris| management
strategies and interna| contro|s.
(a) discuss the purposes and importance o interna| contro| and ris|
management or an organisation,
(b) eva|uate ris| management strategies,
(c) eva|uate the essentia| eatures o interna| contro| systems or
identiying, assessing and managing ris|s,
(d) eva|uate the costs and benets o a particu|ar interna| contro| system.
lurposes and importance o interna| contro| and ris| management or an organisation.
lssues to be addressed in dening management's ris| po|icy.
1he princip|e o diversiying ris|. (Note. Numerica| questions wi|| not be set).
Minimising the ris| o raud (e.g. raud po|icy statements, eective recruitment po|icies and good interna| contro|s, such as
approva| procedures and separation o unctions, especia||y over procurement and cash).
1he ris| manager ro|e (inc|uding as part o a set o ro|es) as distinct rom that o interna| auditor.
lurposes o interna| contro| (e.g. saeguarding o shareho|ders' investment and company assets, aci|itation o operationa|
eectiveness and eciency, contribution to the re|iabi|ity o reporting).
L|ements in interna| contro| systems (e.g. contro| activities, inormation and communication processes, processes or
ensuring continued eectiveness etc).
Operationa| eatures o interna| contro| systems (e.g. embedding in company's operations, responsiveness to evo|ving ris|s,
time|y reporting to management).
1he pervasive nature o interna| contro| and the need or emp|oyee training.
Costs and benets o maintaining the interna| contro| system.
3. eva|uate governance and ethica|
issues acing an organisation.
(a) discuss the princip|es o good corporate governance, particu|ar|y as
regards the need or interna| contro|s,
(b) eva|uate ethica| issues as a source o ris| to the organisation and
contro| mechanisms or their detection and reso|ution.
1he princip|es o good corporate governance based on those or |isted companies (the Combined Code), e.g. separation o
chairman and CLO ro|es, appointment o non-executive directors, transparency o directors' remuneration po|icy, re|ations with
shareho|ders, the audit committee. Other examp|es o recommended good practice may inc|ude 1he King keport on Corporate
Covernance or South Arica, Sarbanes-Ox|ey Act in the USA, 1he Smith and Higgs keports in the UK, etc).
kecommendations or interna| contro| (e.g. 1he 1urnbu|| keport).
Lthica| issues identied in the ClMA Code o Lthics or lroessiona| Accountants, mechanisms or detection in
practice and supporting comp|iance.
60
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E^Z] <hfihg^gm
1. discuss the importance o
management review o contro|s.
(a) discuss the importance o management review o contro|s. 1he process o review (e.g. regu|ar reporting to management on the eectiveness o interna| contro|s over signicant ris|s)
and audit o interna| contro|s.
Ma|or too|s avai|ab|e to assist with a review and audit process (e.g. audit p|anning, documenting systems, interna| contro|
questionnaires, samp|ing and testing).

2. eva|uate the process and purposes
o audit in the context o interna|
contro| systems.
(a) eva|uate the process o interna| audit and its re|ationship to other orms o audit,
(b) produce a p|an or the audit o various organisationa| activities
inc|uding management, accounting and inormation systems,
(c) recommend action to avoid or so|ve prob|ems associated with the
audit o activities and systems,
(d) recommend action to improve the eciency, eectiveness and contro| o activities,
(e) discuss the re|ationship between interna| and externa| audit wor|.
ko|e o the interna| auditor and re|ationship o the interna| audit to the externa| audit.
ke|ationship o interna| audit to other orms o audit (e.g. va|ue-or-money audit, management audit, socia| and environmenta| audit).
Operation o interna| audit, the assessment o audit ris| and the process o ana|ytica| review, inc|uding dierent
types o benchmar|ing, their use and |imitations.
larticu|ar re|evance o the undamenta| princip|es in ClMA's Lthica| Cuide|ines to the conduct o an impartia| and
eective review o interna| contro|s.
Letection and investigation o raud.
1he nature o the externa| audit and its process, inc|uding the imp|ications o interna| audit ndings or externa| audit procedures.
3. discuss corporate governance
and ethica| issues acing
an organisation.
(a) discuss the princip|es o good corporate governance or |isted companies, or conducting
reviews o interna| contro|s and reporting on comp|iance,
(b) discuss the importance o exercising ethica| princip|es in conducting
and reporting on interna| reviews.
1he princip|es o good corporate governance or |isted companies, or the review o the interna| contro| system
and reporting on comp|iance.
App|ication o the ClMA Code o Lthics or lroessiona| Accountants to the reso|ution o ethica| conicts in the context
o discoveries made in the course o interna| review, especia||y section 210.
I,<'K>OB>P:G=:N=BMH?<HGMKHELRLM>FL!*."
E^Z] <hfihg^gm
1. eva|uate nancia| ris|s acing
an organisation.
(a) eva|uate nancia| ris|s acing an organisation. Sources o nancia| ris|, inc|uding those associated with internationa| operations (e.g. hedging o oreign investment va|ue)
and trading (e.g. purchase prices and sa|es va|ues).
1ransaction, trans|ation, economic and po|itica| ris|.
Quantication o ris| exposures, their sensitivities to changes in externa| conditions and their expected va|ues.

2. eva|uate a|ternative ris|
management too|s.
(a) eva|uate appropriate methods or managing nancia| ris|s,
(b) eva|uate the eects o a|ternative methods o ris| management,
(c) discuss exchange rate theory and the impact o dierentia| ination
rates on orecast exchange rates,
(d) recommend ris| management strategies and discuss their accounting imp|ications.
Minimising po|itica| ris| (e.g. gaining government unding, |oint ventures, obtaining |oca| nance).
Operation and eatures o the more common instruments or managing interest rate ris|. swaps, orward rate agreements,
utures and options. (Note. Numerica| questions wi|| not be set invo|ving lkA's, utures or options. See the note be|ow re|ating
to the |ac| Scho|es mode|).
