Institute of Financial Accountants. Professional Financial Accountant Syllabi for exams up to and including June 2012

Transcription

1 Institute f Financial Accuntants The IFA prvides fr delivery and assessments f its regulated qualificatins in English nly at this time. If the IFA determines that there is demand fr its regulated qualificatins t be delivered in languages ther than English, then the IFA will review the feasibility at that time. Prfessinal Financial Accuntant Syllabi fr exams up t and including June 2012 [Updated mdules will be examined frm December 2012 and a new syllabus will be published fr these.] Qualificatin structure - six mdules t cmplete: P1. Financial Accunting and IFRS fr Small & Medium Size Enterprises (SMEs) P2. Financial Management P3. Management and Cntrl Systems P4. Prfessinal Skills fr SMEs P5. Business and Regulatry Envirnment P6. The Ethical Prfessinal nt included in this pack Purpse and target market The Financial Accuntant Prfessinal qualificatin develps and tests a wide range f accuntancy and finance skills fr thse wh manage r seek t manage the day t day finances and financial needs f an SME. It develps understanding and awareness f technlgy, systems, legal and regulatry issues, business peratins and management; imprving skills and develping strategic awareness. The Qualificatin als prmtes psitive attitudes and ethical behaviur. Having passed the Prfessinal FA Qualificatin yu will be entitled t becme an Assciate IFA member, use the AFA designatin and describe yurself as a Financial Accuntant. Level and access Access t the Financial Accuntant Prfessinal is pen t thse wh pssess the FA Diplma. Otherwise entrants shuld ideally have: a related degree r HND qualificatin, r equivalent level 4 qualificatin at least tw years wrkplace experience in finance r accunting rle.

2 In the interests f pen access if entrants d nt pssess any f these qualificatins they will be expected t sit and pass the Prfessinal Challenge Mdule first, which is P1 Financial Accunting and IFRS. The Prfessinal FA Qualificatin syllabus specificatins are based upn UK Regulatry arrangements fr the Qualificatin and Credit Framewrk (QCA/Ofqual, August 2008) guidance. Students pursuing the Prfessinal FA Qualificatin are tested at Level 5.

3 Learning cmmitment All mdules require the fllwing apprximate minimum learning cmmitment: At least 72 hurs f dedicated learning time An additinal minimum f 48 hurs ther set r directed wrk, such as hmewrk, practise questins, grup wrk, etc At least 20 hurs revisin which may be supprted by a study prvider but therwise persnal time Suggested ttal learning time per mdule: 140 hurs.

4 Prfessinal Financial Accuntant Syllabus P1. Financial Accunting and Internatinal Financial Reprting Standards (IFRS) fr Small & Medium Size Enterprises (SMEs) Mdule Aim The aim f this mdule is t understand the cnceptual and regulatry framewrk fr accunting fr Small and Medium-Sized Enterprises (SMEs). The cncepts and pervasive principles in the Internatinal Financial Reprting Standard (IFRS) fr SMEs will then be cnsidered. The mdule will cntinue by the cnsideratin f the IFRS fr SMEs bth in the preparatin f financial statements and their presentatin. The analysis and interpretatin f the business perfrmance frm the financial statements will fllw cncluding with the rle f external audit and the assciated audit reprts. Mdules learning utcmes Understand the cnceptual and regulatry framewrk fr financial reprting fr SMEs 7% Understand the psitin f Internatinal Accunting Standards Bard (IASB) and its standard setting prcess Understand wh are the users f financial statements and their differing requirements Understand the need fr an Internatinal Financial Reprting Standard fr Small and Medium-Sized Entities and what cnstitute Small and Medium- Sized Entities Understand cncepts and pervasive principles in the IFRS fr SMEs 8% Understand the bjectives f cmpiling financial statements fr SMEs Understand the qualities that make infrmatin cntained in the financial statements useful t SME stakehlders Be aware f the cncepts and basic principles underlying an SME s financial statements Understand the presentatin and cntent f financial statements fr SMEs 10% Statement f financial psitin Statement f cmprehensive incme and incme statement Statement f changes in equity and statement f incme and retained earnings Ntes t the accunts Statements f cash flws

5 Understand and apply the IFRs fr SME in the preparatin f financial statements identified abve 60% Review the preparatin f Statement f Cmprehensive Incme and Statement f Financial Psitin fr limited cmpanies Understand and apply the fllwing cmpnents f the Internatinal Standard when preparing an SME s financial statements Statement f cash flws Cnslidated and separate financial statements Accunting plicies, estimates and errrs Financial instruments Inventries Investments in Assciates Investments in Jint Ventures Investment prperty Prperty, plant and equipment Intangible assets ther than gdwill Business cmbinatins and gdwill Leases Prvisins and cntingencies Revenue Gvernment grants Brrwing csts Share-based payments Impairment f assets Emplyee benefits Incme tax Freign currency translatin Events after the end f the reprting perid Related party disclsures Analyse and interpret financial statements 10% Understand statutry audit requirements 5%

