Welcome to

ACCA’s Practice to Pass Session

For September 2020

(Day 5)

WhatsApp +971 555 245 672

 Today’s Plan
• Exam Technique:
o Should We Answer Questions In Sequence?

• Topics:

o Ratio Analysis / Budgets / MIS SBL Specimen # 3: NEHBY Q4A

o Technical Articles Blockchain Technology

Crypto Currencies

o Pitfalls of CBE Software -

o Recap of Important Things Exam techniques, Professional

marks, Formats

o List of important topics & models -

o List of Practice Questions -

o Study Approach From Now Onwards -

• Format:
o Presentation slide
 Technique# 5:
Should We Answer Questions In Sequence?
Should We Answer Questions in Sequence:

Follow sequence in first THREE hours

BUT IN THE LAST HOUR

Decide The Sequence
• See which questions are still pending (topic & marks)
• Start that question which is more easy / high scoring
• Change sequence if required (no negative marking)

In the end whichever Question was unfinished was actually the question
which you didn’t knew how to answer (smart thinking) !!!
 Financial Ratios
Calculate Following Ratios presentin Exams:
P&L Ratios
▪ Sales trend
▪ Gross profit margin %
▪ Net profit margin %
▪ ROCE
No need to show
calculations
Balance Sheet Ratios
▪ Current asset ratio
▪ Gearing
▪ Interest cover (optional)

Efficiency Ratio
▪ Revenue per employee

One Para on P&L Commentary

One Para on B/S Commentary

 Budgets / MIS
1- Master Budget
▪ Master budget is the “Budgeted” P&L, B/S and Cash Flow statement of the organization
▪ First Sales Budget is prepared
▪ Then other departments make their budget based on Sales Budget
▪ Then overall P&L, B/S and cash flow budget is prepared.

2- Flexed Budget
▪ You CANNOT compare Actuals numbers directly with Budgeted numbers because actual volumes are normally
different than budgeted volumes
▪ Whenever Actual numbers are given, you first calculate FLEXED budget and then you compare with Actuals

3- Comparison of Actuals
▪ Whenever Actual numbers are given, you compare it with TWO things :
1. Actual vs FLEXED budget
2. Actual vs Last Year
 Topics:
Budget / MIS

SBL Specimen Paper # 3: Nehby

Q4A
(Read Financial & Management Accounting Information Exhibit only)
 Presentation Slide Format

Slide 1:
HR Issues
▪ High turnover
▪ Low staff morale
▪ Salaries not aligned with market

Speaker notes:
{Explain above 3 bullets in 3 respective paragraph of 3-4 lines each}
Technical Articles
 Blockchain Technology
Lets Watch a Simple Video First
(What is BLOCKCHAIN? The best explanation of blockchain technology)
https://www.youtube.com/watch?v=3xGLc-zz9cA

Traditional Systems
Traditional Systems and Software have drawbacks:
• All information is stored in a “centralized” database
• Data can be manipulated or edited by unauthorized persons (e.g. security breach or hacking)

Blockchain Technology
Blockchain technology is a “distributed” (de-centralized) ledger which is stored on multiple computers at the
same time.

In simple words, it stores data in small chunks (blocks) across thousands of computers. The blocks are
uneditable and all new record is added as a fresh block to the chain.

Usage
Financial transactions / Cryptocurrencies (next topic), Land Titles, Medical Records, Supply chain, etc.
Advantages
• Data cannot be tampered with (i.e. data becomes more reliable)
• No need for intermediaries / middleman (e.g. banks)
• Less dispute as all blocks (data)are created after consent of both parties
• Saves considerable time and money (lower IT cost, no intermediaries / middleman)
• Transparency of all transactions

Disadvantages / Risks
• Technology is still developing
• Governance issues
• Legal status is not clear
• Counter party needs to be on blockchain technology for us to do a transaction

How Tested in SBL Paper?

An organization may consider implementing blockchain technology to record its transactions. You may be
asked to recommend with justifications whether Blockchain Technology is appropriate or not.

Hence you should be aware of the pros and cons of blockchain technology
 Crypto Currencies
Traditional Currency
• Exists physically (notes / coins)
• Controlled by a Central Authority e.g. Central Bank
• All records are kept centralized (with Central Bank)

Crypto Currency
• Does not exist physically (only online / digital)
• It is not controlled by any Central Authority (unregulated)
• All transactions are stored in ‘distributed ledgers’ spread across thousands of computers
• Once a transaction is authorized, each and every computer in the network is updated (blockchain tech)
• To edit / hack the data, each and every computer in the network needs to be edited / hacked, which is
near to impossible