Operation and eatures o the more common instruments or managing currency ris|. swaps, orward contracts, money mar|et
hedges, utures and options. (Note. 1he |ac| Scho|es option pricing mode| wi|| not be tested numerica||y, however, an
understanding o the variab|es which wi|| inuence the va|ue o an option shou|d be appreciated).
Simp|e graphs depicting cap, co||ar and oor interest rate options.
1heory and orecasting o exchange rates (e.g. interest rate parity, purchasing power parity and the lisher eect).
lrincip|es o va|uation o nancia| instruments or management and nancia| reporting purposes (lAS 39), and contro|s to ensure that
the appropriate accounting method is app|ied to a given instrument.
Quantication and disc|osure o the sensitivity o nancia| instrument va|ues to changes in externa| conditions.
lnterna| hedging techniques (e.g. netting and matching).
I,='F:G:@>F>GMH??BG:G<B:EKBLD!,."
61
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^
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E^Z] <hfihg^gm
1. discuss the importance o
management review o contro|s.
(a) discuss the importance o management review o contro|s. 1he process o review (e.g. regu|ar reporting to management on the eectiveness o interna| contro|s over signicant ris|s)
and audit o interna| contro|s.
Ma|or too|s avai|ab|e to assist with a review and audit process (e.g. audit p|anning, documenting systems, interna| contro|
questionnaires, samp|ing and testing).

2. eva|uate the process and purposes
o audit in the context o interna|
contro| systems.
(a) eva|uate the process o interna| audit and its re|ationship to other orms o audit,
(b) produce a p|an or the audit o various organisationa| activities
inc|uding management, accounting and inormation systems,
(c) recommend action to avoid or so|ve prob|ems associated with the
audit o activities and systems,
(d) recommend action to improve the eciency, eectiveness and contro| o activities,
(e) discuss the re|ationship between interna| and externa| audit wor|.
ko|e o the interna| auditor and re|ationship o the interna| audit to the externa| audit.
ke|ationship o interna| audit to other orms o audit (e.g. va|ue-or-money audit, management audit, socia| and environmenta| audit).
Operation o interna| audit, the assessment o audit ris| and the process o ana|ytica| review, inc|uding dierent
types o benchmar|ing, their use and |imitations.
larticu|ar re|evance o the undamenta| princip|es in ClMA's Lthica| Cuide|ines to the conduct o an impartia| and
eective review o interna| contro|s.
Letection and investigation o raud.
1he nature o the externa| audit and its process, inc|uding the imp|ications o interna| audit ndings or externa| audit procedures.
3. discuss corporate governance
and ethica| issues acing
an organisation.
(a) discuss the princip|es o good corporate governance or |isted companies, or conducting
reviews o interna| contro|s and reporting on comp|iance,
(b) discuss the importance o exercising ethica| princip|es in conducting
and reporting on interna| reviews.
1he princip|es o good corporate governance or |isted companies, or the review o the interna| contro| system
and reporting on comp|iance.
App|ication o the ClMA Code o Lthics or lroessiona| Accountants to the reso|ution o ethica| conicts in the context
o discoveries made in the course o interna| review, especia||y section 210.
E^Z] <hfihg^gm
1. eva|uate nancia| ris|s acing
an organisation.
(a) eva|uate nancia| ris|s acing an organisation. Sources o nancia| ris|, inc|uding those associated with internationa| operations (e.g. hedging o oreign investment va|ue)
and trading (e.g. purchase prices and sa|es va|ues).
1ransaction, trans|ation, economic and po|itica| ris|.
Quantication o ris| exposures, their sensitivities to changes in externa| conditions and their expected va|ues.

2. eva|uate a|ternative ris|
management too|s.
(a) eva|uate appropriate methods or managing nancia| ris|s,
(b) eva|uate the eects o a|ternative methods o ris| management,
(c) discuss exchange rate theory and the impact o dierentia| ination
rates on orecast exchange rates,
(d) recommend ris| management strategies and discuss their accounting imp|ications.
Minimising po|itica| ris| (e.g. gaining government unding, |oint ventures, obtaining |oca| nance).
Operation and eatures o the more common instruments or managing interest rate ris|. swaps, orward rate agreements,
utures and options. (Note. Numerica| questions wi|| not be set invo|ving lkA's, utures or options. See the note be|ow re|ating
to the |ac| Scho|es mode|).
Operation and eatures o the more common instruments or managing currency ris|. swaps, orward contracts, money mar|et
hedges, utures and options. (Note. 1he |ac| Scho|es option pricing mode| wi|| not be tested numerica||y, however, an
understanding o the variab|es which wi|| inuence the va|ue o an option shou|d be appreciated).
Simp|e graphs depicting cap, co||ar and oor interest rate options.
1heory and orecasting o exchange rates (e.g. interest rate parity, purchasing power parity and the lisher eect).
lrincip|es o va|uation o nancia| instruments or management and nancia| reporting purposes (lAS 39), and contro|s to ensure that
the appropriate accounting method is app|ied to a given instrument.
Quantication and disc|osure o the sensitivity o nancia| instrument va|ues to changes in externa| conditions.
lnterna| hedging techniques (e.g. netting and matching).
62
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E^Z] <hfihg^gm
1. eva|uate the benets and
ris|s associated with inormation-
re|ated systems .
(a) advise managers on the deve|opment o inormation management (lM),
inormation systems (lS) and inormation techno|ogy (l1) strategies
that support management and interna| contro| requirements,
(b) eva|uate lS/l1 systems appropriate to an organisation's needs or
operationa| and contro| inormation,
(c) eva|uate benets and ris|s in the structuring and organisation o the
lS/l1 unction and its integration with the rest o the business,
(d) recommend improvements to the contro| o lS,
(e) eva|uate specic prob|ems and opportunities associated with the
audit and contro| o systems which use l1.
1he importance and characteristics o inormation or organisations and the use o cost-benet ana|ysis to assess its va|ue.
1he purpose and content o lM, lS and l1 strategies, and their ro|e in perormance management and interna| contro|.
Lata co||ection and l1 systems that de|iver inormation to dierent |eve|s in the organisation (e.g. transaction processing,
decision support and executive inormative systems).