6 Mdule requirements Learning utcme 1. Understand the cnceptual and regulatry framewrk fr financial reprting fr SMEs Detailed breakdwn f learning utcmes 1.1 Understand what IFRS are and the prcess by which they are set 1.2 Understand the need fr an IFRS fr SMEs and understand the needs f users f thse financial statements. 2. Understand cncepts and pervasive principles in the IFRS fr SMEs 2.1 Understand the bjectives f financial statements fr SMEs 2.2 Understand the qualitative characteristics f infrmatin in financial statements Understandability Relevance Materiality Reliability Substance ver frm Prudence Cmpleteness Cmparability Timeliness Balance between benefit and cst 2.3 Understand the significance f an SME s financial psitin as presented in the statement f financial psitin 2.4 Understand the significance f an SME s perfrmance in its statement f cmprehensive incme 2.5 Understand hw assets, liabilities, incme and expenses are recgnised and measured based n pervasive recgnitin and measurement principles derived frm IASB Framewrk fr the Preparatin and Presentatin f Financial Statements Accruals basis Recgnitin in financial statements Initial recgnitin and subsequent measurement Offsetting. 3. Financial statement presentatin - the infrmatin that shuld be shwn and hw it shuld be presented in the fllwing: Statement f financial psitin 3.1 Understand what fair presentatin means 3.2 Understand that an entity cmplying with IFRS fr SME must state that it has cmplied with the standard

7 Statement f cmprehensive incme and incme statement Statement f changes in equity and statement f incme and retained earnings Statement f cash flws Ntes t the financial statements 3.3 Understand the requirements f the fllwing Ging cncern Frequency f reprting Cnsistency f presentatin Cmparative infrmatin Materiality and aggregatin 3.4 Understand the cntents f a cmplete set f financial statements and the identificatin f each f the financial statements 3.5 Understand the infrmatin t be presented in the statement f financial psitin and the infrmatin that can be presented either in the statement f financial psitin r in the ntes 3.6 Understand the difference between a current and nn-current asset 3.7 Understand the presentatin f the ttal cmprehensive incme using single-statement and the tw statement apprach 3.8 Understand that expenses can be analysed either by nature f expense r functin f expense 3.9 Understand the purpse f the statement f changes in equity and the infrmatin t be presented 3.10 Understand the purpse f the statement f incme and retained earnings and the infrmatin t be presented 3.11 Understand the infrmatin t be presented in the statement f cash flws perating activities, investing activities, financing activities 3.12 Understand that there are tw methds f reprting cash flws frm perating activities indirect and direct methds 3.13 Understand and apply the treatment and presentatin f freign currency cash flws, interest and dividends, incme tax and nn-cash transactins in a statement f cash flws 3.14 Understand the structure f the ntes and the infrmatin that shuld be disclsed therein. 4. Understand and apply IFRS fr SMEs in the preparatin f their financial statements 4.1 Revise the cntent f a statement f cmprehensive incme and statement f financial psitin t cmply with the relevant IFRS

8 4.2 Preparatin f statements f cash flw using direct and indirect methds; als interpretatin f these statements per sectin 7 f the IFRS fr SMEs 4.3 Preparatin f cnslidated and separate financial statements as per sectin 9 f the IFRS fr SMEs 4.4 Understand the use f accunting plicies, estimates and treatment f errrs as per sectin 10 f the IFRS fr SMEs 4.5 Understand and apply sectin 11 f IFRS fr SMEs when an SME has basic financial instruments (sectin 12 Other Financial Instruments Issues and Sectin 22, Liabilities and equity will nt be examined) 4.6 Understand and apply sectin 12 f IFRS fr SMEs fr recgnising and measuring inventries 4.7 Understand and apply sectin 14 f IFRS fr SMEs when an SME is required t accunt fr an investment in assciates. 4.8 Understand and apply sectin 15 f IFRS fr SMEs when an SME is required t accunt fr an investment in jint ventures. 4.9 Understand and apply sectin 16 f IFRS fr SMEs when an SME is required t accunt fr an investment that is defined as an investment prperty Understand and apply sectin 17 f IFRS fr SMEs when an SME accunts fr prperty, plant and equipment bth in its recgnitin and future measurement 4.11 Understand and apply sectin 18 f IFRS fr SMEs when an SME accunts fr intangible assets ther than gdwill 4.12 Understand and apply sectin 19 f IFRS fr SMEs when the SME carries a business cmbinatin and hw t treat gdwill Understand and apply sectin 20 f IFRS fr SMEs when an SME is required t accunt fr leases 4.14 Understand and apply sectin 21 f IFRS fr SMEs when an SME has prvisins and cntingencies 4.15 Understand and apply sectin 23 f IFRS fr SMEs when an SME accunts fr its revenue

