ACA Syllabus and

Technical Knowledge Grids

Advanced Level
FOR EXAMS IN 2021
Contents
ACA OVERVIEW 3

ACA Syllabus 9
Skills progression through the ACA exams  11

ADVANCED LEVEL 15

Corporate Reporting 16
Strategic Business Management 26
Case Study 38

TECHNICAL KNOWLEDGE 44

Assurance and Audit 45

Business Analysis 47
Ethics Codes and Standards 51
Financial Reporting – IFRS 52
Taxation54
ACA overview
The ICAEW chartered accountancy qualification, the ACA, is one of the most advanced learning and
professional development programmes available. Its integrated components provide an in-depth
understanding across accountancy, finance and business. Combined, these components help build
the technical knowledge, professional skills and practical experience needed to become an ICAEW
Chartered Accountant.
Each component is designed to complement each other, which means that students can put theory
into practice and can understand and apply what they learn to their day-to-day work.
The components are:

ICAEW constantly reviews the content of the ACA qualification to reflect real life trends and advances
in technology. We work closely with employers, tuition providers, academics and examiners to ensure
that the updates equip the chartered accountants of the future with the skills and knowledge they need
to be successful.

THE ACA QUALIFICATION AND TECHNOLOGY

Rapid growth in technology has automated many compliance elements of accountancy. But, with
technology also comes complexity and risk. Accountants need to adapt and develop new skills to
manage these technological changes such as data analytics, automation and cyber security.
While there are many new technology capabilities that have broad application across the business
and consumer environment, four trends have the greatest potential to transform the accountancy
profession: artificial intelligence, blockchain, cyber security and data.

ARTIFICIAL INTELLIGENCE learn to classify, cluster or predict things.

Artificial intelligence (AI) covers a range of In the short to medium term, AI brings many
technologies that aim to replicate human opportunities for accountants to improve their
capabilities such as learning, knowing, sensing, efficiency, provide more insight and deliver
reasoning, creating, achieving goals and more value to businesses. In the longer term,
generating and understanding language. Recent AI raises opportunities for much more radical
developments in AI have focused on machine change, as systems increasingly take over
learning techniques, which use algorithms to decision-making tasks currently done by
identify patterns in large data sets in order to accountants.

© ICAEW 2020 3
BLOCKCHAIN DATA
Blockchain is the most successful and common Accounting tasks are grounded in data.
implementation of a distributed ledger system. Therefore, improvements in the ability to
The name blockchain is inherently descriptive capture, process, store, analyse, visualise and
of how the technology works – new transactions share data will have particular relevance to
are gathered together into a block and added how accountants undertake their work. Recent
to a chain of all previous transactions by a advances in this area are driven by two key
cryptographic process that is complex to trends: big data and data analytics.
perform, but which makes it easy to confirm that
There is no single meaning for ‘big data’, but,
the history of all transactions is genuine.
broadly speaking, it is used to refer to data with
Blockchain has the potential to increase the the following characteristics:
efficiency of accounting for transactions and
• Volume – very large amounts of data;
assets. It creates a kind of ‘universal entry
bookkeeping’, where a single entry is shared • Variety – new sources of data, particularly
identically and permanently with every unstructured data such as text and images;
participant. This would create certainty over and
rights and obligations and provenance, which • Velocity – greater emphasis on speed and
in turn would empower the accountancy real-time data.
profession to expand its scope to record more The term ‘data analytics’ covers the wide
types of activity than before, and to better range of tools available to analyse data. As
understand the economic reality underpinning well as identifying correlations, outliers, trends
the transactions recorded. and exceptions, these tools typically enable
more focus on granular data analysis. They
CYBER SECURITY also facilitate more sophisticated modelling,
Cyber security issues affect businesses of prediction and visualisation. New capabilities
all sizes and across all sectors. Traditional in data enable the accountancy profession
approaches to information security focused on to radically improve decision making across
internal controls to achieve the confidentiality, organisations. Many decisions, in practice, are
integrity and availability of data. While these still based on assumptions, instinct, estimates
controls remain important, cyber security and guesswork. These trends in data can
incorporates a wider range of threats and provide hard evidence for decisions, and
vulnerabilities. Potential threats now come from improve their quality. The discipline, structure
around the world and can involve organised and ethics-based approach of accountants
criminals and corporate spies, as well as also mean that the profession is well placed
disaffected or careless employees. Security to help improve aspects of data governance,
weaknesses can be found throughout a supply such as data standards and quality, across other
chain, not just within a single business. business areas.

The complex nature of cyber risk is a challenge While ICAEW believe that the ABCD
to traditional accountancy approaches towards technologies have the potential to be the most
risk and control. Data breaches should be seen transformative for the accountancy profession,
as inevitable, and businesses need to focus many other areas of technology are also having
more on the detection of breaches, response to a direct impact on accountants. Some key trends
incidents and the resilience to keep operating are highlighted below.
in the face of attacks. Many organisations still Automation refers to the use of a wide range
conduct only an annual risk review, and this of technologies to perform tasks which were
approach should evolve into more continuous previously done by humans. Automation
activities, such as building intelligence about can be driven by smarter software, by better
attackers, looking for real-time evidence of integration between software and data sources,
breaches and regularly reviewing how new and by specific automation technologies.
innovations are impacting on cyber risk. In this Robotic process automation (RPA) involves
sense, good cyber security is as much a way of using general-purpose software – known as a
thinking, and an organisational culture, as it is a ‘robot’ – programmed to perform rules-based,
series of effective controls. repetitive tasks previously carried out by

4 ACA OVERVIEW © ICAEW 2020

people interacting with a computer. Processes can be used to recommend investments for
suitable for RPA are typically high volume, low customers directly, without human intervention –
complexity and labour-intensive. a service known as robo-advising.
Cloud computing is the term used for the These and other innovations are likely to have a
provision of computing services, such as significant impact on the way that accountants
accounting applications, over the internet. It is access, move and manage business finances.
based on a service model rather than on the Technology can provide information more
purchase of computing assets, and it helps quickly and often more accurately than humans,
organisations increase efficiency by allowing but it cannot replicate human intelligence and
resources to be shared between different users. quality decision making. Therefore, chartered
Cloud computing is closely linked to the use of accountants hold a key role in data analytics, in
mobile technology, primarily smartphones and validating the source of the data, interpreting
tablets, as it allows access to internet-based and analysing the outputs. Technology provides
services on demand, at any time and from any opportunities for chartered accountants to use
location. their professional skills to add value to their
clients and/or the businesses in which they work.
Fintech is a term used to cover a wide range
of technology-based innovations in financial The continuing evolution of the ACA
services, such as new payment systems and qualification will embrace change in technology
digital banking services. New platforms can to equip future professionals with these key
directly connect lenders and borrowers, skills.
enabling peer-to-peer lending; and algorithms

PROFESSIONAL DEVELOPMENT

ICAEW Chartered Accountants are known for qualification improves students’ ability and
their professionalism and expertise. Professional performance in seven key areas:
development prepares students to successfully
• Adding value – add value to the
handle a variety of different situations that they
organisation, team or role in order to achieve
encounter throughout their career. The ACA
objectives

© ICAEW 2020 5
• Communication – communicate effectively them in context within the ACA exams,
at all levels, using oral, written and students develop and apply ethical skills
presentational skills to achieve positive and behaviours within their daily work
outcomes experience supported by their regular
• Decision making – gather, interpret and employer reviews and the professional
evaluate data to make effective decisions. development framework.
• Ethics and professionalism – behave ethically
THREE TO FIVE YEARS’ PRACTICAL
and sustainably while respecting others to
uphold the values of the organisation and WORK EXPERIENCE
the accountancy profession Practical work experience is done as part
• Problem solving – analyse a problem, of a training agreement with an authorised
generate options and make training employer or principal. Students need
recommendations to arrive at appropriate to complete 450 days, which normally takes
solutions between three and five years. The knowledge,
• Teamwork – work collaboratively as a skills and experience they gain as part of
member or leader of a team to achieve their training are invaluable, giving them the
shared goals opportunity to put what they’re learning into
practice. Experience can be completed in at
• Technical competence – seek, learn and use least one of the following six categories:
technology and technical information to
support the achievement of organisation or 1. Accounting
team goals 2. Audit and assurance (audit is not
compulsory)
ETHICS AND PROFESSIONAL 3. Financial management
SCEPTICISM 4. Information technology
Ethics is more than just knowing the rules
5. Insolvency
around integrity, objectivity, professional
competence and due care, confidentiality and 6. Taxation
professional behaviour. It’s about identifying Student practical work experience should:
ethical dilemmas, understanding the
implications, making judgements and behaving • include responsibility levels that increase in
appropriately as well as using professional depth and scope as the student progresses
scepticism to build business trust. We integrate through their training;
ethics throughout the ACA qualification to • be recorded throughout their training
develop students’ ethical capabilities to make agreement; and
suitable decisions. We embed ethics into the • expose them to as many different practical
ACA and develop students’ ethical capabilities assignments, finance functions and/or clients
in three ways: in as many different sectors as possible.
1. Knowledge of ICAEW Code of Ethics – the
online Ethics Learning Programme based
15 ACCOUNTANCY, FINANCE AND
on the ICAEW Code of Ethics ensures that BUSINESS EXAMS
students understand the ICAEW ethical Students gain in-depth knowledge across a
framework, are able to identify ethical broad range of topics in accountancy, finance
principles relating to a scenario, and can and business. The exams are designed to
advise on appropriate ways of addressing an complement their practical work experience,
ethical threat. so they constantly progress through the
2. Integration of ethical issues into all 15 ACA qualification.
exams – students are assessed on their There are 15 exams over three levels –
understanding of, and reaction to, ethical Certificate, Professional and Advanced. They
dilemmas within the context of the subject can be taken in any order with the exception
matter of each module. of the Case Study which has to be attempted
3. Practical application – having learnt the last, within the final year of an ACA training
ethical principles and requirements via agreement and once all other exams have been
the Ethics Learning Programme, applying taken or received credit.