1he potentia| ways o organising the l1 unction (e.g. the use o steering committees, support centres or advice and he|p
des| aci|ities, end user participation).
1he arguments or and against outsourcing.
Methods or securing systems and data bac|-up in case o systems ai|ure and/or data |oss.
Minimising the ris| o computer-based raud (e.g. access restriction, password protection, access |ogging and automatic
generation o audit trai|).
kis|s in lS/l1 systems. erroneous input, unauthorised usage, imported virus inection, un|icensed use o sotware, thet,
corruption o sotware, etc.
kis|s and benets o lnternet and lntranet use by an organisation.
1he criteria or se|ecting outsourcing/aci|ities management partners and or managing ongoing re|ationships, service |eve|
agreements, discontinuation/change o supp|ier, hand-over considerations.
Contro|s which can be designed into an inormation system, particu|ar|y one using l1
(e.g. security, integrity and contingency contro|s).
Contro| and audit o systems deve|opment and imp|ementation.
1echniques avai|ab|e to assist audit in a computerised environment (computer-assisted audit techniques e.g. audit
interrogation sotware).

I,>'KBLD:G=<HGMKHEBGBG?HKF:MBHGLRLM>FL!*."
63
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`
b
\
e
^
o
^
e
E^Z] <hfihg^gm
1. eva|uate the benets and
ris|s associated with inormation-
re|ated systems .
(a) advise managers on the deve|opment o inormation management (lM),
inormation systems (lS) and inormation techno|ogy (l1) strategies
that support management and interna| contro| requirements,
(b) eva|uate lS/l1 systems appropriate to an organisation's needs or
operationa| and contro| inormation,
(c) eva|uate benets and ris|s in the structuring and organisation o the
lS/l1 unction and its integration with the rest o the business,
(d) recommend improvements to the contro| o lS,
(e) eva|uate specic prob|ems and opportunities associated with the
audit and contro| o systems which use l1.
1he importance and characteristics o inormation or organisations and the use o cost-benet ana|ysis to assess its va|ue.
1he purpose and content o lM, lS and l1 strategies, and their ro|e in perormance management and interna| contro|.
Lata co||ection and l1 systems that de|iver inormation to dierent |eve|s in the organisation (e.g. transaction processing,
decision support and executive inormative systems).
1he potentia| ways o organising the l1 unction (e.g. the use o steering committees, support centres or advice and he|p
des| aci|ities, end user participation).
1he arguments or and against outsourcing.
Methods or securing systems and data bac|-up in case o systems ai|ure and/or data |oss.
Minimising the ris| o computer-based raud (e.g. access restriction, password protection, access |ogging and automatic
generation o audit trai|).
kis|s in lS/l1 systems. erroneous input, unauthorised usage, imported virus inection, un|icensed use o sotware, thet,
corruption o sotware, etc.
kis|s and benets o lnternet and lntranet use by an organisation.
1he criteria or se|ecting outsourcing/aci|ities management partners and or managing ongoing re|ationships, service |eve|
agreements, discontinuation/change o supp|ier, hand-over considerations.
Contro|s which can be designed into an inormation system, particu|ar|y one using l1
(e.g. security, integrity and contingency contro|s).
Contro| and audit o systems deve|opment and imp|ementation.
1echniques avai|ab|e to assist audit in a computerised environment (computer-assisted audit techniques e.g. audit
interrogation sotware).

64
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: lormu|ation o +.
linancia| Strategy
; linancing Lecisions ,)
< lnvestment Lecisions -.
and lro|ect Contro|
I:I>K?,
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laper l3 dea|s with the |ey e|ements in designing and managing
the organisation's nancia| strategy, in the context o contributing
to achieving the organisation's ob|ectives and within its externa|
constraints, such as the genera| regu|atory and investment
environment. 1he eatures and imp|ications o the u|| range o
ma|or nancing instruments are covered. A broad range o types o
investment decision is a|so covered and it is recognised throughout
that such decisions need to ta|e account o broader strategic issues
as we|| the nancia| ana|ysis.
E^Z] <hfihg^gm
1. discuss potentia| strategic nancia|
ob|ectives, and the re|ationships
among and constraints on the
e|ements o nancia| strategy.
(a) discuss the potentia| strategic nancia| ob|ectives o an organisation,
(b) discuss the interre|ationships between decisions concerning
investment, nancing and dividends,
(c) discuss the impact o interna| and externa| constraints on nancia|
strategy, inc|uding the impact o regu|ation on business combinations.
1he nancia| and non-nancia| ob|ectives o dierent organisations (e.g. va|ue or money, maximising
shareho|der wea|th, providing a surp|us).
1he three |ey decisions o nancia| management (investment, nancing and dividend) and their |in|s.
enets o matching characteristics o investment and nancing in the |onger term, (e.g. in cross-border investment)
and in short-term hedging strategies.
Considerations in the ormu|ation o dividend po|icy and dividend decisions, inc|uding meeting the cash needs o the business.
Lxterna| constraints on nancia| strategy (e.g. unding, regu|atory bodies, investor re|ations, strategy, and economic actors).
Leve|oping nancia| strategy in the context o regu|atory requirements (e.g. price and service contro|s exercised by industry
regu|ators) and internationa| operations.
1he imp|ications o regu|ation or business combinations. (Note. Letai|ed |now|edge o the City Code and LU competition
ru|es wi|| not be tested).
?,:'?HKFNE:MBHGH??BG:G<B:ELMK:M>@R!+."
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A
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B
65
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Section A 50 mar|s
a|| re|ating to a pre-seen case study and urther new un-seen case
(Note. 1he pre-seen case study is common to a|| three o the strategic |eve| papers
at each examination sitting i.e. laper L3, l3 and l3).
Section 50 mar|s
E^Z] <hfihg^gm
1. discuss potentia| strategic nancia|
ob|ectives, and the re|ationships
among and constraints on the
e|ements o nancia| strategy.