9 4.16 Understand and apply sectin 24 f IFRS fr SMEs when an SME receives Gvernment grants 4.17 Understand and apply sectin 25 f IFRS fr SMEs when an SME is required t accunt fr brrwing csts 4.18 Obtain an understanding f share-based payments and emplyee benefits as cntained in sectin 26 and 28 f the IFRS fr SMEs 4.19 Understand and apply sectin 14 f IFRS fr SMEs when an SME needs t impair an asset 4.20 Understand and apply sectin 29 f IFRS fr SMEs t accunt fr incme tax payable by an SME 4.21 Understand and apply sectin 30 f IFRS fr SMEs when an SME is required t accunt fr freign currency. Sectin 31 accunting fr hyperinflatin will nt be examined Understand and apply sectin 32 f IFRS fr SMEs when an SME accunts fr events ccurring after the end f the reprting perid Understand and apply sectin 33 f IFRS fr SMEs fr an SME which needs t cnsider related party disclsures. 5. Analyse and evaluate financial statements 5.1 Calculatin f a range f ratis ver time, between different businesses and against bench marks 5.2 Be able t cmmunicate the limitatins f rati analysis when writing a reprt t users 5.3 Cmmunicate findings and cnclusins in a prfessinal written manner. 6. Understand audit requirements fr SMEs 6.1 Understand what an external audit invlves and understand Internatinal Auditing and Assurance Standards 6.32Understand the audit threshlds relating t an SME 6.4 Understand the apprpriate audit reprt fr an SME. Study weightings Against each learning utcme a percentage weighting is shwn as a guide.

10 Instructins t candidates Time allwed 3 hurs 10 minutes which includes 10 minutes reading time Use f a silent nn-prgrammable calculatr, which is NOT part f a mbile phne r any ther device capable f cmmunicatin, is allwed. This is a clsed bk examinatin. The pass mark is 50%. The examinatin paper will cnsist f Sectin A three cmpulsry questins, each wrth 10 marks 30 Sectin B tw cmpulsry questins, each wrth 20 marks 40 Sectin C ne cmpulsry questin, wrth 30 marks 30 Ttal 100 Bklist Recmmended: BPP Study Guide IFA Financial Accunting Others: At present there are n ther textbks dealing with IFRS fr SMEs Useful websites Internatinal Accunting Standards Bard Delitte PWC

11 Prfessinal Financial Accuntant Qualificatin P2. Financial Management Mdule aim The aim f this mdule - is t develp the knwledge and skills expected f a financial manager, wrking fr small and medium size (SMEs) rganisatins, t be able t identify and evaluate alternative surces f lng-term finance, apply advance investment appraisal techniques t capital prjects fr decisin-making, managing freign currency risks and t be able t build n Wrking capital, treasury financing and cash management in the Finance Management mdule and investment appraisal in the Management & Finance Systems mdule. Certain items are included that appear nt immediately relevant t r used by SMEs such as mdels relating t cst f capital, they are hwever included fr thse SMEs wh may use certain mdels withut being listed. Items are als included t allw fr understanding and career prgressin int larger businesses. Mdule learning utcmes Financial planning 20% Assess the alternative lng-term surces f finance available t an rganisatin and their impact n the financial structure f an rganisatin. Capital prjects-cst f capital and investment appraisal (advance) 20% Apply and evaluate investment appraisal techniques t capital prjects fr stakehlders and management in making investment decisins. Capital re-rganisatin/structure impact n cst f capital and financial ratis 20% Assess the relatinship between a business rganisatin s value and cst f capital. Managing financial risk 20% Describe and evaluate the different types f freign currency risks: translatin risk, ecnmic risk and transactin risk.