6 ACA OVERVIEW © ICAEW 2020

 Case Study

Advanced
Level
Strategic Business
Corporate Reporting
Management

Financial Accounting Business Strategy

Business Planning
and Reporting and Technology
Professional
Level
Audit and Assurance Tax Compliance Financial Management

Accounting Management Information Principles of Taxation

Certificate
Level
Business, Technology
Assurance Law
and Finance

CERTIFICATE LEVEL Prescribed texts are permitted for Audit and

There are six exams at this level that introduce Assurance, Finance Accounting and Reporting
the fundamentals of accountancy, finance and and Tax Compliance, with open books permitted
business. Students may be eligible for credit for for the Business Planning exams.
some exams if they have studied a qualification The Professional Level exams are flexible and
we recognise. Find out more at icaew.com/cpl. can be taken in any order to fit with a student’s
These six exams are also available as a stand- day-to-day work. The Business Planning and
alone certificate, the ICAEW Certificate in Business Strategy and Technology exams in
Finance, Accounting and Business (ICAEW particular help students to progress to the
CFAB) and as part of the ICAEW Level 4 Advanced Level.
Trailblazer in Accountancy. ICAEW CFAB and our Alternative exams are available for the Business
apprenticeship can serve as stepping stones to Planning and Financial Accounting and
the ACA qualification. Reporting modules.
Once students have completed the ICAEW The Business Planning exams provide students
CFAB qualification or the ACA Certificate Level, with the opportunity to gain subject- and
they are eligible to apply towards gaining BFP sector-specific knowledge while studying for
status. ICAEW Business and Finance Professional the ACA. The suite of Business Planning exams
(BFP) is an internationally recognised is based on the same syllabus structure and
designation and professional status. skills frameworks, and will give students the
opportunity to demonstrate their learning and
PROFESSIONAL LEVEL use this in the context of taxation, banking or
The next six exams build on the fundamentals insurance. There are three to choose from –
and test students’ understanding and ability Business Planning: Taxation, Business Planning:
to use technical knowledge in real-life Banking, and Business Planning: Insurance.
scenarios. The exams can be taken in March, Students will need to sit one of the Business
June, September and December. Please note, Planning exams.
the Business Planning alternative exams for Alternative financial reporting exams are
banking and insurance are available at the June, also available for Financial Accounting and
September and December sittings. Reporting. Students can choose between two

© ICAEW 2020 7
different contexts, either UK GAAP or IFRS. This
means that students can study the financial
reporting framework most beneficial to their
employer and clients. Students will need to sit one
version of the Financial Accounting and Reporting
exam.

ADVANCED LEVEL
The Corporate Reporting and Strategic Business
Management exams test students’ understanding
and strategic decision-making at a senior level.
They present real-life scenarios, with increased
complexity and implications from the Professional
Level exams.
The Case Study tests all the knowledge, skills and
experience gained so far. It presents a complex
business issue which challenges students’ ability
to problem solve, identify the ethical implications
and provide an effective solution.
The Advanced Level exams can be taken in July
and November. They are fully open book, so
they replicate a real-life scenario where all the
resources are at their fingertips.
An authorised training employer or principal
will guide their students on the exams which are
right for them. If a student is studying the ACA
independently, they should consider their future
ambitions when selecting which exams to sit.

8 ACA OVERVIEW © ICAEW 2020

ACA Syllabus
The ACA syllabus is updated annually. The aim of the annual update is to ensure that the syllabus
remains fit for purpose and can include amendments to cater for technical changes, clarification
of learning outcomes, and inclusion of new areas of knowledge impacting ICAEW Chartered
Accountants. The process includes consultation with all key stakeholder groups and covers the skills,
learning outcomes, and technical knowledge grids of each module.
This document presents the learning outcomes for each of the ACA exams. The learning outcomes
in each exam should be read in conjunction with the relevant technical knowledge grids and, where
applicable, the skills development grid.

UNDERSTANDING THE SYLLABUS FOR EACH MODULE

Each module has the following syllabus components:

Module These are a series of abilities which trainees will possess once they complete
aims the learning and assessment for this particular module.

Each module aim creates a syllabus area of technical and skills-based

Specification learning. The specification grid assigns an assessment weighting to each
grid syllabus area, which indicates the proportion of learning represented by each
syllabus area in the exam.

Learning outcomes are detailed statements which identify what the learner
Learning will know and be able to do by the end of the module, and which will be
outcomes demonstrable on passing the exam.

The Technical Knowledge Grid shows the technical knowledge in the

disciplines of financial reporting, audit and assurance, business analysis, ethics
and taxation covered in the ACA syllabus by module. For each technical area,
Technical the level of knowledge required is indicated by a letter from A to D, as follows.
knowledge
• Level D – awareness of the scope of the standard
grid
• Level C – general knowledge with a basic understanding
• Level B – working knowledge with a broad understanding
• Level A – thorough knowledge with a solid understanding

ASSESSMENT 3.5 hours long. The Case Study exam is 4 hours

The six Certificate Level exams each have a long. Each has a 50% pass mark.
1.5-hour exam, a 55% pass mark, and can be sat For more information, guidance and support on
throughout the year at an ICAEW-approved test computer-based exams, visit the exam resources
centre. area on our website at icaew.com/cbe
The Professional Level module exams are
2.5 hours long, except for Financial Accounting FLEXIBILITY
and Reporting which is 3 hours long. Each exam There are no regulations stipulating the
has a 55% pass mark. order in which students must attempt the
There are three Advanced Level modules exams, allowing employers to design training
examined. The Corporate Reporting and programmes according to business needs. The
Strategic Business Management exams are exception to this rule is the Case Study, which

© ICAEW 2020 9
must be the last exam attempted and when a OPEN BOOK POLICY
student has entered their final year of training. For some Professional Level exams, students
Students will be permitted a maximum of four are permitted to take certain publications into
attempts at each Certificate and Professional the exam. Details of these publications and our
Level exam, and unlimited attempts at the open book policy can be found at icaew.com/
Advanced Level exams. permitted texts
For the Professional Level Business Planning
CREDIT FOR PRIOR LEARNING (CPL) alternative exams, and at the Advanced Level,
Students with previous professional or academic students are permitted to take any material into
qualifications may be eligible to apply for CPL the exam, subject to practical space restrictions.
for up to 12 modules at the Certificate and
Professional Levels. CPL is not available at the
Advanced Level. For more information, visit
icaew.com/cpl

10 ACA OVERVIEW © ICAEW 2020

Skills progression through the ACA exams
The complete set of professional skills that ICAEW Chartered Accountants are required to develop
during their training are detailed in the seven key areas of skills covered in the previous section on
professional development. A subsection of these skills are embedded in the 15 modules and assessed
in exams. The following skills are present throughout the 15 accountancy, finance and business
modules:

SKILL OVERALL

Understand a business or accounting situation, prioritise by

Assimilating and
determining key drivers, issues and requirements and identify
using information
any relevant information.

Structuring Structure information from various sources into suitable formats for
problems and analysis and provide creative and pragmatic solutions in a business
solutions environment.

Apply professional scepticism and critical thinking to identify faults,

Applying
gaps, inconsistencies and interactions from a range of relevant
judgement
information sources and relate issues to a business environment.

Concluding, Apply technical knowledge, skills and experience to support

recommending reasoning and conclusion and formulate opinions, advice, plans,
and solutions, options and reservations based on valid evidence and
communicating communicate clearer in a manner suitable for the recipient.

The level of skill required to pass each exam increases as ACA trainees progress upwards through each
Level of the ACA qualification. The skills progression embedded throughout the ACA qualification
ensures ACA trainees develop the knowledge and skills can successfully operate in the modern
workplace and which are expected by today’s forward thinking employers.

© ICAEW 2020 11
 Certificate Level Professional Level Advanced Level

Financial
Accounting
Principles & Reporting, Business
Skills Assurance, Corporate
of Taxation, Audit & Planning
Business, Reporting and
Management Assurance, and Business Case Study
Technology & Strategic Business
Information, Financial Strategy &
Finance, Law Management
Accounting Management, Technology
Tax
Compliance

Assimilating and using information

Understanding Objective Objective Scenarios Complex scenarios Unstructured

the situation testing testing complex business
and the and simple scenarios
requirements scenarios

Identifying and Information as provided Single Several Multiple information Multiple

using relevant information information sources provided information
information source sources sources including
provided provided own research

Identifying and Issues given Issues included in scenarios Issues included in Issues included
prioritising key complex scenarios in unstructured
issues complex scenarios

Structuring problems and solutions

Structuring data Specified techniques Specified Techniques Techniques inferred Unspecified

techniques inferred by by nature of techniques
nature of problem
problem

Developing Highly Specified Specified problems Specified and Defined output

solutions specified problems implicit problems but unspecified
tasks problems

Applying judgement

Applying Objective testing Specified Specified Specified Underlying

professional requirement requirement requirement in requirement
scepticism and in simple in scenario complex scenario within complex
critical thinking scenario scenario

Relating issues Objective Objective Issues in scenarios Issues in complex Issues in complex,
to the broader testing testing scenarios unstructured
business and Issues scenarios
environment, in simple
including ethical scenarios
issues

Concluding, recommending and communicating

Concluding and Objective Not assessed Specified conclusions and Specified Conclusions and
recommending testing recommendations in simple conclusions recommendations
scenarios and reasoned supported by own
recommendations evidence
in complex
scenarios

Communicating Prescribed exam format Exam requirements, Professional Professional report

including some professional presentations with appendices
presentation including reasoned
recommendations

12 ACA OVERVIEW © ICAEW 2020

PROFESSIONAL SKILLS ASSESSED IN THE ACA EXAMS

ASSIMILATING AND USING INFORMATION

Understand the situation and Identify and use relevant Identify and prioritise key
the requirements information issues and stay on task

• Demonstrate understanding • Interpret information • Identify business and

of the business context provided in various formats financial issues from a
• Recognise new and complex • Evaluate the relevance of scenario
ideas within a scenario information provided • Prioritise key issues
• Identify the needs of • Use multiple information • Work effectively within time
customers and clients sources constraints
• Explain different stakeholder • Filter information provided • Operate to a brief in a given
perspectives and interests to identify critical facts scenario
• Identify risks within a
scenario
• Identify elements of
uncertainty within a scenario
• Identify ethical issues
including public interest and
sustainability issues within a
scenario

