Questions and Answers for P7 Financial Accounting and Tax Principles

Question 1: On the objective test questions element of the paper will marks be awarded for workings? Answer: OTQs will range from 2 to 4 marks. Marks for workings will be available for questions where 3 or 4 marks are available. Question 2: Will all syllabus areas be covered in the examination paper? Answer: The use of OTQs enables the Examiner to assess a broad range of syllabus topics. Question 3: What is the rationale for including OTQs at this level? Answer: OTQs allows the Examiner to assess a broader range of syllabus topics at each sitting and allows for progressive assessment as students move through from the Certificate to the Managerial and then the Strategic levels culminating in the TOPCIMA. Question 4: Who will deliver this paper? Answer: Although there are elements of the current Financial Accounting, Finance and Business Taxation papers in syllabus it is envisaged that no more than two individuals would be involved in its delivery. Question 5: Will syllabus weightings be reflected in the exam paper itself? Answer: As far as possible this is the intention. Question 6: Can any part of the syllabus be examined in Section C of the exam paper? Answer: Yes, although tax principles are unlikely to be in this section. Question 7: You indicated that tax will be examined along general principles, how will this present itself in the exam? Answer: One possibility is that students will be presented with a fictitious country where some basic tax rules are given in the questions. The students will be required to do computations to test the theory. For teaching purposes then you can explore tax in a local context, for example Sri Lanka course providers can teach students about Sri Lankan tax systems. However, please ensure that students are aware that they are being tested on the general principles and not country specific details.
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Question 8: The syllabus seems quite large in certain areas and there is a lot to cover in this paper. How will CIMA ensure that all areas of it are tested? Cynical students are only interested in passing exams and with the increase in syllabus content then many students may only choose to learn 75% of the syllabus, to select what they learn. Answer: The multiple-choice questions will help to ensure that this is managed. This is not a new situation. Colleges must remember that they're teaching people a profession and not just how to pass exams. Question 9: Would cash flow statements and cash flow forecasts ever be examined in depth on the same paper? Answer: No Question 10: If the pass mark for this paper remains at 50% then surely students can pass on Section A of the paper alone. Therefore, a student could pass the paper without understanding or producing a set of financial accounts at all. How do you feel about that? Answer: Only one person has ever achieved 20/20 in Section A, the average is between 8-12 out of 20. This is an issue that is more commonly raised with exemptions but it is worth bearing in mind that if they don't get caught at this point then they will at a later date. Financial accounts will have to be understood at the Strategic level. Question 11: Will formula sheets still be attached? Answer: Yes and methodology is marked. If students select the right formula then this will be marked. Question 12: Why has tax been relegated? Answer: Not many management accountants have detailed knowledge of tax. CPD opportunities are available for those that are interested, however, most management accountants pass specific tax queries on to tax experts. These findings came out of research conducted for this new qualification. Question 13: Will de-mergers be in Section C of the paper? Answer: No. It is possible that it could appear in the short form questions for 10 marks. Question 14: What additional support will be available to colleges regarding these changes? Answer: The pilot papers, syllabus, study guides, transition arrangements will all be available on the website for your reference. Question 15:

CIMA February 2004

In Section A, some of the multiple-choice questions are quite a length. Do you think that this is unfair and disproportionate to the marks that are allocated for these questions? Answer: The marks are not based on the number of words in the question but on how difficult the question is. A long question does not always require a long answer. Question 16: With the move towards International Standards, will all the terminology throughout the syllabus be international in tone? Answer: Yes Question 17: Surely the term "financial management" should be in the title for this paper! Answer: It is the name of the pillar in which the paper sits. It is worth remembering that tutors should be examining the pillar as a whole.

CIMA February 2004