12 Wrking capital, treasury financing and cash management (advance) 20% Discuss and apply advance wrking capital management techniques t enable management t perate efficiently the wrking capital functin f an rganisatin. Mdule requirements Learning utcme Detailed breakdwn f learning utcmes 1. Financial planning 1.1 Discuss and suggest apprpriate methds f raising equity finance fr a small r medium size business in a scenari 1.2 Critically evaluate the use and management f debt finance, equity, retained earnings and venture capital. 2. Capital prjects-cst f capital and Investment appraisal (advance) 2.1 Discuss the effectiveness f a capital budgeting system in an rganisatin 2.2 Identify and calculate relevant cash flws using a scenari 2.3 Apply and interpret the utcme f capital prjects using advanced investment appraisal techniques in a scenari. 3. Capital re-rganisatin/structure impact n cst f capital and financial ratis 3.1 Analyse and interpret financial ratis affecting sharehlders and lng-term creditrs: gearing, interest cver, interest yield, dividend cver, dividend per share, dividend yield, earnings per share and price earnings ratis 3.2 Assess an rganisatin s financial psitin and financial risk using leverage in a scenari

13 3.3 Assess the impact f lng-term surces f finance n the financial psitin and financial risk f an rganisatin by cnsidering the effect n sharehlders wealth 3.4 Critically discuss the use f the dividend grwth mdel (DVM) and its applicatin t the share price and cst f equity 3.5 Identify and discuss the assumptins underlying the capital asset pricing mdel (CAPM) and its effect n the cst f equity fr listed cmpanies 3.6 Identify and discuss the assumptins underlying the weighted average cst f capital (WACC) and its effect n the cst f capital f listed/quted cmpanies. 4. Managing financial risk 4.1 Discuss the causes f the fllwing risks: translatin, transactin and ecnmic 4.2 Define and use frward rate and spt rate in a scenari 4.3 Advise n financial risks. 5. Wrking capital, treasury financing and cash management (advance) 5.1 Identify and calculate the ratis fr the cmpnents f the cash perating cycle fr manufacturing and the service industries 5.2 Explain the factrs that may affect the efficiency f wrking capital 5.3 Explain the financial impact fr an rganisatin ffering discunts t custmers 5.4 Discuss the effectiveness f factring and ther instruments in an SME.

14 Study weightings Within each mdule, a percentage weighting is shwn against each learning utcme as a guide. Instructins t candidates Time allwed 3 hurs 10 minutes which includes 10 minutes reading time Use f a silent nn-prgrammable calculatr, which is NOT part f a mbile phne r any ther device capable f cmmunicatin, is allwed. This is a clsed bk examinatin. The pass mark is 50% The examinatin paper will cnsist f five questins, each wrth 25 marks, FOUR questins must be answered. Bklist Recmmended: BPP Study Guide IFA Financial Management Others Brammer, J., Penning, A. (2007), Managing Perfrmance & Resurces, Osbrne Bks, ISBN Drury, C. (2000), Management & Cst Accunting, Thmsn, 5 th Editin ISBN Fardn, F., Penning, A. (2007), Cash Management & Credit Cntrl, Osbrne Bks, ISBN

15 Prfessinal Financial Accuntant Syllabus P3. Management and Cntrl Systems Mdule aim The aim f this mdule is t imprve the management f the finance functin, t develp the knwledge and skills expected f a financial accuntant, wrking fr small and medium size entities (SMEs), t be able t prvide a specialist service and relevant infrmatin fr management decisin-making. Als t be able t build n ther areas such as business perfrmance and targets in the Management & Finance Systems mdule, budgeting in the Finance Management mdule, and prvide infrmatin n cst variances and identify what determines effective cntrls. Mdule learning utcmes Business perfrmance and targets 20% Critically evaluate the measures f perfrmance f an rganisatin against its strategic targets t infrm management f future imprvements. Budgeting (advance) 20% Prepare sensitivity analysis and flexible budgets fr the whle rganisatin r fr functinal departments in an apprpriate frmat fr managers. Standard csting and Variance reprting 20% Identify and analyse the main causes f cst variances and reprt t management in an apprpriate manner. Financial systems and cntrls 20% Identify and assess the varius financial cntrls essential t an rganisatin s cntinual success. Audit techniques and their impact internal audit functin 20% Discuss the nature and purpse f systems and the impact f internal cntrls. Describe the methds use t reprt weaknesses internal cntrls and recmmendatins t management.