STRUCTURING PROBLEMS AND SOLUTIONS

Structure data Develop solutions

• Structure information from various sources • Identify and apply relevant technical
into suitable formats for analysis knowledge and skills to analyse a specific
• Identify any information gaps problem
• Frame questions to clarify information • Use structured information to identify
evidence-based solutions
• Use a range of data types and sources to
inform analysis and decision-making • Identify creative and pragmatic solutions in a
business environment
• Structure and analyse financial and non-
financial data to enhance understanding of • Identify opportunities to add value
business issues and their underlying causes • Identify and anticipate problems that may
• Present analysis in accordance with result from a decision
instructions and criteria • Identify a range of possible solutions based
on analysis
• Identify ethical dimensions of possible
solutions
• Select appropriate courses of action using an
ethical framework
• Identify the solution which is the best fit with
acceptance criteria and objectives
• Define objectives and acceptance criteria for
solutions

© ICAEW 2020 13
APPLYING JUDGEMENT

Apply professional scepticism

Relate issues to the environment
and critical thinking

• Recognise bias and varying quality in data • Appreciate when more expert help is required
and evidence • Identify related issues in scenarios
• Identify assumptions or faults in arguments • Assess different stakeholder perspectives
• Identify gaps in evidence when evaluating options
• Identify inconsistencies and contradictory • Retain an overview of the business issue or
information scenario
• Assess interaction of information from • Appraise corporate responsibility and
different sources sustainability issues
• Exercise ethical judgement • Appraise the effects of alternative future
scenarios
• Appraise ethical, public interest and
regulatory issues

CONCLUDING, RECOMMENDING AND COMMUNICATING

Conclusions Recommendations Communication

• Apply technical knowledge • Present recommendations in • Present a basic or routine

to support reasoning and accordance with instructions memorandum or briefing
conclusions and defined criteria note in writing in a clear and
• Apply professional • Make recommendations in concise style
experience and evidence to situations where risks and • Present analysis and
support reasoning uncertainty exist recommendations in
• Use valid and different • Formulate opinions, advice, accordance with instructions
technical skills to formulate recommendations, plans, • Communicate clearly to a
opinions, advice, plans, solutions, options and specialist or non-specialist
solutions, options and reservations based on valid audience in a manner
reservations evidence suitable for the recipient
• Make evidence-based • Prepare the advice, report, or
recommendations which can notes required in a clear and
be justified by reference to concise style
supporting data and other
information
• Develop recommendations
which combine different
technical skills in a practical
situation

14 ACA OVERVIEW © ICAEW 2020

Advanced Level
Corporate Reporting
MODULE AIM • evaluate corporate reporting policies,
To enable students to apply technical estimates and disclosures in a scenario in
knowledge, analytical techniques and order to be able to assess whether they are
professional skills to resolve compliance and in compliance with accounting standards
business issues that arise in the context of the and are appropriate in the context of audit
preparation and evaluation of corporate reports objectives.
and from providing audit services. • identify and explain ethical issues. Where
ethical dilemmas arise, students will be able
Students will be required to use technical
to recommend and justify and determine
knowledge and professional judgement to
appropriate actions and ethical safeguards
identify, explain and evaluate alternatives and
to mitigate threats.
to determine the appropriate solutions to
compliance issues, giving due consideration
PRIOR KNOWLEDGE
to the needs of clients and other stakeholders.
The commercial context and impact of This module assumes and develops the
recommendations and ethical issues will knowledge and skills acquired in the Financial
also need to be considered in making such Accounting and Reporting module and in the
judgements. Audit and Assurance module.

On completion of this module, students will be Background knowledge based upon the
able to: strategic elements of the Business Planning
modules, Business Strategy and Technology
• formulate, implement and evaluate and Financial Management modules will also be
corporate reporting policies for single required in evaluating the business and financial
entities and groups of varying sizes and risks of reporting entities.
in a variety of industries. They will be able
to discern and formulate the appropriate REGULATION
financial reporting treatment for complex
transactions and complex scenarios. The regulations relating to auditing and
Students will be able to evaluate and corporate reporting will have international
apply technical knowledge from individual application and are therefore based upon IFRSs
accounting standards and apply professional and ISAs (UK). Knowledge of specific national
skills to integrate knowledge where several standards will not be tested.
accounting standards are simultaneously
applicable and interact. METHOD OF ASSESSMENT
• analyse, interpret, evaluate and compare The Corporate Reporting module exam is
financial statements of entities both over 3.5 hours long. Each exam will contain questions
time and across a range of industries. requiring integration of knowledge and skills,
including ethics. The exam will consist of three
• explain the processes involved in planning
questions. Ethical issues and problems could
an audit, evaluate internal controls, appraise
appear in any of the three questions.
risk including analysing quantitative and
qualitative data, and gather evidence The exam will be open book and will permit
including using data analytics to draw students to take any written or printed material
conclusions in accordance with the terms into the exam, subject to practical space
of the engagement. In addition, they will restrictions. To see the recommended text(s) for
be able to perform a range of assurance this exam, go to icaew.com/permittedtexts.
engagements and related tasks.

16 ADVANCED LEVEL © ICAEW 2020

ETHICS AND PROFESSIONAL is reflected in ethics being covered in its own
SCEPTICISM specific syllabus area as well as featuring heavily
At the Advanced Level students will be in the integrated learning outcomes. Social
expected to demonstrate the higher skills of responsibility, sustainability and environmental
sound, discerning business judgement and matters, identifying earnings manipulation and
critical evaluation. The ethical implications creative accounting are included. The ethical
will be both at the organisational level and for codes referenced will be those issued by IESBA
individuals. This must be paramount whether and ICAEW. The use of professional scepticism
the accountant be in public practice or in in a complex scenario is a necessary skill for the
business. The importance of ethical practice trusted business professional.

SPECIFICATION GRID
This grid shows the relative weightings of subjects within this module and should guide the relative
study time spent on each. Over time the marks available in the assessment will be within the ranges of
weightings below, but slight variations may occur in individual examinations to enable suitably rigorous
questions to be set.

SYLLABUS AREA WEIGHTING

Corporate Reporting – Compliance

55–65%
Corporate Reporting – Financial statement analysis
Audit and Assurance 30–40%
Ethics 5–10%

The following learning outcomes should be read in conjunction with the relevant sections of the
technical knowledge grids from at the end of this document.

CORPORATE REPORTING – c. explain and appraise accounting standards

COMPLIANCE that relate to the impact of changes in
accounting policies and estimates;
Students will be able to formulate, implement
and evaluate accounting and reporting policies d. explain and evaluate the impact of
for single entities and groups of varying sizes underlying assumptions on financial
and in a variety of industries. They will be able to statements; and
discern and formulate the appropriate financial e. identify and explain current and emerging
reporting treatment for complex transactions issues in corporate reporting.
and complex scenarios. Students will be able
2 REPORTING PERFORMANCE
to evaluate and apply technical knowledge
from individual accounting standards and apply a. explain how different methods of
professional skills to integrate knowledge where recognising and measuring assets and
several accounting standards are simultaneously liabilities can affect reported financial
applicable and interact. performance;
In the assessment, students may be required to: b. explain and appraise accounting standards
that relate to reporting performance:
1 PRINCIPLES in respect of presentation of financial
statements; revenue; operating segments;
a. explain the impact of accounting
continuing and discontinued operations;
principles and bases of measurement in
EPS; interim reporting;
corporate reporting, for example fair value
measurement; c. formulate and evaluate accounting and
reporting policies for single entities and
b. appraise corporate reporting regulations,
groups of varying sizes and in a variety of
and related legal requirements, with respect
industries; and
to presentation, disclosure, recognition and
measurement;

© ICAEW 2020 17
d. calculate and disclose, from financial and b. calculate and disclose, from financial and
other qualitative data, the amounts to be other data, the amounts to be included
included in an entity’s financial statements in an entity’s consolidated financial
according to legal requirements, applicable statements in respect of its new, continuing
financial reporting standards and accounting and discontinued interests (which include
and reporting policies. situations when acquisitions occur in stages
and in partial disposals) in subsidiaries,
3 ASSETS AND NON-FINANCIAL LIABILITIES associates and joint ventures.
a. explain how different methods of
recognising and measuring assets and 7 REPORTING TRANSACTIONS AND BALANCES
liabilities can affect reported financial IN FOREIGN CURRENCIES AND OPERATIONS
position, and explain the role of data a. determine and calculate how exchange rate
analytics in financial asset and liability variations are recognised and measured
valuation; and and how they can impact on reported
b. explain and appraise accounting standards performance, position and cash flows of
that relate to assets and non-financial single entities and groups; and
liabilities for example: property, plant and b. demonstrate, explain and appraise how
equipment; intangible assets, held-for-sales foreign exchange transactions are measured
assets; inventories; investment properties; and how the financial statements of foreign
provisions and contingencies. operations are translated.