(a) discuss the potentia| strategic nancia| ob|ectives o an organisation,
(b) discuss the interre|ationships between decisions concerning
investment, nancing and dividends,
(c) discuss the impact o interna| and externa| constraints on nancia|
strategy, inc|uding the impact o regu|ation on business combinations.
1he nancia| and non-nancia| ob|ectives o dierent organisations (e.g. va|ue or money, maximising
shareho|der wea|th, providing a surp|us).
1he three |ey decisions o nancia| management (investment, nancing and dividend) and their |in|s.
enets o matching characteristics o investment and nancing in the |onger term, (e.g. in cross-border investment)
and in short-term hedging strategies.
Considerations in the ormu|ation o dividend po|icy and dividend decisions, inc|uding meeting the cash needs o the business.
Lxterna| constraints on nancia| strategy (e.g. unding, regu|atory bodies, investor re|ations, strategy, and economic actors).
Leve|oping nancia| strategy in the context o regu|atory requirements (e.g. price and service contro|s exercised by industry
regu|ators) and internationa| operations.
1he imp|ications o regu|ation or business combinations. (Note. Letai|ed |now|edge o the City Code and LU competition
ru|es wi|| not be tested).
66
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E^Z] <hfihg^gm
2. eva|uate the nancia|
strategies and ob|ectives o an
organisation and the extent o
their attainment.
(a) identiy an organisation's ob|ectives in nancia| terms,
(b) eva|uate the attainment o an organisation's nancia| ob|ectives,
(c) eva|uate current and orecast perormance ta|ing account o potentia|
variations in economic and business actors,
(d) eva|uate a|ternative nancia| strategies or an organisation ta|ing account o externa|
assessment o the organisation by nanciers and other sta|eho|ders, inc|uding |i|e|y
changes to such assessment in the |ight o deve|opments in reporting.
1he nancia| ob|ectives o an organisation and economic orces aecting its nancia| p|ans (e.g. interest, ination and exchange rates).
Assessing attainment o nancia| ob|ectives.
Use o nancia| ana|ysis in the externa| assessment o a company (e.g. in assessing creditworthiness and comp|iance
with nancing covenants).
Mode||ing and orecasting cash ows and nancia| statements based on expected va|ues or economic variab|es
(e.g. interest rates) and business variab|es (e.g. vo|ume and margins) over a number o years.
Ana|ysis o sensitivity to changes in expected va|ues in the above mode|s and orecasts.
Assessing the imp|ications or shareho|der va|ue o a|ternative nancia| strategies, inc|uding dividend po|icy. (Note. Modig|iani
and Mi||er's theory o dividend irre|evancy wi|| be tested in broad terms. 1he mathematica| proo o the mode| wi|| not be required,
but some understanding o the graphica| method is expected).
1he |ender's assessment o creditworthiness.
Current and emerging issues in nancia| reporting (e.g. proposa|s to amend or introduce new accounting standards) and in other
orms o externa| reporting (e.g. environmenta| accounting).
?,:'?HKFNE:MBHGH??BG:G<B:ELMK:M>@R!+."\hgmbgn^]
E^Z] <hfihg^gm
1. eva|uate the nancing requirements
o an organisation and strategies or
meeting those requirements.
(a) ana|yse the short and |ong-term nancing requirements o an organisation,
(b) eva|uate a|ternative methods o meeting nancing requirements, ta|ing account
o the imp|ications or the organisation's nancia| statements, its tax position
and nancia| sta|eho|ders,
(c) eva|uate the weighted average cost o capita| o an organisation,
(d) recommend methods o unding specic investments, ta|ing account o basic tax
considerations and ris| exposures (to interest and currency exchange rate uctuations),
(e) recommend optima| strategies or the management o wor|ing
capita| and satisaction o |onger term nancing requirements.
ldentiying nancing requirements (both in respect o domestic and internationa| operations) and the impacts o dierent
types o nance on mode|s and orecasts o perormance and position.
vor|ing capita| management strategies. (Note. No detai|ed testing o cash and stoc| management mode|s wi|| be set since
these are covered at a |ower |eve| within the sy||abus).
1ypes and eatures o domestic and internationa| |ong-term nance. share capita| (ordinary and preerence shares, warrants),
|ong-term debt (ban| borrowing and orms o securitised debt, e.g. convertib|es) and nance |eases, and methods o issuing securities.
1he operation o stoc| exchanges (e.g. how share prices are determined, what causes share prices to rise or a||, and the ecient
mar|et hypothesis). (Note. No detai|ed |now|edge o any specic country's stoc| exchange wi|| be tested).
1he impact o changing capita| structure on the mar|et va|ue o a company. (Note. An understanding o Modig|iani and Mi||er's
theory o gearing, with and without taxes, wi|| be expected, but proo o their theory wi|| not be examined).
1he capita| asset pricing mode| (CAlM). ca|cu|ation o the cost o equity using the dividend growth mode| (|now|edge o methods
o ca|cu|ating and estimating dividend growth wi|| be expected), the abi|ity to gear and un-gear betas and comparison to the
arbitrage pricing mode|.
1he ideas o diversiab|e ris| (unsystematic ris|) and systematic ris|. (Note. use o the two-asset porto|io ormu|a wi|| not be tested).
1he cost o redeemab|e and irredeemab|e debt, inc|uding the tax shie|d on debt.
1he weighted average cost o capita| (vACC). ca|cu|ation, interpretation and uses.
1he |ease or buy decision (with both operating and nance |eases).
Criteria or se|ecting sources o nance, inc|uding nance or internationa| investments.
1he eect o nancing decisions on ba|ance sheet structure and on ratios o interest to investors and other nanciers
(gearing, earnings per share, price-earnings ratio, dividend yie|d, dividend cover gearing, interest cover).
2. discuss the treasury unction. a) discuss the ro|e and management o the treasury unction. 1he ro|e o the treasury unction in terms o setting corporate ob|ectives, |iquidity management, unding management,
and currency management.
1he advantages and disadvantages o estab|ishing treasury departments as prot centres or cost centres, and their contro|.
?,;'?BG:G<BG@=><BLBHGL!,)"
67
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2. eva|uate the nancia|
strategies and ob|ectives o an
organisation and the extent o
their attainment.