16 Mdule requirements Learning utcme Detailed breakdwn f learning utcmes 1. Business perfrmance and targets 1.1 Cmpare business targets with actual perfrmance t drive cntinuus imprvement in the prvisin f prducts and services 1.2 Discuss and assess cntinuus quality imprvement using Ttal Quality Management (TQM) 1.3 Discuss and assess cst reductin using value engineering, value analysis, target csting and life cycle csting 1.4 Describe the factrs influencing frecast data plitical, ecnmic, scial and technlgy (PEST). 2. Budgeting 2.1 Prepare sensitivity analysis and flexible budgets fr the whle rganisatin r fr functinal departments in an apprpriate frmat using Incremental budgeting, Activity Based Budgeting, Flexed budgets and Sensitivity analysis in budgets 2.2 Cmpare and mnitr budgets frecasts with actual and reprt t management by exceptin. 3. Standard csting and variance reprting 3.1 Cmpare budgeting and standard csting. 3.2 Identify the main elements f csts in standard csting 3.3 Identify the surces f infrmatin needed fr standard setting fr material, labur and sales 3.4 Identify standards use t measure perfrmance in service industries

17 3.5 Prepare a basic standard cst fr a unit frm relevant data 3.6 Identify and reprt t management the main causes f variances. 4. Financial systems and cntrls 4.1 Understand financial cntrls and apply them t given scenaris 4.3 Describe the relatinship between management infrmatin systems (MIS) and financial cntrls. 5. Audit techniques and their impact internal audit functin 5.1 Critically discuss the impact f a cntrl envirnment and its activities n the effective functining f an rganisatin 5.2 Discuss and evaluate the purpse and limitatins f the internal audit functin in its management and reprt f internal cntrls 5.3 Evaluate systems fr the detectin and preventin f fraud. Study weightings Against each learning utcme a percentage weighting is shwn as a guide. Instructins t candidates Time allwed 3 hurs 10 minutes which includes 10 minutes reading time Use f a silent nn-prgrammable calculatr, which is NOT part f a mbile phne r any ther device capable f cmmunicatin, is allwed. This is a clsed bk examinatin. The pass mark is 50% The examinatin paper will cnsist f five questins, each wrth 25 marks, FOUR questins must be answered.

18 Bklist Recmmended: BPP Study Guide IFA Management and Cntrl Systems Others Brammer, J., Penning, A. (2007), Managing Perfrmance & Resurces, Osbrne Bks, ISBN Drury, C. (2000), Management & Cst Accunting, Thmsn, 5 th Editin ISBN Fardn, F., Penning, A. (2007), Cash Management & Credit Cntrl, Osbrne Bks, ISBN Taylr, J., Osbrne, J. (2008), Implementing Auditing Prcedures, Osbrne Bks, ISBN

19 Prfessinal Financial Accuntant Syllabus P4. Prfessinal Skills fr SMEs Mdule aim The aim f the mdule is t equip candidates with a range f prfessinal skills and knwledge beynd that traditinally expected f a Financial Accuntant. This is in respnse t the reality f wrking in a Small r Medium Enterprise (SME) where senir prfessinals are required t demnstrate versatility and cntribute in areas beynd a fcused accuntancy remit. In such circumstances depth f knwledge is nt required neither is it expected in the cntext f this mdule. Instead a brad grasp f key principles acrss six prfessinal knwledge areas is cvered: - Managing peple - Prject management - Infrmatin systems - Business strategy and planning - Operatins management - Sales and marketing Successful candidates shuld therefre be able t cmplement all the cre skills and knwledge f the accuntancy prfessin with an understanding f all the main business disciplines that wrk clsely tgether with accuntancy and finance t drive SME success. A distinctive practical fcus will be maintained thrughut the mdule. Where academic thery is cvered, it shuld immediately be evaluated and applied in the cntext f SME case studies, and this apprach will be reinfrced in the examinatin. Mdule learning utcmes Evaluate ways t maximise the cntributin f emplyees within an SME business envirnment. 17% Apply prject management principles t ensure the effective delivery f business prjects within the SME sectr 17% Identify pprtunities fr the explitatin f mdern infrmatin systems in SMEs. 17% Analyse SME business strategy and planning t fcus n lng term success. 17%

20 Enhance the perfrmance f SME peratins, apply cncepts f quality and manage relatinships with key suppliers. 17% Evaluate the sales and marketing prcesses f an SME and develp tactics t increase revenue. 15% Mdule requirements Learning utcme 1. Evaluate ways t maximise the cntributin f emplyees within an SME business envirnment. Detailed breakdwn f learning utcmes 1.1 Evaluate the recruitment, selectin, inductin, training and develpment f staff plicies and practices f an SME 1.2 Appreciate key theries n human resurce management/staff mtivatin and hw they apply t an SME business envirnment 1.3 Develp a basic human resurce plan with emphasis n staff retentin, successin planning and supprting grwth. 2. Apply prject management principles t ensure the effective delivery f business prjects within the SME sectr 2.1 Master the basic tls and techniques that are applied in the prject management prcess, including: Prject definitin/initiatin Planning and time analysis Resurcing and budgeting Tracking and cntrl Reprting and cmpletin 2.2 Appreciate the imprtance f key stakehlders in a prject and the need t manage them in a prfessinal manner 2.3 Analyse ptins fr prject rganisatinal structures in an SME, including functinal, pure prject and matrix structures 2.4 Understand established teamwrk theries, including team develpment patterns, behaviurs and management in an SME envirnment.