4 FINANCING 8 TAXATION
a. determine and calculate how different a. explain, determine and calculate how
methods for recognising, measuring and current and deferred tax is recognised and
classifying financial assets and financial appraise accounting standards that relate to
liabilities can impact upon reported current tax and deferred tax.
performance and position;
b. appraise and evaluate cash flow measures CORPORATE REPORTING – FINANCIAL
and disclosures in single entities and groups; STATEMENT ANALYSIS
c. evaluate the impact of accounting policies Students will be able to analyse, interpret,
and choice in respect of financing decisions evaluate and compare financial statements of
for example hedge accounting and fair entities both over time and across a range of
values; and industries.
d. explain and appraise accounting standards In the assessment, students may be required to:
that relate to an entity’s financing activities
which include: financial instruments; 9 FINANCIAL STATEMENT ANALYSIS
leasing; cash flows; borrowing costs; and a. comment on and critically appraise the
government grants. nature and validity of financial and non-
financial information included in published
5 EMPLOYEE REMUNERATION
financial statements including how these
a. explain how different methods of providing correlate with an understanding of the entity;
remuneration for employees may impact upon b. comment on and critically appraise the
reported performance and position; and nature and validity of information disclosed
b. explain and appraise accounting standards in annual reports, including integrated
that relate to employee remuneration which reporting and other voluntary disclosures,
include different forms of short-term and including those relating to natural capital
long-term employee compensation; sustainability and climate change;
retirement benefits; and share-based payment. c. appraise the limitations of financial analysis;
6 GROUPS d. analyse and evaluate the performance,
a. identify and show the criteria used to position, liquidity, efficiency and solvency
determine whether and how different types of an entity through the use of ratios and
of investment are recognised and measured similar forms of analysis including using
as business combinations; and quantitative and qualitative data;

18 ADVANCED LEVEL © ICAEW 2020

e. interpret the potentially complex economic Task Force on Climate-related Financial
environment in which an entity operates disclosures, big data, data analytics and
and its strategy based upon financial and artificial intelligence).
operational information contained within
the annual report (for example: financial 11 PLANNING
and business reviews, reports on operations a. identify the components of risk and how
by management, corporate governance these components may interrelate;
disclosures, Task Force on Climate-related b. appraise the entity and the, potentially
Financial Disclosures (TCFD), financial complex, economic environment within
summaries); which it operates as a means of identifying
f. appraise the significance of inconsistencies and evaluating the risk of material
and omissions in reported information in misstatement;
evaluating performance; c. identify the risks, including analysing
g. compare the performance and position of quantitative and qualitative data, arising
different entities allowing for inconsistencies from, or affecting, a potentially complex set
in the recognition and measurement criteria of business processes and circumstances
in the financial statement information and assess their implications for the
provided; engagement;
h. make adjustments to reported earnings in d. identify significant business risks (including
order to determine underlying earnings and those arising from cyber security and
compare the performance of an entity over technological advances including cloud
time; computing, cryptocurrencies and robotic
i. analyse and evaluate business risks and process automations) and assess their
assess their implications for corporate potential impact upon the financial
reporting; statements and the audit engagement;
j. analyse and evaluate financial risks (for e. evaluate the impact of risk and materiality
example financing, currency and interest in preparing the audit plan, for example
rate risks) and assess their implications for the nature, timing and extent of audit
corporate reporting; and procedures;
k. compare and appraise the significance of f. determine analytical procedures, where
accruals basis and cash flow reporting. appropriate, at the planning stage using
technical knowledge of corporate reporting,
AUDIT AND ASSURANCE data analytics software and skills of financial
Students will be able to explain the processes statement analysis;
involved in planning an audit, evaluating g. evaluate the components of audit risk for
internal controls, appraising risk including a specified scenario using data analytics
analysing quantitative and qualitative data, software when appropriate, including
gathering evidence and drawing conclusions in the interactions of inherent risk, control
accordance with the terms of the engagement. risk and detection risk, considering their
In addition, they will be able to perform a range complementary and compensatory nature;
of assurance engagements and related tasks. h. interrogate an organisation’s accounting
In the assessment, students may be required to: records using data analytics software to
identify audit risks;
10 PROFESSIONAL PRACTICE i. show professional scepticism in assessing
a. appraise and explain the role and context of the risk of material misstatement, having
auditing; regard to the reliability of management;
b. explain the nature and purpose of quality j. evaluate, where appropriate, the need
assurance (both at the level of the firm and for, and extent of reliance to be placed on
the individual audit) and assess how it can expertise from other parties to support audit
contribute to risk management; and processes including when to challenge
the extent and working practices of other
c. evaluate and explain current and emerging parties; and
issues in auditing including developments
in the use of technology (eg, impact of

© ICAEW 2020 19
k. prepare, based upon planning procedures, d. evaluate and appraise appropriate corporate
an appropriate audit strategy and detailed governance mechanisms;
audit plan or extracts. e. explain and evaluate the nature and
consequence of relevant corporate
12 INTERNAL CONTROL SYSTEMS
governance codes and set out the required
a. analyse and evaluate the control compliance disclosures;
environment for an entity based on an
f. explain the principles, practices and
understanding of the entity, its operations
disclosures of corporate governance;
and its processes;
g. explain the respective responsibilities of those
b. evaluate an entity’s processes for identifying,
charged with governance and auditors for
assessing and responding to business
corporate risk management and risk reporting;
and operating risks as they impact on the
financial statements; h. explain the respective responsibilities of
those charged with governance and auditors
c. appraise an entity’s accounting information
in respect of internal control systems;
systems and related business processes
relevant to corporate reporting and i. explain and evaluate the role and
communication including virtual requirement for effective two-way
arrangements and cloud computing; communication between those charged with
governance and auditors; and
d. analyse and evaluate strengths and
weaknesses of preventative and detective j. describe and explain the roles and purposes
control mechanisms and processes, of meetings of boards and of shareholders.
highlighting control weaknesses; including
14 AUDIT EVIDENCE
weaknesses related to cyber security and
corporate data controls; a. explain and evaluate the relationship
between audit risk and audit evidence;
e. evaluate controls relating to information
technology and e-commerce; including b. determine audit objectives for each financial
controls associated with cyber security and statement assertion;
corporate data security; c. determine for a particular scenario what
f. explain and appraise the entity’s system for comprises sufficient, appropriate audit
monitoring and modifying internal control evidence;
systems; and d. design and determine audit procedures in
g. devise, explain and evaluate tests of controls. a range of circumstances and scenarios, for
example identifying an appropriate mix of
13 CORPORATE GOVERNANCE tests of controls, analytical procedures and
a. describe and explain the nature and tests of details;
consequences of corporate governance and e. demonstrate how professional scepticism
accountability mechanisms in controlling the should be applied to the process of
operating and financial activities of entities gathering audit evidence and evaluating
of differing sizes, structures and industries; its reliability including the use of client-
b. explain the rights and responsibilities of the generated information and external market
board, board committees (eg, audit and risk information in data analytics;
committees), those charged with governance f. demonstrate and explain, in the application
and individual executive and non-executive of audit procedures, how relevant ISAs affect
directors, with respect to the preparation and audit risk and the evaluation of audit evidence;
audit of financial statements; g. evaluate, applying professional judgement,
c. describe and explain the rights and whether the quantity and quality of evidence
responsibilities of stakeholder groups (eg, gathered from various audit procedures,
executive management, bondholders, including interpreting and extrapolating the
government, securities exchanges, results of sampling, analytical procedures
employees, public interest groups, financial and data analytics, is sufficient to draw
and other regulators, institutional and reasonable conclusions;
individual shareholders) with respect to the h. prepare appropriate audit documentation;
preparation and audit of financial statements; and

20 ADVANCED LEVEL © ICAEW 2020

i. recognise issues arising whilst gathering to achieve a range of differing financial
assurance evidence that should be referred objectives.
to a senior colleague.
AUDIT AND CORPORATE REPORTING —
15 REPORTING AND CONCLUDING INTEGRATED LEARNING OUTCOMES
a. review the appropriateness of the going Students will be able to evaluate corporate
concern basis of accounting and describe reporting policies, estimates and disclosures
relevant going concern disclosures; in a scenario in order to be able to assess
b. review events after the reporting period; whether they are in compliance with accounting
c. review and evaluate, quantitatively and standards and are appropriate in the context of
qualitatively, for example using analytical audit objectives.
procedures and data analytics and artificial In the assessment, students may be required to:
intelligence, the results and conclusions
obtained from audit procedures; 18 INTEGRATED LEARNING OUTCOMES
d. draw conclusions on the nature of the report a. identify and explain corporate reporting
on an audit engagement, and formulate and assurance issues in respect of
an opinion for a statutory audit, which are social responsibility, sustainability and
consistent with the results of the audit environmental matters for a range of
evidence gathered; and stakeholders;
e. draft suitable extracts for reports (for b. critically evaluate accounting policies
example any report to the management or choices and estimates, identifying issues
those charged with governance issued as of earnings manipulation and creative
part of the engagement). accounting; and
16 ASSURANCE ENGAGEMENTS c. critically appraise corporate reporting
policies, estimates and measurements for
a. explain the nature of a range of different
single entities and groups in the context of
assurance engagements;
an audit.
b. evaluate the evidence necessary to report at
the appropriate level of assurance; ETHICS
c. evaluate risk in relation to the nature of the Students will be able to identify and explain
assurance engagement and the entity or ethical issues. Where ethical dilemmas arise,
process for a given scenario; and they will be able to recommend, justify and
d. design and determine procedures necessary determine appropriate actions and ethical
to attain the relevant assurance objectives in safeguards to mitigate threats.
a potentially complex scenario.
In the assessment, students may be required, in
17 OTHER ENGAGEMENTS the context of corporate reporting and auditing,
to:
a. evaluate the role of internal audit and design
appropriate procedures to achieve the
19 ETHICS
planned objectives;
a. identify and explain ethical issues in
b. appraise and explain the nature and
reporting, assurance and business scenarios;
purposes of forensic audit and prepare and
plan procedures required to achieve a range b. explain the relevance, importance and
of differing objectives; consequences of ethical issues;
c. explain the roles and responsibilities that c. evaluate the impact of ethics on a reporting
auditors may have with respect to a variety entity, relating to the actions of stakeholders;
of different types of information and design d. recommend and justify appropriate actions
procedures sufficient to achieve agreed where ethical and professional conduct
objectives; and issues arise in a given scenario; and
d. explain the nature and purposes of due e. design and evaluate appropriate safeguards
diligence procedures (for example: financial, to mitigate threats and provide resolutions
commercial, operational, legal, tax, human to ethical problems.
resources) and plan procedures required

© ICAEW 2020 21
SKILLS ASSESSED

ASSIMILATING AND USING INFORMATION

Understand the situation and Identify and use relevant Identify and prioritise key
the requirements information issues and stay on task

• Demonstrate understanding • Interpret information • Identify business and

of the business context provided in various formats financial issues from a
• Identify and understand the • Evaluate the relevance of scenario
requirements information provided • Prioritise key issues
• Recognise new and complex • Use multiple information • Work effectively within time
ideas within a scenario sources constraints
• Identify the needs of • Filter information provided • Operate to a brief in a given
customers and clients to identify critical facts scenario
• Explain different stakeholder
perspectives and interests
• Identify risks within a
scenario
• Identify elements of
uncertainty within a scenario
• Identify ethical issues
including public interest and
sustainability issues within a
scenario

HOW SKILLS ARE ASSESSED:

students may be required to:
• have a detailed knowledge and understanding of relevant regulations in financial reporting,
auditing and ethics, which will need to be related to practical business scenarios and applied to any
data provided. The data provided will focus on technical compliance and understanding;
• respond to instructions from a line manager, a client request or from other senior personnel. The
requests may be specific, or they may be more general requiring interpretation and judgement to
be applied by the student;
• evaluate the quality and relevance of information provided in the context of a particular
assignment;
• evaluate inconsistencies in information provided from multiple sources;
• use different sources and types of evidence to confirm, or question, financial statement assertions
applying professional scepticism; and
• evaluate the ethical implications of making information available including confidentiality and
transparency.