(a) identiy an organisation's ob|ectives in nancia| terms,
(b) eva|uate the attainment o an organisation's nancia| ob|ectives,
(c) eva|uate current and orecast perormance ta|ing account o potentia|
variations in economic and business actors,
(d) eva|uate a|ternative nancia| strategies or an organisation ta|ing account o externa|
assessment o the organisation by nanciers and other sta|eho|ders, inc|uding |i|e|y
changes to such assessment in the |ight o deve|opments in reporting.
1he nancia| ob|ectives o an organisation and economic orces aecting its nancia| p|ans (e.g. interest, ination and exchange rates).
Assessing attainment o nancia| ob|ectives.
Use o nancia| ana|ysis in the externa| assessment o a company (e.g. in assessing creditworthiness and comp|iance
with nancing covenants).
Mode||ing and orecasting cash ows and nancia| statements based on expected va|ues or economic variab|es
(e.g. interest rates) and business variab|es (e.g. vo|ume and margins) over a number o years.
Ana|ysis o sensitivity to changes in expected va|ues in the above mode|s and orecasts.
Assessing the imp|ications or shareho|der va|ue o a|ternative nancia| strategies, inc|uding dividend po|icy. (Note. Modig|iani
and Mi||er's theory o dividend irre|evancy wi|| be tested in broad terms. 1he mathematica| proo o the mode| wi|| not be required,
but some understanding o the graphica| method is expected).
1he |ender's assessment o creditworthiness.
Current and emerging issues in nancia| reporting (e.g. proposa|s to amend or introduce new accounting standards) and in other
orms o externa| reporting (e.g. environmenta| accounting).
E^Z] <hfihg^gm
1. eva|uate the nancing requirements
o an organisation and strategies or
meeting those requirements.
(a) ana|yse the short and |ong-term nancing requirements o an organisation,
(b) eva|uate a|ternative methods o meeting nancing requirements, ta|ing account
o the imp|ications or the organisation's nancia| statements, its tax position
and nancia| sta|eho|ders,
(c) eva|uate the weighted average cost o capita| o an organisation,
(d) recommend methods o unding specic investments, ta|ing account o basic tax
considerations and ris| exposures (to interest and currency exchange rate uctuations),
(e) recommend optima| strategies or the management o wor|ing
capita| and satisaction o |onger term nancing requirements.
ldentiying nancing requirements (both in respect o domestic and internationa| operations) and the impacts o dierent
types o nance on mode|s and orecasts o perormance and position.
vor|ing capita| management strategies. (Note. No detai|ed testing o cash and stoc| management mode|s wi|| be set since
these are covered at a |ower |eve| within the sy||abus).
1ypes and eatures o domestic and internationa| |ong-term nance. share capita| (ordinary and preerence shares, warrants),
|ong-term debt (ban| borrowing and orms o securitised debt, e.g. convertib|es) and nance |eases, and methods o issuing securities.
1he operation o stoc| exchanges (e.g. how share prices are determined, what causes share prices to rise or a||, and the ecient
mar|et hypothesis). (Note. No detai|ed |now|edge o any specic country's stoc| exchange wi|| be tested).
1he impact o changing capita| structure on the mar|et va|ue o a company. (Note. An understanding o Modig|iani and Mi||er's
theory o gearing, with and without taxes, wi|| be expected, but proo o their theory wi|| not be examined).
1he capita| asset pricing mode| (CAlM). ca|cu|ation o the cost o equity using the dividend growth mode| (|now|edge o methods
o ca|cu|ating and estimating dividend growth wi|| be expected), the abi|ity to gear and un-gear betas and comparison to the
arbitrage pricing mode|.
1he ideas o diversiab|e ris| (unsystematic ris|) and systematic ris|. (Note. use o the two-asset porto|io ormu|a wi|| not be tested).
1he cost o redeemab|e and irredeemab|e debt, inc|uding the tax shie|d on debt.
1he weighted average cost o capita| (vACC). ca|cu|ation, interpretation and uses.
1he |ease or buy decision (with both operating and nance |eases).
Criteria or se|ecting sources o nance, inc|uding nance or internationa| investments.
1he eect o nancing decisions on ba|ance sheet structure and on ratios o interest to investors and other nanciers
(gearing, earnings per share, price-earnings ratio, dividend yie|d, dividend cover gearing, interest cover).
2. discuss the treasury unction. a) discuss the ro|e and management o the treasury unction. 1he ro|e o the treasury unction in terms o setting corporate ob|ectives, |iquidity management, unding management,
and currency management.
1he advantages and disadvantages o estab|ishing treasury departments as prot centres or cost centres, and their contro|.
68
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1. eva|uate investment choices. (a) ana|yse re|evant costs, benets and ris|s o an investment pro|ect,
(b) eva|uate investment pro|ects (domestic and internationa|), inc|uding
their nancia| and strategic imp|ications, ta|ing account o potentia|
variations in business and economic actors,
(c) eva|uate potentia| investments in organisations o dierent types and intangib|e assets,
(d) recommend investment choice in the presence o capita| rationing
and/or rea| options.
ldentication o a pro|ect's re|evant costs (e.g. inrastructure, mar|eting and human resource deve|opment needs), benets
(inc|uding incrementa| eects on other activities as we|| as direct cash ows) and ris|s (i.e. nancia| and non-nancia|, inc|uding
reputation ris| arising rom ethica| considerations and ris|s o |ega| change or uncertainty).
Lin|ing investments with customer requirements and product/service design.
Lin|ing investment in lS/l1 with strategic, operationa| and contro| needs (particu|ar|y where ris|s and benets are dicu|t to quantiy).
Ca|cu|ation o a pro|ect's net present va|ue and interna| rate o return, inc|uding techniques or dea|ing with cash ows
denominated in a oreign currency and use o the weighted average cost o capita|.
1he modied interna| rate o return based on a pro|ect's "termina| va|ue" (reecting an assumed reinvestment rate).