Advantages of Crypto Currency

• Direct transaction between two parties (avoidance of a bank / intermediary)
• Faster
• Lesser transaction cost
• Reduces currency risks
• Can be used for investment purposes (I.e. buy cheaper and sell at a higher rate)
Disadvantages / Risks
• None or low regulatory environment
• Lack of central authority
• Investor can lose their funds if their password is lost
• Due to anonymity, it increases the chances of tax evasion, money laundering and illegal transactions
• The exchange rates varies based on demand and supply

Initial Coin Offerings (ICO)

• Just like IPOs, crypto currencies can be used to raise finances
• ICOs are normally used by technological firms (e.g. Bitcoin has used ICO)
• Supporters gets tokens in the new currency, which will become valuable if it becomes successful
• PROS of ICO:
o Easier (as there is no regulatory process)
o Cheaper (as there is no intermediaries)
o Faster (as compared to conventional sources of finances)
o Global investor base
• CONS of ICO:
o No regulations / governance
o High risk from point of view of investors
o Possible scams
 Pitfalls of CBE Software

Be Mentally Prepared for Possible Hiccups on the CBE exam day:

▪ Your ID may be rejected by the automatic facial recognition software

▪ Your system check may show a red cross (internet speed or microphone or webcam)

▪ Copy Paste function from the MOUSE may not work sometime….use ‘CTRL C’ for copy and ‘CTRL
V’ for paste

▪ During exam the software can hang or some feature might not work for e.g. highlighter may not
work…..please press refresh and it will resume

▪ The actual CBE Exam Software is slightly different from the CBE Practice Platform used by us for
practice:
1. Tool bar varies:
‘Move’ tool' and ‘Text’ tool added in Live Exam Software

2. The way to select text varies:

In Practice Platform, you can select text from Exhibits directly using your mouse. In the Live Exam
Software, you need to switch from ‘Move Tool’ to ‘Text Tool’ in order select text

3. Copy Pasting Into Excel Spreadsheet

In Practice Platform, you can directly paste text into Excel Spreadsheet. In the Live Exam Software,
you need double click the Cell and then you can paste text.

You can Download the details of differences from the below link:

https://www.accaglobal.com/content/dam/ACCA_Global/Students/prof/Practice-tests-func-
difference-1.pdf
 Recap: Key Exam Techniques
Linking with Exhibit Number of Points
- Normal question:
- Make a List of Requirement
(CBE: on online word processor) TOTAL marks Divide by TWO

(Manual paper: Last page of your answer sheet)

- Weakness / Recom question OR Risk /
- Read one para Recom question
TOTAL marks Divide by THREE
- STOP
- Maximum Length of Answer
- Do referencing
(for Manual Paper students)
TOTAL marks multiply by THREE
(excluding format lines, heading lines
and blank lines)
 Time Management Format of Your Answer
Reading (60 min) - Linking your answer with Exhibit is a MUST
- Skip 1 to 1 exhibits for later - Paragraph style of drafting (i.e. don’t use
- STOP reading after 60 min bullet style)
- One para = one point
Drafting (60 min)
- Leave one line between each para
- 1 mark = 1.8 min
- Look for stress words (e.g. very, significantly,
extremely, etc.)
MOVE to next question when allocated time
is up - Use tabular format for weakness and
recommendation type questions
- Use of models is not mandatory
- When you give recommendation, then
mention justification
 Should We Follow Sequence
Follow sequence in first THREE hours

BUT IN THE LAST HOUR

Decide The Sequence

- See which questions are still pending
(topic & marks)

- Start that question which is more

easy / high scoring

- Change sequence if required (no

negative marking)
 Recap: Professional Marks
Evaluation Skill Analysis Skill
- Include both Pros and Cons - Investigate reasons for variances from the Exhibits

- If financial spreadsheet given, then analyze the

numbers in detail linking with the case

Communication Comm Accumen Scepticism

- Give required format
- Keep tone of your answer
keeping in mind the reader
- Don’t use financial / accounting
terminologies
- Use business words like market
share, competitive edge,
opportunities, threats, risks,
etc.
- Use negative tone in your
answer
- Use words like ‘I disagree’, ‘its
seems incorrect’, ‘its not clear’
or ‘should be further
investigated’
 Recap - Formats

Report format:

Report
To:
From:
Subject:
Date:

Introduction:
This report {copy from question}
 Briefing Note / Memo Format:

Briefing Note / Memo

FAO:
From:
Subject:
Date:

This briefing note (or Memo as the case may be) ………..
 Email Format:

Email

To:
From:
Subject:
Date:

This email ………..