22 ADVANCED LEVEL © ICAEW 2020

STRUCTURING PROBLEMS AND SOLUTIONS

Structure data Develop solutions

• Structure information from • Identify and apply relevant technical knowledge and skills to
various sources into suitable analyse a specific problem
formats for analysis • Use structured information to identify evidence-based solutions
• Identify any information gaps • Identify creative and pragmatic solutions in a business
• Frame questions to clarify environment
information • Identify opportunities to add value
• Use a range of data types • Identify and anticipate problems that may result from a
and sources to inform decision
analysis and decision making
• Identify a range of possible solutions based on analysis
• Structure and analyse
• Identify ethical dimensions of possible solutions
financial and non-
financial data to enhance • Select appropriate courses of action using an ethical framework
understanding of business • Identify the solution which is the best fit with acceptance
issues and their underlying criteria and objectives
causes • Define objectives and acceptance criteria for solutions
• Present analysis in
accordance with instructions
and criteria

HOW SKILLS ARE ASSESSED:

students may be required to:
• apply technical knowledge, analytical techniques and professional skills to resolve compliance and
business issues that arise in the context of the preparation and evaluation of corporate reports and
from providing audit services;
• structure problems and solutions in scenario based questions which may be presented in the
following forms:
– Mini case – in the context of auditing but with significant corporate reporting emphasis. This may
be technical, compliance or interpretive (for example including analytical procedures).
– Financial statement analysis – including technical aspects of corporate reporting.
– Technical question on aspects of audit and corporate reporting (which may include assurance,
internal audit).
• consider ethical problems in reporting, assurance and business scenarios;
• formulate, evaluate and implement accounting and reporting policies;
• measure and recognise assets and obligations on reported financial performance;
• consider the impact and interaction of applicable accounting principles, bases and standards;
• consider the appraisal of remuneration policies on reported performance; and
• evaluate reporting issues in relation to group scenarios and overseas activities.

© ICAEW 2020 23
APPLYING JUDGEMENT

Apply professional scepticism

Relate issues to the environment
and critical thinking

• Recognise bias and varying quality in data and • Appreciate when more expert help is required
evidence and always appropriately challenge and
• Identify faults in arguments critically review the expert’s work
• Identify gaps in evidence • Identify related issues in scenarios
• Identify inconsistencies and contradictory • Assess different stakeholder perspectives
information when evaluating options
• Assess interaction of information from • Appraise corporate responsibility and
different sources sustainability issues
• Exercise ethical judgement • Appraise the effects of alternative future
scenarios
• Appraise ethical, public interest and
regulatory issues

HOW SKILLS ARE ASSESSED:

students may be required to:
• use technical knowledge and professional judgement to identify, explain and evaluate alternatives
and to determine the appropriate solutions to compliance issues, giving due consideration to the
needs of clients and other stakeholders. The commercial context and impact of recommendations
and ethical issues will also need to be considered in making such judgements; and
• demonstrate judgement in the following ways:
– selecting between technical choices;
– filtering data to identify critical elements;
– prioritising information, issues or tasks;
– identifying omissions in the information;
– evaluating inconsistencies in information;
– distinguishing between the various qualities of the data provided;
– evaluating the impact of economic and political factors;
– evaluating the effects of known events;
– evaluating the appropriateness of accounting policy choice and estimation selection;
– evaluating options;
– comparing the effects of a range of estimates, outcomes or financial treatments;
– assessing the materiality of errors;
– exercising ethical judgement;
– identifying key linkages; and
– drawing appropriate conclusions from data provided to satisfy specified objectives and
assessing the materiality of errors and omissions.

24 ADVANCED LEVEL © ICAEW 2020

CONCLUDING, RECOMMENDING AND COMMUNICATING

Conclusions Recommendations Communication

• Apply technical knowledge • Present recommendations in • Present a basic or routine

to support reasoning and accordance with instructions memorandum or briefing
conclusions and defined criteria note in writing in a clear and
• Apply professional • Make recommendations in concise style
experience and evidence to situations where risks and • Present analysis and
support reasoning uncertainty exist recommendations in
• Use valid and different • Formulate opinions, advice, accordance with instructions
technical skills to formulate recommendations, plans, • Communicate clearly to a
opinions, advice, plans, solutions, options and specialist or non-specialist
solutions, options and reservations based on valid audience in a manner
reservations evidence suitable for the recipient
• Make evidence-based • Prepare the advice, report, or
recommendations which can notes required in a clear and
be justified by reference to concise style
supporting data and other
information
• Develop recommendations
which combine different
technical skills in a practical
situation

HOW SKILLS ARE ASSESSED:

students may be required to:
• draw conclusions from data, facts, calculations, judgments and own analysis;
• draw conclusions from complex assurance engagements;
• identify weaknesses in financial information systems and their potential consequences;
• distinguish between the qualities of data provided or other evidence generated;
• develop risk management solutions in an audit and corporate reporting environment;
• create report/memorandum in response to a specific technical issue and in accordance with client
requirements;
• draft reasoned, practicable advice that is clear and concise, supported by calculations or analysis of
technical/business issues identified;
• use judgement to select the most appropriate audit procedures in the context of risks identified;
• justify a specific recommended action when a variety of options are available; and
• explain the limitations of their conclusions or recommendations.

© ICAEW 2020 25
Strategic Business Management
MODULE AIM demonstrating an understanding of the
To enable students to demonstrate quantitative usefulness and limitations of accounting
and qualitative skills, in order to make realistic information in this context.
business recommendations in complex • appraise and explain the role of assurance in
scenarios. Business awareness will need to raising new equity and debt funding and in
be demonstrated at strategic, operating and the subsequent monitoring of such funding
transactional levels. arrangements; understand, explain and
evaluate the role of assurance in selecting
To achieve this aim, students will be required
and implementing key business decisions
to use technical knowledge and professional
including acquisitions and strategic
judgement to apply appropriate models and to
alliances; understand and explain the role
analyse quantitative and qualitative data from
of assurance in financial and business risk
multiple sources, including corporate reports,
management.
in order to evaluate alternatives and determine
appropriate solutions.
PRIOR KNOWLEDGE
On completion of this module, in a national This module assumes and develops the
or global context, and for a range of different knowledge and skills acquired in the Financial
business structures and industry scenarios, Accounting and Reporting module, the Business
students will be able to: Strategy and Technology module and the
• analyse and identify the external Financial Management module.
environment and internal strategic capability Background knowledge based upon the
of an entity; evaluate the consequences of strategic elements of the Business Planning:
strategic choices; recommend strategies to Taxation and the Audit and Assurance module
achieve stakeholder objectives, recommend will also be required in evaluating the business
appropriate methods of implementing and financial risks of reporting entities.
strategies and monitoring strategic
performance; manage business risks; and ETHICS
advise on corporate governance.
Ethical codes will be those issued by IESBA and
• identify and advise upon appropriate finance the ICAEW. The ethical implications will be at
requirements; evaluate financial risks facing both the organisational level and for individuals,
a business and advise upon appropriate particularly with respect to the accountant in
methods of measuring and managing those business.
risks; provide valuations for businesses and
securities; and advise upon investment and
distribution decisions.
METHOD OF ASSESSMENT
The Strategic Business Management module
• identify and explain ethical issues. Where
exam is 3.5 hours long. The exam will contain
ethical dilemmas arise, students will be able
questions requiring integration of knowledge
to recommend and justify and determine
and skills, including ethics. The exam will
appropriate actions and ethical safeguards
consist of two questions, and ethical issues and
to mitigate threats.
problems could appear in either question.
• interpret and apply corporate reporting
information in evaluating business The exam will be open book and will permit
and financial performance; recognise students to take any written or printed material
and explain the corporate reporting into the exam, subject to practical space
consequences of business and financial restrictions. To see the recommended text(s) for
decisions; apply corporate reporting this exam, go to icaew.com/permittedtexts.
information in appropriate models to
determine asset, equity and entity valuations,

26 ADVANCED LEVEL © ICAEW 2020

ETHICS AND PROFESSIONAL the syllabus will only by definition be valid if
SCEPTICISM they fulfil fundamental requirements of being
Ethical thinking must be at the forefront of the fair and just. This is guided by specific focus
strategic business awareness that students will across a range of considerations from social
be demonstrating. Students will be considering responsibility and sustainability to transparency.
notions of stakeholder impact and scope Professional scepticism will need to be
as well as appropriate safeguards within a evidenced in complex scenarios, recognising
specific learning outcome. Over and above bias and gaps in evidence.
this, recommendations relating throughout

SPECIFICATION GRID
The grid below shows the relative weightings of subjects within this module and should guide the
study time spent on each. Over time the marks available in the assessment will be within the ranges
of weightings below, while slight variations may occur in individual assessments to enable suitably
rigorous questions to be set.