1he eects o taxation (inc|uding oreign direct and withho|ding taxes), potentia| changes in economic actors (ination,
interest and exchange rates) and potentia| restrictions on remittances on these ca|cu|ations.
kecognising ris| using the certainty equiva|ent method (when given a ris| ree rate and certainty equiva|ent va|ues).
Ad|usted present va|ue. (Note. 1he two step method may be tested or debt introduced permanent|y and debt in p|ace or
the duration o the pro|ect).
va|uation bases or assets (e.g. historic cost, rep|acement cost and rea|isab|e va|ue), earnings (e.g. price/earnings mu|tip|es and
earnings yie|d) and cash ows (e.g. discounted cash ow, dividend yie|d and the dividend growth mode|).
1he strengths and wea|nesses o each va|uation method and when each is most suitab|e, e.g. by reerence to type o
investee organisation (service, capita| intensive etc).
lorms o intangib|e asset (inc|uding inte||ectua| property rights, brands etc). and methods o va|uation.
App|ication o the ecient mar|et hypothesis to business va|uations.
Se|ection o an appropriate cost o capita| or use in va|uation.
Capita| investment rea| options (i.e. to ma|e o||ow-on investment, abandon or wait).
Sing|e period capita| rationing or divisib|e and non-divisib|e pro|ects. (Note. Mu|ti-period rationing wi|| not be tested).
2. eva|uate opportunities or merger,
acquisition and divestment.
(a) eva|uate the nancia| and strategic imp|ications o proposa|s or
mergers and acquisitions, inc|uding their terms, post-transaction
va|ues and processes, and exit strategies,
(b) eva|uate the nancia| and strategic imp|ications o demergers and divestments.
kecognition o the interests o dierent sta|eho|der groups in mergers, acquisitions and company va|uations.
1he reasons or merger or acquisitions (e.g. synergistic benets).
lorms o consideration and terms or acquisitions (e.g. cash, shares, convertib|es and earn-out arrangements), and their nancia| eects.
1he post-merger or post-acquisition integration process (e.g. management transer and merger o systems).
1he unction/ro|e o management buy-outs and venture capita|ists.
1ypes o exit strategy and their imp|ications.
1he reasons or (e.g. strategic change, opportunity cost o investment) and mechanisms o demerger or divestment.
3. eva|uate procedures or
investment pro|ects.
(a) eva|uate procedures or the imp|ementation and contro| o investment pro|ects. lro|ect imp|ementation and contro| in the conceptua| stage, the deve|opment stage, the construction stage and initia|
manuacturing/operating stage.
lost comp|etion audit o investment pro|ects.
?,<'BGO>LMF>GM=><BLBHGL:G=IKHC><M<HGMKHE!-."
69
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E^Z] <hfihg^gm
1. eva|uate investment choices. (a) ana|yse re|evant costs, benets and ris|s o an investment pro|ect,
(b) eva|uate investment pro|ects (domestic and internationa|), inc|uding
their nancia| and strategic imp|ications, ta|ing account o potentia|
variations in business and economic actors,
(c) eva|uate potentia| investments in organisations o dierent types and intangib|e assets,
(d) recommend investment choice in the presence o capita| rationing
and/or rea| options.
ldentication o a pro|ect's re|evant costs (e.g. inrastructure, mar|eting and human resource deve|opment needs), benets
(inc|uding incrementa| eects on other activities as we|| as direct cash ows) and ris|s (i.e. nancia| and non-nancia|, inc|uding
reputation ris| arising rom ethica| considerations and ris|s o |ega| change or uncertainty).
Lin|ing investments with customer requirements and product/service design.
Lin|ing investment in lS/l1 with strategic, operationa| and contro| needs (particu|ar|y where ris|s and benets are dicu|t to quantiy).
Ca|cu|ation o a pro|ect's net present va|ue and interna| rate o return, inc|uding techniques or dea|ing with cash ows
denominated in a oreign currency and use o the weighted average cost o capita|.
1he modied interna| rate o return based on a pro|ect's "termina| va|ue" (reecting an assumed reinvestment rate).
1he eects o taxation (inc|uding oreign direct and withho|ding taxes), potentia| changes in economic actors (ination,
interest and exchange rates) and potentia| restrictions on remittances on these ca|cu|ations.
kecognising ris| using the certainty equiva|ent method (when given a ris| ree rate and certainty equiva|ent va|ues).
Ad|usted present va|ue. (Note. 1he two step method may be tested or debt introduced permanent|y and debt in p|ace or
the duration o the pro|ect).
va|uation bases or assets (e.g. historic cost, rep|acement cost and rea|isab|e va|ue), earnings (e.g. price/earnings mu|tip|es and
earnings yie|d) and cash ows (e.g. discounted cash ow, dividend yie|d and the dividend growth mode|).
1he strengths and wea|nesses o each va|uation method and when each is most suitab|e, e.g. by reerence to type o
investee organisation (service, capita| intensive etc).
lorms o intangib|e asset (inc|uding inte||ectua| property rights, brands etc). and methods o va|uation.
App|ication o the ecient mar|et hypothesis to business va|uations.
Se|ection o an appropriate cost o capita| or use in va|uation.
Capita| investment rea| options (i.e. to ma|e o||ow-on investment, abandon or wait).
Sing|e period capita| rationing or divisib|e and non-divisib|e pro|ects. (Note. Mu|ti-period rationing wi|| not be tested).
2. eva|uate opportunities or merger,
acquisition and divestment.
(a) eva|uate the nancia| and strategic imp|ications o proposa|s or
mergers and acquisitions, inc|uding their terms, post-transaction
va|ues and processes, and exit strategies,
(b) eva|uate the nancia| and strategic imp|ications o demergers and divestments.
kecognition o the interests o dierent sta|eho|der groups in mergers, acquisitions and company va|uations.
1he reasons or merger or acquisitions (e.g. synergistic benets).
lorms o consideration and terms or acquisitions (e.g. cash, shares, convertib|es and earn-out arrangements), and their nancia| eects.
1he post-merger or post-acquisition integration process (e.g. management transer and merger o systems).