21 3. Identify pprtunities fr the explitatin f mdern infrmatin systems in SMEs. 3.1 Identify key sftware systems that SMEs wuld find useful 3.2 Explit the ptential f the internet in SMEs t drive dwn cst, increase revenue and imprve infrmatin flws 3.3 Be able t analyse and articulate user needs t be cnsidered in establishing a new system and identify ptins fr prcuring new system applicatins (bespke, package and end-user develpment) 3.4 Assess system implementatin and changever methds including aspects f change management. 4. Analyse SME business strategy and planning t fcus n lng term success 4.1 Explain the general prcess f strategy frmulatin, and apply simple tls and techniques fr strategic analysis 4.2 Distinguish between different appraches t strategy (e.g. ratinal, adaptive, emergent) and be able t recmmend the ptimal apprach in a given SME scenari 4.3 Appreciate the relatinship between strategy and the rganisatinal structure f the business. 4.4 Evaluate cmpetitive situatins and pprtunities, and apply this knwledge t the SME sectr 4.5 Analyse the management f in-huse r utsurced vendr slutins, fr example fr IT, payrll r ther services. 5. Enhance the perfrmance f SME peratins, apply cncepts f quality and manage relatinships with key suppliers. 5.1 Assess the basic principles f peratins management in the cntext f an SME 5.2 Appraise analytical systems and prcesses applicable t SME peratins management 5.3 Cntrast appraches t quality assurance, quality management systems and basic statistical methds f quality cntrl. 5.4 Understand supply chain management,

22 lean principles and the cntributin t SME business perfrmance 5.5 Develp and maintain relatinships with suppliers, SME surcing strategies and inventry management systems 5.6 Appreciate the key skills necessary t negtiate and manage key cntracts effectively. 6. Evaluate the sales and marketing prcesses f an SME and recmmend tactics t increase revenues. 6.1 Understand basic marketing cncepts in the SME envirnment and business cntext (cnsumer marketing, business-t-business marketing etc.) 6.2 Manage the segmentatin and targeting f markets, the marketing mix and psitining f prducts within SME markets 6.3 Understand custmer behaviur, market research and pricing strategies 6.4 Assess ptins fr marketing cmmunicatins, advertising/prmtin and generating sales leads. Study weightings Against each learning utcme a percentage weighting is shwn as a guide. Instructins t candidates Time allwed: 3 hurs 10 minutes which includes 10 minutes reading time. This is a clsed bk examinatin The pass mark is 50% The examinatin paper will cnsist f: Sectin A: ten multiple chice questins, each wrth tw marks 20 marks Sectin B: six questins, ne frm each mdule tpic. Candidates will be required t answer any fur frm the six questins prvided. Each questin is wrth 20 marks and will be based n a mini-case t test candidates abilities t apply skills and knwledge t a particular SME scenari. 80 marks

23 Ttal 100 marks

24 Bklist Recmmended: BPP Study Guide IFA Prfessinal Skills fr SMEs Others Beaver, G (2002) Small Business and Enterprise Develpment, FT Prentice Hall Jnes, O and Tilley, F (2003) Cmpetitive Advantage in SME's: Organising fr Innvatin and Change, Jhn Wiley & Sns Levy, M and Pwell P (2004) Strategies fr Grwth in SMEs: The Rle f Infrmatin and Infrmatin Systems, Elsevier Butterwrth-Heinemann Maylr, H (2005) Prject Management, FT Prentice Hall Patten, D (2001) Successful Marketing fr the Small Business, Kgan Page Stkes, D (2006) Small Business Management and Entrepreneurship, Thmsn Learning Useful Websites

25 Prfessinal Financial Accuntant Qualificatin P5. Business and Regulatry Envirnment Mdule aim The aim f this mdule is t prvide learners wrking in the SME sectr with an understanding f the substantive rules f law which affect the cnduct f business, and t prvide them with rule-handling skills fr defined situatins. Mdule learning utcmes Understand cntract law and be able t analyse cmplex legal prblems and apply the relevant rules 30% Frmatin f a cntract Cntents f a cntract, including cmmn cmmercial clauses Misrepresentatin Terminatin f cntract Understand the rules relating t the statutry cntrl f trading transactins and be able t analyse and apply the rules t cmplex legal prblems 15% Cntracts fr the sale f gds Cntracts fr the supply f services Internet and ther distance selling Understand the regulatin f the emplyment relatinship, and be able t analyse cmplex legal prblems and apply the relevant rules 10% Theretical basis fr emplyment Express and implied rights and duties arising ut f the emplyment relatinship Terminatin f emplyment Understand the theretical and practical basis f the law f agency, and be able t analyse and apply the rules t cmplex legal prblems 10% Frmatin f the agency relatinship Rights and duties arising frm the relatinship Terminatin f agency