SYLLABUS AREA WEIGHTING

Business Strategy and Management 30–40%

Financial Strategy
Financial Structure and Financial Reconstruction 25–35%
Financial Instruments and Financial Markets
Corporate Reporting 15–20%
Assurance 10%
Ethics 5–10%

BUSINESS STRATEGY AND c. identify and evaluate the significance of

MANAGEMENT the internal organisational and operational
Students will be able to analyse and identify capabilities in a given scenario which may
the external environment and internal strategic influence an entity’s ability to achieve its
capability of an entity; evaluate the consequences chosen strategic objectives, (including core
of strategic choices; recommend strategies to competencies, existing business processes,
achieve stakeholder objectives, recommend human capital and workforce flexibility);
appropriate methods of implementing strategies d. analyse and evaluate an entity’s current
and monitoring strategic performance; measure position and performance, from both a
and manage business risks; and advise on financial perspective and a non-financial
corporate governance. Students will also be perspective, using a variety of internal and
able to apply corporate reporting and assurance external information sources;
principles and practices in the context of key e. demonstrate how strategic analysis tools can
business decisions and events. be used in a complex scenario;
In the assessment, students may be required to: f. demonstrate how business strategy and
financial strategy can interrelate in a complex
1 STRATEGIC ANALYSIS scenario;
a. describe and explain the strategic objectives g. evaluate and advise upon the strategic
of an entity considering the interests of capability of an entity;
stakeholders; h. evaluate strategy at corporate, business unit
b. analyse and evaluate, for a given scenario, and operational levels; and
the external economic, market and industry i. analyse and evaluate current technology
environment which may impact upon a developments including those relating to
business’s performance and position; big data, internet of things, digital assets,
automation, intelligent systems, distributed

© ICAEW 2020 27
 ledger technology eg, blockchained e. evaluate, in a given scenario, the functional
cryptocurrencies. strategies necessary to achieve a business’s
overall strategy;
2 STRATEGIC CHOICE
f. develop business plans and proposals
a. assess, advise on and propose appropriate and advise on technical issues relating to
business strategies to meet stated business and organisational plans, assessing
objectives; the impact on historic and projected
b. identify and evaluate business unit strategies corporate reporting information;
to achieve sustainable competitive g. demonstrate an understanding of, and
advantage; provide advice on, data security issues,
c. explain and demonstrate how financial including cyber security issues, arising from
and non-financial data can be analysed in communications, shared systems and data
order to select an optimal business strategy, sharing throughout the supply chain and
including the impact of big data on business with strategy partners; and
models; h. identify and explain barriers to implementation
d. explain and demonstrate how strategic of digital strategy and make recommendations
business models can be used in a given as to how they may be overcome.
scenario, to identify factors that a business
can consider in choosing between 4 STRATEGIC PERFORMANCE MANAGEMENT
competing strategies; a. advise on, and develop, appropriate
e. explain international strategies; appraise performance management approaches for
international value chains and markets; businesses and business units, including the
including the concepts of globalisation use of data analytics;
and the borderless business; and show the b. explain and demonstrate how a business
impact on individual and group financial can analyse complex, quantitative and
statements of changes in foreign exchange qualitative data from multiple sources to
rates; and provide strategic management accounting
f. evaluate digital strategies, including the information to implement, monitor and
use of digital assets, automation, artificial modify a strategy at an appropriate
intelligence, cloud accounting and machine organisational level in order to create
learning. competitive advantage;
c. use financial and non-financial performance
3 STRATEGIC IMPLEMENTATION data from a variety of sources, including
a. demonstrate and explain the impact of integrated reporting disclosures, to measure
acquisitions and strategic alliances in multiple aspects of performance at a variety
implementing corporate strategy and of organisational levels;
evaluate the nature and role of assurance d. advise on, and develop, appropriate
procedures in selecting and monitoring such remuneration and reward packages for
strategies; staff and executives linked to performance,
b. evaluate and explain the relationship considering agency relationship issues; and
between business strategy and evaluate the impact on corporate reports
organisational structure; arising from employee remuneration,
c. explain and evaluate the nature and including pensions and share-based
methods of change management and advise payment; and
on the implementation of change in complex e. develop measures to evaluate performance
scenarios; in the context of social responsibility,
d. demonstrate and explain the techniques that sustainability, environmental matters, natural
may be used in implementing a strategy capital and climate change.
to reduce costs, for example supply
5 STRATEGIC MARKETING AND BRAND
chain management, business process
MANAGEMENT
re-engineering and outsourcing;
a. assess strategic marketing issues and
demonstrate the application of quantitative

28 ADVANCED LEVEL © ICAEW 2020

 and qualitative marketing techniques in f. evaluate and explain the limitations of
complex scenarios; business risk management; and
b. evaluate and analyse markets and the g. assess and explain enterprise risk
marketing environment and develop a management, evaluating its framework
marketing strategy consistent with the and its benefits; and analyse, structure
overall business strategy; and assimilate data provided to evaluate
c. explain, using information provided, how to business risks under a range of complex
position particular products and services in scenarios using statistical tools.
the market place (domestic or international)
7 CORPORATE GOVERNANCE
to maximise competitive advantage, and
assess the corporate reporting impact a. assess the nature of governance and the
arising from revenue and profit recognition explain the characteristics and principles of
in accordance; good governance in a variety of scenarios;
d. demonstrate, across a range of industries, b. assess the interests and impact of
how elements of the marketing mix can be organisational stakeholders in determining
used to promote competitive advantage; strategy and the consequences for
stakeholders of strategic choices;
e. develop and explain marketing strategies
using databases, big data and information c. evaluate the impact of governance
technology applications such as social media mechanisms on a range of stakeholders;
and other internet sources; d. assess and advise on appropriate corporate
f. develop and explain the strategies for governance mechanisms, and evaluate
managing and sustaining existing brands; stakeholder management;
g. prepare marketing strategies and show how e. analyse and evaluate the strengths and
they can be used to develop brands; and weaknesses of corporate governance
mechanisms and processes;
h. demonstrate how appraisal techniques
can be used for valuing brands, patents, f. explain the role of boards in determining
R&D projects and intellectual property and evaluating an entity’s policy for
and evaluate relevant corporate reporting social responsibility, sustainability and
recognition and measurement for Intangible environmental matters and advise on
Assets. corporate reporting disclosures relating to
these policies;
6 BUSINESS RISK MANAGEMENT g. evaluate the suitability of corporate
a. analyse and evaluate the key types of governance and organisational structures for
business risks using relevant quantitative and implementing strategy;
qualitative data and assess their implications h. explain the role of boards in monitoring
within a given scenario, for business strategy corporate performance and risk, and assess
and corporate reporting disclosures; the role of assurance procedures in this
b. advise on the risks involved in business context; and
and organisational plans and show how i. explain the nature, and assess the
these risks can be managed by assurance consequences, of the legal framework
procedures and other forms of risk within which businesses, assurance and
mitigation; governance systems operate (with particular
c. explain the responsibility of those charged reference to company law, fraud, money
with governance for managing risk laundering, civil liabilities, social security
and assess the role of assurance in risk law, employment law, contract law, tort and
mitigation; environmental law).
d. assess the impact of risk on a variety of
8 DATA ANALYSIS
stakeholders;
a. undertake appropriate quantitative and
e. explain and assess the various steps involved
qualitative data analysis, statistical analysis,
in constructing a business risk management
business analysis and financial statement
plan, by establishing context, identifying
analysis;
risks and the assessment and quantification
of risk; b. explain financial and operational data and

© ICAEW 2020 29
 other management information, drawing the context of developing an information
inferences relating to its completeness, strategy;
accuracy and credibility, as a basis for a e. assess financial and operational data and
meaningful analysis of the position, future information from management information
prospects and risks for a business; systems, drawing inferences relating to its
c. demonstrate how suitable financial, strategic completeness, accuracy and credibility,
and operational analysis techniques and provide an evaluation of assurance
can be used to analyse financial and procedures in evaluating information risks,
operational data and to evaluate business including those relating to cyber security;
position, prospects and risks, including the f. demonstrate and explain how businesses
analysis and benefits of ‘Big Data’, artificial capture, analyse and utilise information to
intelligence and machine learning; develop competitive advantage;
d. communicate an explanation (stating g. evaluate the impact of cloud computing and
any reservations regarding transparency the borderless business on the provision
and objectivity of data and information) of strategic management information,
of the position, prospects and risks of a including the use of cryptocurrencies;
business, based on analysis of financial and
h. explain and appraise corporate strategies for
operational data and information, including
ensuring security of data and preventions of
data analytics and assess the extent to which
attacks against data in the context of cyber
limited assurance and reasonable assurance
security; and
engagements can identify and mitigate
information risks in this context; i. explain the impact of regulations relating to
data security (eg GDPR) including the issues
e. apply professional scepticism to data
incurred in complying with such regulation.
sources and data capture in interpreting
quantitative and qualitative information; and 10 HUMAN RESOURCE MANAGEMENT
f. analyse, structure and assimilate data a. assess, explain and advise on the role
provided to evaluate performance using of human resource management in
relevant statistical tools. implementing strategy;
9 INFORMATION STRATEGY b. demonstrate and explain how human
resource management can contribute
a. outline proposals and advise on outline
to business strategy, including flexible
requirements for information technology
workforce management;
applications to support business strategy,
for example in the context of e-commerce, c. identify the impact of remuneration
e-business, virtual arrangements, artificial structures on organisational behaviour
intelligence, digital assets and cloud and other aspects of human resource
computing, including assurance issues in management, and show the corporate
relation to data security; reporting consequences; and
b. use management accounting information d. demonstrate and explain the role and impact
(for example, costs, prices, budgets, transfer of human resource management in change
prices) and management accounting tools management.
(for example, break-even, variances, limiting
factors, expected values, ABC, balanced FINANCIAL STRATEGY
scorecard) to evaluate short and long-term Students will be able to identify and advise upon
aspects of strategy; appropriate finance requirements; evaluate
c. explain and appraise how management financial risks facing a business and advise
information systems can provide relevant upon appropriate methods of managing and
quantitative and qualitative data to analyse quantifying those risks; provide valuations for
markets, industry and performance, businesses and securities; and advise upon
including the capture and analysis of big investment and distribution decisions. Students
data; will also be able to apply corporate reporting
and assurance principles and practices in the
d. demonstrate and explain methods for context of key financing decisions and events.
determining the value of information in
In the assessment, students may be required to:

30 ADVANCED LEVEL © ICAEW 2020

11 FINANCE AWARENESS e. determine the value of debt and explain the
a. demonstrate and explain the financing techniques used.
alternatives available for projects and
assets, and make informed choices as to FINANCIAL STRUCTURE AND
which alternative is the most compatible FINANCIAL RECONSTRUCTION
with the overall financial strategy of the
entity, showing the corporate reporting 13 CAPITAL STRUCTURE
consequences relating to presentation, a. appraise and evaluate the sources of finance
disclosure, recognition and measurement of and the process for raising finance;
projects and their financing; b. advise on and develop proposals for
b. assess and explain current and emerging determining the appropriate financing mix
issues in finance; for new businesses and projects;
c. identify social responsibility, sustainability c. explain and advise on issues relating to the
and environmental factors for a range cost of capital;
of financial stakeholders, including UN d. show and explain how dividend policy
sustainable development goals, natural impacts upon equity value and upon
capital and green finance, and assess financing and investment decisions; and
assurance and corporate reporting issues e. appraise and explain how the choice of
relating to such factors; financing impacts on reported corporate
d. explain how financial crises, which have performance, and on the recognition
occurred in the past over a long time period, and measurement of financial assets and
may impact on approaches and attitudes financial liabilities.
to financial risk and may inform corporate
reporting practice; and 14 FINANCIAL RECONSTRUCTION
e. explain the role and impact of the finance a. show and explain how financial
function as a business partner. reconstruction takes place and explain the
consequences of such reconstructions for
12 BUSINESS AND SECURITIES VALUATION corporate reporting;
a. explain, advise on and demonstrate b. appraise and evaluate financial
appropriate valuation methods for reconstruction proposals in a given scenario,
businesses and equity securities using: and determine the nature and role of
asset-based; adjusted earnings-based; and assurance procedures in this context;
cash-based methods (for example SVA, c. explain the different reasons for refinancing,
EVAR, VBM, MVA and other appropriate and demonstrate how companies in financial
techniques); distress can be managed, having regard to
b. critically appraise business and securities insolvency law;
valuation methods in the context of d. explain and appraise the workings of, and
specified complex scenarios, including the reasons for, securitisation, showing the
consideration of natural capital; impact on financial statement information;
c. explain and demonstrate appropriate e. explain and appraise the nature and
valuation techniques in the context of consequences of leveraged buy outs; and
acquisitions and mergers; assess the
f. appraise and evaluate various forms of
contribution of due diligence procedures;
reconstruction (for example, spin-off,
and show the impact on corporate reports
MBO, divestment, demergers, purchase of
arising from acquisitions for groups in
own shares, use of distributable profits),
consolidated financial statements;
explaining the corporate reporting impact.
d. explain and demonstrate appropriate
valuation techniques in the context of 15 SMALL AND MEDIUM COMPANY
demergers and for disposal of entities FINANCING
and business units, and show the impact a. appraise and explain the small and
on corporate reporting issues relating to medium-sized enterprise financing problem;
discontinued operations; and b. appraise and evaluate the various methods
of financing available to small and

© ICAEW 2020 31
 medium-sized enterprises, and explain the 18 DERIVATIVES
nature and role of assurance for small and a. explain the types of derivative securities
medium-sized companies in raising such and evaluate the implications for disclosure,
finance; and presentation, recognition and measurement
c. assess and explain the characteristics of in financial statements;
sources of equity for smaller companies and b. assess and explain the characteristics
the financial institutions operating in these of derivative markets and the financial
markets (for example, venture capital and institutions operating in these markets; and
private equity). c. appraise and evaluate the characteristics
of forwards, futures, options, swaps, credit
FINANCIAL INSTRUMENTS AND derivatives.
FINANCIAL MARKETS
19 FINANCIAL RISK MANAGEMENT
16 EQUITY INSTRUMENTS
a. analyse and evaluate financial risks and their
a. assess and explain the types of equity implications (for example financing, currency
securities, and evaluate the implications for and interest rate risks) and show the
disclosure, presentation, recognition and application of qualitative and quantitative
measurement in financial statements; risk disclosures for financial instruments
b. appraise and explain the characteristics of and other corporate reporting disclosures
equity markets and the financial institutions relevant to risk assessment;
operating in these markets; and b. appraise and advise on appropriate
c. analyse and evaluate the cost of equity, methods to assess, manage and quantify
portfolio theory and the use of appropriate financial risk in specific business scenarios;
asset pricing models, applying principles of c. explain and appraise financial instruments
financial economics. available for hedging against interest rate
and foreign exchange rate risk, for example,
17 FIXED INTEREST
swaps, collars and floors;
a. explain the types of fixed interest securities
d. demonstrate and explain the nature
and evaluate the implications for disclosure,
and operation of financial instruments
presentation, recognition and measurement
underlying the disclosure, recognition and
in financial statements;
measurement requirements in financial
b. appraise and explain the characteristics of statements; and
bond markets and the financial institutions
e. demonstrate and explain how interest rate
operating in these markets;
hedging strategies and foreign currency risk
c. appraise and evaluate the use of bonds/ management strategies can be formulated,
loans as a method of finance, and explain both at the level of the individual transaction
the implications of terms included in loan and for macro hedging arrangements.
agreements in a given scenario (for example,
covenants and guarantees) and the explain 20 INTERNATIONAL FINANCIAL MANAGEMENT
the procedures by which monitoring and a. explain and appraise the various methods of
assurance can be provided in respect of financing available for foreign investments
such agreements; and evaluate the implications for disclosure,
d. explain and appraise bond valuation presentation, recognition and measurement
techniques and assess flat and gross of changes in foreign exchange rates in
redemption yields; financial statements;
e. explain and appraise yield curves, sensitivity b. appraise and explain global treasury
to yield and components of the yield; organisation and international liquidity
f. evaluate and explain interest rate risk; and management;
g. appraise and evaluate credit risk and credit c. appraise and evaluate the factors affecting
spread. the capital structure of a multinational
company;

32 ADVANCED LEVEL © ICAEW 2020

d. explain and appraise the advantages 22 TREASURY AND WORKING CAPITAL
and risks associated with international MANAGEMENT
borrowing; a. demonstrate and explain the role and
e. demonstrate and explain the risks associated responsibilities of the treasury management
with international trade and the ways in function;
which these risks can be managed, and b. demonstrate and explain the role of treasury
assess the nature and role of assurance management in short-term finance, short-
procedures in mitigating risk and the term investment and liquidity risk;
financial reporting consequences of c. appraise and evaluate the contribution of
currency hedging; working capital management to short term
f. appraise and evaluate the different methods and long term financing;
open to multinationals wishing to set d. evaluate the risks arising from working
up foreign operations and the choices capital management and how these may be
of finance available, identifying tax and mitigated;
corporate reporting consequences;
e. evaluate and explain working capital
g. assess and explain the impact of exchange requirements for a range of different
controls and how companies can overcome organisations and circumstances;
the effects of these controls;
f. demonstrate and explain the nature and
h. appraise and evaluate the management of role of working capital management within
dividends in multinational organisations; and financial management; and
i. appraise and evaluate the management of g. appraise, evaluate and advise with respect to
transfer prices in multinational organisations working capital management techniques.
and the implications for reported profit and
tax. 23 ETHICS
In the assessment, students may be required to:
21 INVESTMENT APPRAISAL
a. select and advise on investment appraisal a. recognise and explain ethical and
techniques which are appropriate to the professional conduct issues;
objectives and circumstances of a given b. explain the relevance, importance and
business; consequences of ethical issues;
b. appraise and advise on appropriate c. evaluate the impact of ethics on an entity, its
measures of return and risk for assessing stakeholders and the scope of its strategies
business projects; and operations;
c. demonstrate and evaluate investment d. recommend and justify appropriate actions
appraisal techniques for international where ethical dilemmas arise in a given
projects, identifying the impact of tax and scenario; and
the effects on corporate reporting; e. design and evaluate appropriate ethical
d. explain and appraise real options and safeguards.
determine the impact of options to abandon,
expand, delay and redeploy;
e. appraise and evaluate the quantitative and
qualitative issues surrounding international
investment appraisal;
f. evaluate the impact of externalities when
making investment appraisal decisions; and
g. identify social responsibility, sustainability
and environmental consequences of
investment decisions, explaining corporate
reporting issues in relation to such policies.

© ICAEW 2020 33
SKILLS ASSESSED

ASSIMILATING AND USING INFORMATION

Understand the situation and Identify and use relevant Identify and prioritise key
the requirements information issues and stay on task

• Demonstrate understanding • Interpret information • Identify business and

of the business context provided in various formats financial issues from a
• Identify and understand the • Evaluate the relevance of scenario
requirements information provided • Prioritise key issues
• Recognise new and complex • Filter information provided • Work effectively within time
ideas within a scenario to identify critical facts constraints
• Identify the needs of • Operate to a brief in a given
customers and clients scenario
• Explain different stakeholder
perspectives and interests
• Identify risks within a scenario
• Identify elements of
uncertainty within a scenario
• Identify ethical issues
including public interest and
sustainability issues within a
scenario

HOW SKILLS ARE ASSESSED:

students may be required to:
• draw conclusions in the following ways:
– from data, facts, calculations, judgments and own analysis;
– on complex assurance engagements;
– by identifying weaknesses in financial information systems and their potential consequences;
– by distinguishing between the qualities of data provided or other evidence generated; and
– by developing risk management solutions in an audit and corporate reporting environment.
• present and communicate their recommendations in the following ways:
– from using a report/memorandum in response to a specific technical issue and in accordance
with client requirements;
– by using reasoned, practicable advice that is clear and concise, supported by calculations or
analysis of technical/business issues identified;
– by using judgement to select the most appropriate audit procedures in the context of risks
identified; and
– by justifying a specific recommended action when a variety of options are available.
• explain the limitations of their conclusions or recommendations.