1he unction/ro|e o management buy-outs and venture capita|ists.
1ypes o exit strategy and their imp|ications.
1he reasons or (e.g. strategic change, opportunity cost o investment) and mechanisms o demerger or divestment.
3. eva|uate procedures or
investment pro|ects.
(a) eva|uate procedures or the imp|ementation and contro| o investment pro|ects. lro|ect imp|ementation and contro| in the conceptua| stage, the deve|opment stage, the construction stage and initia|
manuacturing/operating stage.
lost comp|etion audit o investment pro|ects.
70
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1he 1est o lroessiona| Competence in Management Accounting
comprises two component parts that must both be achieved in
order to comp|ete the test. Credits are used to measure success,
rather than mar|s. 1o pass the 1est o lroessiona| Competence in
Management Accounting, students must achieve an aggregated
minimum o 75 credits comprising a minimum o 50 credits or
lart A (maximum 50 credits) and a minimum o 25 credits or lart
(maximum o 50 credits).
Students are advised to underta|e lart A and lart concurrent|y,
a|though either can be ta|en in any order once a|| strategic |eve|
examinations have been comp|eted. 1he overa|| resu|t or the 1est
o lroessiona| Competence in Management Accounting can on|y
be given when both component parts have been comp|eted.
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Ho^kob^p
Students must gain a minimum o three years' re|evant wor| based
practica| experience. Lxperience may be drawn rom any o the
o||owing three areas, but a minimum o 18 months must be gained
within the 'Core' area.
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1a. lreparing and maintaining
accounting records
2a. lreparation o management accounts 3a. linancia| strategy
1b. Statutory and regu|atory reporting 2b. l|anning, budgeting and orecasting 3b. Corporate nance
1c. l1 des|top s|i||s 2c. Management reporting or
decision ma|ing
3c. 1reasury management
1d. Systems and procedure deve|opment 2d. lroduct and service costing 3d. 1axation
2e. lnormation management 3e. usiness eva|uation and appraisa|
2. lro|ect appraisa| 3. usiness strategy
2g. lro|ect management 3g. Lxterna| re|ationships
2h. vor|ing capita| contro|
2i. kis| management and
business assurance
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71
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lractica| experience must be recorded by students within a Career
lro|e and submitted to ClMA or assessment. An approved Career
lro|e is awarded 50 credits the amount needed to meet the
requirements or lart A o the 1est o lroessiona| Competence in
lu|| detai|s o the practica| experience requirements and how
to comp|ete the ClMA Career lro|e can be ound on the ClMA
website and within a separate pub|ication entit|ed 'lractica|
Lxperience kequirements'. Lmp|oyers and their students are advised
to reer to these documents.
M-I:KM;<:L>LMN=R>Q:FBG:MBHG
Ho^kob^p
1he examination is based upon a case study that is set within a
simu|ated business context re|ating to one or more ctiona|ised
organisations. However, the context described in the case materia|
is based on a rea| business or industry.
1he examination comprises a three hour assessment o
competence, comp|eted within a supervised examination
environment. lt provides an integrated test o sy||abus content that
is main|y inc|uded within the three strategic |eve| papers L3, l3
and l3. However, it wi|| a|so draw upon content covered within
the Management and operationa| |eve| papers. 1he Case Study
Lxamination thereore has no specic sy||abus content o its own.
1he Case Study Lxamination primari|y invo|ves the app|ication
o strategic management accounting techniques to ana|yse,
recommend and support decisions. Students wi|| be required to dea|
with materia| in a |ess structured situation than those encountered
in previous strategic |eve| papers, and to integrate a variety o s|i||s
to arrive at a recommended so|ution. lt is un|i|e|y that there wi||
be a sing|e right answer to such a comp|ex business prob|em, and
students wi|| be expected to recognise the possib|e a|ternatives in
dea|ing with a prob|em.
1he emphasis wi|| be on assessing the student's capabi|ities and
competence in the app|ication o appropriate, re|evant |now|edge,
the abi|ity to demonstrate the higher |eve| s|i||s o synthesis,
ana|ysis and eva|uation, and s|i|| in eective|y presenting and
communicating inormation to users.
:ll^llf^gmZbfl
1he purpose o the Case Study Lxamination is to test the
capabi|ities and competence o students, to ensure that they.
have a sound technica| |now|edge o the specic sub|ects
within the curricu|um,
can app|y technica| |now|edge in an ana|ytica| and
practica| manner,
can extract, rom various sub|ects, the |now|edge required
to so|ve many-sided or comp|ex prob|ems,
can so|ve a particu|ar prob|em by distinguishing the re|evant
inormation rom the irre|evant, in a given body o data,
can, in mu|ti-prob|em situations, identiy the prob|ems and
prioritise them in the order in which they need to be addressed,
appreciate that there can be a|ternative so|utions and
understand the ro|e o |udgement in dea|ing with them,
can integrate diverse areas o |now|edge and s|i||s,
can communicate eective|y with users, inc|uding ormu|ating
rea|istic recommendations in a concise and |ogica| ashion,
can identiy, advise on and/or reso|ve ethica| di|emmas.
72
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1here wi|| be a written examination paper o three hours, p|us 20
minutes o pre-examination question paper reading time. 1he paper
wi|| have a |imited number o questions (requirements). 1hey wi||
norma||y be answered using a report and/or presentation, with
urther supporting documents, to a variety o users. 1he questions
wi|| be based upon.
(a) a case study (pre-seen materia|), which wi|| be pub|ished on the
ClMA website at |east six wee|s in advance o the examination.
1his wi|| provide an opportunity, beore the examination, to
underta|e preparatory ana|ysis based upon the pre-seen materia|.