26 Understand the theretical and practical aspects f crprate law, and be able t analyse cmplex legal prblems and apply the rules t them 35% The different types f business rganisatin The cnstitutin f a cmpany The pwers and duties f directrs Cmpanies in financial difficulties The ethical and criminal framewrk regulating cmpanies Mdule requirements Learning utcme 1. Understand what a cntract is Detailed breakdwn f learning utcmes 1.1 Define a cntract 1.2 Explain the factrs required fr the frmatin f a cntract 1.3 Explain wh can enfrce a cntract (Privity f cntract and the Cntracts (Rights f Third Parties Act 1999), cllateral cntracts). 2. Understand the rules which establish the validity f ffer and acceptance 2.1 Define a binding ffer 2.2 Differentiate between an ffer and an invitatin t treat 2.3 Explain the rules regarding the cmmunicatin f ffers 2.4 Describe hw ffers cme t an end 2.5 Explain the rules regarding the cmmunicatin f revcatin f ffer. 2.6 Describe hw an ffer may be accepted 2.7 Explain the rules regarding the cmmunicatin f acceptances 2.8 Apply an understanding f the rules f ffer and acceptances t a given scenari. 3. Understand the cncept f cnsideratin in simple cntracts 4. Understand the rules which underpin an intentin t create legal relatins in a cntract 3.1 Explain the rules n valid cnsideratin (must be sufficient, must be mre than already bund t d, part-payment f debts) 3.2 Apply an understanding f the rules f cnsideratin t a given scenari. 4.1 Explain the meaning and use f ppsing rebuttable presumptins in discvering the parties' intentins 4.2 Explain the presumptin in scial and dmestic situatins and hw it may be rebutted

27 4.3 Explain the presumptin in cmmercial cntracts and hw it may be rebutted 4.4 Apply an understanding f the rules fr determining an intentin t create legal relatins t a given scenari. 5. Understand hw terms are incrprated int a cntract 5.1 Explain hw representatins differ frm terms 5.2 Explain the difference between express and implied terms 5.3 Explain hw express terms are incrprated int cntracts thrugh ntice 5.4 Explain hw terms may be implied by statute 5.4 Explain hw terms may be implied by the curts using the business efficacy test. 6. Understand the classificatin f terms f a cntract 6.1 Define a cnditin 6.2 Define a warranty 6.3 Define an inminate term 6.4 Apply an understanding f the classificatin f cnditins warranties and inminate terms t a scenari. 7. Understand the rules relating t cmmn clauses in business and ther cntracts 7.1 Identify exclusin and limitatin clauses 7.2 Explain the prvisins f the Unfair Cntract Terms Act Explain the prvisins f the Unfair Terms in Cnsumer Cntracts Regulatins 7.5 Apply the rules n exclusin and limitatin clauses t a given scenari 7.6 Identify and define a liquidated (r specific) damages clause 7.7 Identify and define a penalty clause 7.8 Apply the rules n these clauses t a given scenari.

28 8. Understand the incidents f statutry cntrl which affect the business cntract 8.1 Define a cntract fr the sale f gds 8.2 Explain the implied terms f s12 t 15 Sale f Gds Act 1979 (as amended) 8.3 Define a cntract fr services 8.4 Explain the implied terms f the Supply f Gds and Services Act Explain (in utline) the prvisins f the Cnsumer Prtectin (Distance Selling) Regulatins 8.6 Apply the varius statutry prvisins t a given scenari. 9. Understand misrepresentatin 9.1 Define misrepresentatin 9.2 Explain the different types f misrepresentatin 9.3 Explain the remedies fr misrepresentatins 9.4 Apply the rules t a given scenari. 10. Understand the ways in which a cntract can cme t an end and the available remedies fr breach 10.1 Explain hw a cntract may be discharged thrugh perfrmance, and the exceptins t the general rule 10.2 Explain hw a cntract may be discharged thrugh frustratin 10.3 Explain the Law Refrm Act (1945) and the effect it has fr the cnsequences f frustratin 10.4 Apply the rules n the discharge f cntract t a given scenari 10.5 List the remedies available fr breach f cntract (Damages, specific perfrmance, injunctin) 10.6 Explain the purpse f mnetary damages in cntract 10.7 Explain (in utline) hw damages fr breach f cntract are calculated 10.8 Explain the equitable remedies f specific perfrmance and injunctin 10.9 Apply the rules f remedies t a given scenari.