 Presentation Slide Format:

Slide 1:
HR Issues

▪ High turnover
▪ Low staff morale
▪ Salaries not aligned with market

Supporting notes:
{Explain above 3 bullets in 3 respective paragraphs of 3-4 lines each}
 Letter Format:

Assistant Auditor
National Audit Authority
Beeland
DATE: dd-mm-yyyy

Chairman
Rail Co Trust Board
Beeland

Subject: Internal Controls and CEO Fiduciary Duties

Respected Chairman,

I have reviewed the effectiveness of the internal controls and below are my
findings and comments:
 Press Release / Web Release Format:

Press / Website Release

{Subject}
{From}
{Company Name}

For further information: Contact our Company’s public relation department

 Business Case Format:

Current Situation
XXX XXX XXX

Proposed Option
XXX XXX XXX

Benefits of Proposed Option

XXX XXX XXX
 Project Initiation Document:
Scope & Objective Implement online system to increase revenue and customer
satisfaction
Cost Benefit Analysis Costs:
Hardware, software, website development, maintenance,
licenses, etc.

Benefits:
Increase in revenue
Project Sponsor IT Director
Project Manager IT manager (or consultant)
Project Team Full time team / outsourced
Key Stakeholders ▪ Customers
▪ Board of Directors
Duration 12 months
Key Risks ▪ Quality risk
▪ Time overrun
▪ Cost overrun
Constraint ▪ Human resource / expertise
▪ Funding / finance
Project governance / monitoring Board of Directors / monthly
Weakness and Recommendation:

Weakness Recommendation

Risk and Mitigation Factors:

Risks Mitigation Factors

 List of Important Topics
(For Last Moment Revision)
MODELS TOPICS
1 PESTEL / Porter 5 Forces / Strategic Position 1 Financial ratios / projections
2 SFA Framework 2 Budgets / MIS
3 Corporate Parenting / BCG 3 Project Management / PID
4 SWOT / TOWS 4 CSF / KPIs
5 Ansoff Growth matrix 5 E - Business / E - Marketing
6 Harmon Process matrix 6 IT / Cyber risks and security
7 Mendelow Stakeholder matrix 7 Big data / CRM
8 Cultural Web 8 Blockchain / Cryptocurrencies
9 Context of Change / Types of Change 9 Professional / Ethical Code of Conduct & Public interest
10 Risk Mgt Strategies (TARA Model) 10 Board Composition / NEDs / Committees / Family Owned
11 Integrated Reporting / 6 Capital
12 Social & Environmental Footprints
13 Risk management and recoms
14 Control weakness & recoms
15 Internal Audit
 List of Practice Questions
P3 (If you have time)

Attempt Name Topics Covered

1 Jun 11 - Q1 Eco Car • PESTEL
• Porter 5 Forces
• Outsourcing / relevant costing
• Budget, succession planning, risk mgt
2 Dec 11 - Q1 Rudos Rail • Strategic position
• SFA framework
• CSF / KPI
3 Jun 14 - Q1 Re Ink Co • SWOT & TOWS
• Contextual Features of Change
4 Dec 14 - Q1 Roam Group • Corporate portfolio
• SFA framework
• Cost leadership vs differentiation
 P1 (If you have time)

Attempt Name Topics Covered

1 Jun 2015 – Q1 Lysus Surgical • Family owned business (differences)
• Professional code of ethics (violating)
• Public interest (acted against)
• Why risk vary by sector
• Benefits of non-executive chairman
• How risk mgt embed in company culture
2 Sep / Dec 2017 - National Football • Board committees
Q1 Association
• Bribery & corruption
• Internal control system (purpose & recom)
• Corporate code of ethics
 SBL Papers (Mandatory)

Attempt Name

1 Specimen Paper 2 Rail Co

2 Specimen Paper 3 Nehby

3 Sep 2018 Cofold Construction

4 Dec 2018 Hilite Hotels

5 Mar 2020 TT4U

Attempt As Mock Under Strict Exam Conditions:

6 Mar/Jun 2019 Smart Wear Clothing

7 Sep/Dec 2019 Dulce Co

 What to Do in Last 3 Weeks
1. Watch Sep 2020 Webinar (for CBE) OR Mar 2020 Webinar (for manual paper)

2. Revise 10 models and 15 topics (list provided above)

3. Do 7 case studies from P1 & P3 Papers to build basic concepts (If you have time)

4. Do 5 SBL Questions in WRITING with TIME MANAGEMENT (list provided above)

5. DO TWO MOCKS UNDER STRICT EXAM CONDITIONS

1. Mar / Jun 2019: Swart Wear Clothing
2. Sep / Dec 2019: Dulce Co

6. OPTIONAL:
You can join my Mock Based Practice Session for Sep 2020 (private session)
 STAY AWAY FROM:
- Books (too lengthy / too late)
- Revision Kits (too lengthy / too late)
- Models (other than 10 mentioned above)
- Technical Articles (already covered)
 Q&A

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+971555245672