1he vo|ume o preseen materia| is |i|e|y to be between 10
and 20 sides o A4 paper,
(b) urther inormation regarding the case (unseen materia|),
which wi|| be added as part o the examination paper. 1his wi||
a||ow urther deve|opments to be exp|ained and additiona|
issues to be raised. 1he vo|ume o unseen materia| is |i|e|y to
be between three and six sides o A4 paper,
Questions wi|| test the student's capabi|ities and competence
in the app|ication o appropriate |now|edge, and the processes
underta|en in dea|ing with the prob|ems identied in the
examination, together with the abi|ity to present and communicate
inormation in a variety o ormats. A 'Case Study Assessment
Matrix' wi|| be pub|ished on the ClMA website, with the pre-seen
case materia|. 1he matrix wi|| identiy the assessment criteria and
scoring system to be used when assessing the capabi|ities and
competence o candidates.
1o successu||y pass lart o the 1est o lroessiona| Competence
in Management Accounting - Case Study Lxamination, students
must score a minimum o 25 credits (out o a possib|e maximum o
50 credits).
73
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Students wi|| be required to go through the o||owing stages
to prepare or, and to answer, the requirements o the Case
Study Lxamination.
A lreparatory to the exam.
ana|yse the context within which the case is set,
ana|yse the current position o the organisation,
identiy and ana|yse the issues acing the organisation.
Note. 1hese activities wi|| be underta|en using the pub|ished
pre-seen case study materia|.
Luring the exam.
ana|yse the current position o the organisation,
identiy, ana|yse and prioritise the issues acing the organisation,
identiy, eva|uate and discuss possib|e easib|e
options/courses o action avai|ab|e,
recommend a course o action,
prepare and present inormation in a ormat and to a standard
suitab|e or presentation to senior management.
Note. 1hese activities wi|| be underta|en using the pre-seen
and unseen case study materia|s.
74
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Mn^l]Zr P^]g^l]Zr Mankl]Zr
Fhkgbg`l^llbhg
9.10am to 12.30pm I:I>K>*
Lnterprise Operations
I:I>K>,
Lnterprise Strategy
I:I>KI*
lerormance Operations
I:I>KI,
lerormance Strategy
I:I>K?*
linancia| Operations
I:I>K?,
linancia| Strategy
:_m^kghhgl^llbhg
1.40pm to 5pm I:I>K>+
Lnterprise Management
I:I>KI+
lerormance Management
I:I>K?+
linancia| Management
I:I>KM-I:KM;
1est o lroessiona|
Competence in Management
Accounting lart
Case Study Lxamination
75
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76
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MkZglbmbhg_khfma^fZgZ`^kbZeeôêh_ma^+)).jnZeb\Zmbhg
kegistered ClMA students who have passed examinations (or been awarded exemptions rom examinations) at the
manageria| |eve| o the ClMA 2005 sy||abus, beore the end o January 2010, wi|| be given credits or sub|ects at
the operationa| and management |eve| in the ClMA 2010 sy||abus, as shown in the o||owing tab|e.
)1Ma^mkZglbmbhgZkkZg`^f^gml_hklmn]^gml
+)).LREE:;NL +)*)LREE:;NL
FZgZ`^kbZeeôê Hi^kZmbhgZeeôê
IZi^kI* Management Accounting
lerormance Lva|uation
IZi^kI* lerormance Operations
IZi^kI- Organisationa| Management
and lnormation Systems
IZi^k>* Lnterprise Operations
IZi^kI0 linancia| Accounting and
1ax lrincip|es
IZi^k?* linancia| Operations
FZgZ`^f^gmeôê
IZi^kI+ Management Accounting
Lecision Management
IZi^kI+ lerormance Management
IZi^kI. lntegrated Management IZi^k>+ Lnterprise Management
IZi^kI1 linancia| Ana|ysis IZi^k?+ linancia| Management
77
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MkZglbmbhg_khfma^lmkZm^`b\eôêh_ma^+)).jnZeb\Zmbhg
kegistered ClMA students who have passed examinations (or been awarded exemptions rom examinations) at the
strategic |eve| o the ClMA 2005 sy||abus, beore the end o January 2010, wi|| be given credits or sub|ects at the
strategic |eve| in the ClMA 2010 sy||abus, as shown in the o||owing tab|e.
MkZglbmbhg_khfMHI<BF:h_ma^+)).jnZeb\Zmbhg
kegistered ClMA students who have passed the 1est o lroessiona| Competence in Management Accounting
(1OlClMA) examination in the ClMA 2005 sy||abus, beore the end o January 2010, wi|| be given a credit as
shown in the o||owing tab|e.
LmkZm^`b\eôê LmkZm^`b\eôê
IZi^kI, Management Accounting
kis| and Contro| Strategy
IZi^kI, lerormance Strategy
IZi^kI/ Management Accounting
usiness Strategy
IZi^k>, Lnterprise Strategy
IZi^kI2 Management Accounting
linancia| Strategy
IZi^k?, linancia| Strategy
Ikh_^llbhgZe\hfi^m^g\êôê Ikh_^llbhgZe\hfi^m^g\êôê
IZi^kI*) 1est o lroessiona| Competence
in Management Accounting
(1OlClMA)
IZi^kM- lart <Zl^Lmn]r
>qZfbgZmbhgHGER 1est o
lroessiona| Competence in
Management Accounting
78
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ClMA is a member o the lnternationa| lederation o Accountants
(llAC) and supports the princip|es, standards and guide|ines
set out within the 'llAC lnternationa| Lducation Standards or
lroessiona| Accountants'.
<BF:ik^&jnZeb\Zmbhg^]n\Zmbhgikh`kZff^l
Lesigners and de|iverers o ClMA tuition programmes are requested
to reer to the llAC lnternationa| Lducation Standards and reect the
contents when deve|oping |earning programmes or ClMA students.
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>]n\ZmbhgLmZg]Zk]l
<BF:BgbmbZeIkh_^llbhgZe=ôêhif^gmPhkd;Zl^]
IkZ\mb\Ze>qi^kb^g\^
1hose responsib|e or managing, supervising and mentoring
ClMA students as they acquire re|evant practica| experience,
are requested to reer to the llAC lnternationa| Lducation
Standards and reect the contents when deve|oping wor|
based experience programmes.
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Cert no. TT-COC-002370
. 8>B6^hegdjYidWZV<daYHedchdg / ).*)
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