29 11. Understand the cncept f emplyment 11.1 Identify and apply the tests t distinguish an emplyee frm the selfemplyed 11.2 Explain why the distinctins between emplyees and the selfemplyed are imprtant. 12. Understand the cnstraints n the freedm f cntract in the emplyment situatin 12.1 Identify and explain the duties implied by the cmmn law int the emplyment cntract Explain hw the emplyment cntract is regulated by the fllwing statutes: Emplyment Rights Act s1-3, Wrking Time Regulatins, Natinal Minimum Wage Act 12.3 Apply the rules t a given scenari. 13. Understand hw the emplyment cntract is terminated 13.1 Explain the fllwing different ways in which the emplyment cntract cmes t an end: peratin f law (death, disslutin f partnership, appintment f a receiver r liquidatr), frustratin, agreement, resignatin, dismissal 13.2 Explain the different types f dismissal (summary, wrngful, cnstructive, unfair) 13.3 Explain the ptentially fair reasns fr dismissal cntained in s98(1) ERA 13.4 Explain the requirement f reasnableness impsed n emplyers 13.5 Explain the remedies available fr unfair dismissal and redundancy 13.6 Apply the rules n unfair dismissal and redundancy t a given scenari. 14. Understand the law f agency 14.1 Explain the imprtance f the agency relatinship in the business cntext Explain hw the agency relatinship cmes int existence 14.3 Explain the authrity f an agent 14.4 Explain the rights, duties, and ptential liability f agents and principals 14.5 Apply the rules t a given scenari.

30 15. Understand the different frms f business rganisatin 15.1 List the different types f rganisatin (sle trader, partnership, limited liability partnership, private limited cmpany, public limited cmpany) and explain the differences 15.2 Analyse the advantages and disadvantages f the different types f business rganisatin 15.3 Apply these t a given scenari. 16. Understand the principles f partnership law 16.1 Explain the liability f partners in the different types f partnership in cntract and trt 16.2 Identify the mechanisms f frmatin f partnership 16.3 Explain the reasns whereby partnerships may be disslved 16.4 Apply the rules t a given scenari. 17. Understand the nature f the cmpany's cnstitutin 17.1 Explain the cncept f separate legal persnality f a cmpany 17.2 Identify thse ccasins when the veil f incrpratin may be lifted 17.3 Explain the cntent and purpse f the memrandum f assciatin 17.4 Explain the cntent and purpse f the articles f assciatin 17.5 Detail the cntractual nature f the articles under s33 Cmpanies Act Explain hw the articles may be altered and the cnstraints n alteratin 17.7 Apply the rules t a given scenari. 18. Understand the legal framewrk affecting the directrs f a cmpany 18.1 Explain the functins f directrs 18.2 Identify the ways in which directrs can be appinted 18.3 Identify the ways in which directrs can lse ffice thrugh disqualificatin and remval by sharehlders 18.4 List and evaluate the duties impsed n directrs by the Cmpanies Act Apply the rules t a given scenari.

31 19. Understand the legal framewrk gverning a business in financial difficulties 19.1 Explain the circumstances when cmpulsry liquidatin can ccur under the Inslvency Act Explain the difference between a members' and a creditrs' winding up 19.3 Identify the circumstances when administratin may be an alternative t liquidatin 19.4 Apply the rules and prcedure fr inslvency t a given scenari. 20. Understand the legal framewrk gverning the criminal and fraudulent actins f fficers and ther emplyees f a cmpany 20.1 Differentiate between fraudulent and wrngful trading 20.2 Explain the categries f mney laundering, and any available defences 20.3 Explain the rules (in utline) f the rules in the Criminal Justice Act 1993 that regulate insider dealing 20.4 Apply the rules n criminal and fraudulent behaviur t a given scenari. Instructins t candidates Time allwed 3 hurs 10 minutes which includes 10 minutes reading time This is a clsed bk examinatin. The examinatin paper will cnsist f a situatin candidates need t understand and then answer five cmpulsry questins which will vary in mark value. Each main questin will cntain a range f smaller mark questins which vary in value. The pass mark is 50% Bklist Recmmended: BPP Study Guide IFA Business and Regulatry Envirnment Others Business Law, James Marsn, Oxfrd University Press, ISBN Cntract Law, Ewan Mckendrick, Palgrave Macmillan, ISBN