34 ADVANCED LEVEL © ICAEW 2020

STRUCTURING PROBLEMS AND SOLUTIONS

Structure data Develop solutions

• Structure information from • Identify and apply relevant technical knowledge and skills to
various sources into suitable analyse a specific problem
formats for analysis • Use structured information to identify evidence-based solutions
• Identify any information gaps • Identify creative and pragmatic solutions in a business
• Frame questions to clarify environment
information • Identify opportunities to add value
• Use a range of data types • Identify and anticipate problems that may result from a
and sources to inform decision
analysis and decision making
• Identify a range of possible solutions based on analysis
• Structure and analyse
• Identify ethical dimensions of possible solutions
financial and non-
financial data to enhance • Select appropriate courses of action using an ethical framework
understanding of business • Identify the solution which is the best fit with acceptance
issues and their underlying criteria and objectives
causes • Define objectives and acceptance criteria for solutions
• Present analysis in
accordance with instructions
and criteria

HOW SKILLS ARE ASSESSED:

students may be required to:
• Business management
– Undertake a critical assessment of key business issues.
– Structure market data and industry data from various sources.
– Explain and evaluating the strengths and weaknesses of an organisation or segments of an
organisation.
– Evaluate the impact of decisions on business strategy.
– Evaluate the impact of financial strategy on business strategy.
• Finance
– Undertake valuations, where the information is incomplete, suspect or unsuitable.
– Undertake financial risk analysis and considering the management of financial risks.
– Evaluate the impact of business strategy on financial strategy.
• Corporate reporting
– Consider relevance and reliability of unstructured information.
– Evaluate the impact and legitimacy of a range of financial reporting treatments.
– Deal with complex financial reporting information.
– Impact of future events on financial statements.
– Impact on financial statements of delaying or modifying business and financial decisions.
– Evaluate business position, prospects and risks.
• Assurance
– Understand business and inherent risks in complex scenarios.
– Evaluate the control environment.
– Undertake selective financial analysis.

© ICAEW 2020 35
 – Evaluate risk and control evaluation in the context of IT.
– Undertake assurance to support specific transactions (eg, due diligence).
– Apply professional scepticism.
• Ethics
– Identify ethical problems in complex scenarios and structuring appropriate actions.

APPLYING JUDGEMENT

Apply professional scepticism

Relate issues to the environment
and critical thinking

• Recognise bias and varying quality in data and • Recognise bias and varying quality in data and
evidence evidence
• Identify faults in arguments • Identify faults in arguments
• Identify gaps in evidence • Identify gaps in evidence
• Identify inconsistencies and contradictory • Identify inconsistencies and contradictory
information information
• Assess interaction of information from • Assess interaction of information from
different sources different sources
• Exercise ethical judgement • Exercise ethical judgement

HOW SKILLS ARE ASSESSED:

students may be required to:
• drawing of inferences and conclusions from prior qualitative and quantitative analysis, and other
information, in order to solve problems and developing a solution, or alternative solutions;
• select between technical choices;
• filter data to identify critical elements;
• prioritise information, issues or tasks;
• identify omissions in the information provided;
• evaluate inconsistencies in information;
• distinguish between the various qualities of the data provided;
• evaluate the impact of business, financial and economic factors;
• evaluate the effects of future events;
• evaluate the appropriateness of accounting policy and estimation selection;
• compare the effects of a range of estimates, outcomes or financial treatments;
• exercise ethical judgement;
• identify key linkages; and
• draw appropriate conclusions from data provided to satisfy specified objectives and assessing the
materiality of errors and omissions.

36 ADVANCED LEVEL © ICAEW 2020

CONCLUDING, RECOMMENDING AND COMMUNICATING

Conclusions Recommendations Communication

• Apply technical knowledge • Present recommendations in • Present a basic or routine

to support reasoning and accordance with instructions memorandum or briefing
conclusions and defined criteria note in writing in a clear and
• Apply professional • Make recommendations in concise style
experience and evidence to situations where risks and • Present analysis and
support reasoning uncertainty exist recommendations in
• Use valid and different • Formulate opinions, advice, accordance with instructions
technical skills to formulate recommendations, plans, • Communicate clearly to a
opinions, advice, plans, solutions, options and specialist or non-specialist
solutions, options and reservations based on valid audience in a manner
reservations evidence suitable for the recipient
• Make evidence-based • Prepare the advice, report, or
recommendations which can notes required in a clear and
be justified by reference to concise style
supporting data and other
information
• Develop recommendations
which combine different
technical skills in a practical
situation

HOW SKILLS ARE ASSESSED:

students may be required to:
• draw conclusions from data, facts, calculations, judgements and own analysis;
• draw conclusions on complex assurance engagements;
• draw conclusions by identify weaknesses in financial information systems and their potential
consequences;
• draw conclusions by distinguishing between the qualities of data provided or other evidence
generated;
• draw conclusions by developing risk management solutions;
• draw conclusions by making strategic decisions;
• draw conclusions by valuing a company or a financial instrument;
• present a report/memorandum in response to a specific technical or business issue and in
accordance with client requirements;
• present reasoned, practicable advice that is clear and concise, supported by calculations or analysis
of technical or business issues identified; and
• justify a specific recommended action when a variety of options are available.

© ICAEW 2020 37
Case Study
MODULE AIM rigour and principles. Professional scepticism
To ensure that students can provide advice on will be an underlying requirement within the
complex business issues in the form of a written complex scenarios that the Case Study presents.
report. It must be applied being mindful of provenance
and recognising the potential for bias.
The objective of the Case Study is to assess
students’ understanding of complex business
PREPARATION AND APPROACH TO
issues and the ability to analyse financial and
non-financial data, exercise professional and
THE CASE
ethical judgement, and develop conclusions and The Case Study is designed to reproduce a
recommendations. typical situation in which ICAEW Chartered
Accountants find themselves. This will involve
CASE STUDY FORMAT using information arising from meetings and
communicated in memoranda, letters or reports
The Case Study scenario may be based on from a variety of business and professional
any one of a variety of different organisational advisors and stakeholders. The situation will
structures or operations. Students will be generally relate to a business plan or transaction
provided with background details (‘Advance and will require preparation for the submission
Information’) on the organisation and its of a report.
business environment ahead of the exam.
The reality of such situations is that in drafting a
This information will not give specific indication report you would:
of the eventual requirements of the Case
Study. Students will be expected to familiarise • receive some materials in advance;
themselves with the information provided about • carry out some work beforehand and make
the organisation and the industry in which it use of it in the report;
operates, by undertaking details analysis of • include additional analysis in appendices to
that Advance Information and some additional the report;
analysis and research where necessary. Students
• develop additional lines of enquiry as you
may take the results of their work into the exam.
assemble the report; and
• expect to discuss and advise on relevant
METHOD OF ASSESSMENT
matters.
The Case Study module exam is 4 hours long.
The limited class time available with a tutor, even
The Case Study will not require the detailed
when supplemented by extensive home study,
computations needed for the Certificate,
is insufficient for success in the Case Study.
Professional and Advanced Levels; but students
Students must bring work experience into their
will be required to undertake financial and
preparation and development programme.
business analysis.
Success at the Case Study requires an
Requirements will be open in that there will be
integration of the technical knowledge and skills
no predetermined correct answers to the Case
acquired from all of the ACA modules, namely:
Study. All areas of the syllabus may be tested
over time. • the core technical knowledge and skills
and practical application acquired at the
ETHICS AND PROFESSIONAL Certificate and Professional levels;
SCEPTICISM • the technical, analytical, evaluative and
Ethics and business trust is ingrained throughout integration skills from Corporate Reporting
the Case Study material. Analysis of the skills and Strategic Business Management; and
assessed that follows shows that candidates are • the advisory, judgemental and
required both to identify and evaluate ethical communication skills acquired through
issues and dimensions. Recommendations will practical work experience undertaken during
necessarily only be valid if they satisfy the same the training agreement.

38 ADVANCED LEVEL © ICAEW 2020

SKILLS ASSESSED

ASSIMILATING AND USING INFORMATION

Understand the situation and Identify and use relevant Identify and prioritise key
the requirements information issues and stay on task

• Demonstrate understanding • Interpret information • Identify business and

of the business context provided in various formats financial issues from a
• Identify and understand the • Evaluate the relevance of scenario
requirements information provided • Prioritise key issues
• Recognise new and complex • Use multiple information • Work effectively within time
ideas within a scenario sources constraints
• Identify the needs of • Filter information provided • Operate to a brief in a given
customers and clients to identify critical facts scenario
• Explain different stakeholder
perspectives and interests
• Identify risks within a
scenario
• Identify elements of
uncertainty within a scenario
• Identify ethical issues
including public interest and
sustainability issues within a
scenario

HOW SKILLS ARE ASSESSED:

students may be required to:
• use the Advance Information, exam paper, knowledge of ethical codes and professional experience
to define the specific issue/situation;
• identify and use the key financial figures from the Advance Information and exam paper;
• use their own understanding of context and relevant findings from their own research;
• describe the wider context in which the business operates;
• identify relevant business issues showing:
– understanding of a business entity
– understanding of its position in the industry sector;
• recognise where a business is in its life cycle;
• identify any important parameters affecting an issue (eg, competitors, loss of clients); and
• demonstrate an awareness of ethical and business trust issues and situations.

© ICAEW 2020 39
STRUCTURING PROBLEMS AND SOLUTIONS

Structure data Develop solutions

• Structure information from • Identify and apply relevant technical knowledge and skills to
various sources into suitable analyse a specific problem
formats for analysis • Use structured information to identify evidence-based solutions
• Identify any information gaps • Identify creative and pragmatic solutions in a business
• Frame questions to clarify environment
information • Identify opportunities to add value
• Use a range of data types • Identify and anticipate problems that may result from a
and sources to inform decision
analysis and decision making
• Identify a range of possible solutions based on analysis
• Structure and analyse
• Identify ethical dimensions of possible solutions
financial and non-
financial data to enhance • Select appropriate courses of action using an ethical framework
understanding of business • Define objectives and acceptance criteria for solutions
issues and their underlying • Identify the solution which is the best fit with acceptance
causes criteria and objectives
• Present analysis in
accordance with instructions
and criteria

HOW SKILLS ARE ASSESSED:

students may be required to:
• identify and use key information;
• demonstrate technical knowledge;
• use professional experience;
• use relevant strategic analytical tools (SWOT, PESTLE, Porter’s five forces);
• perform relevant analysis;
• produce quality analysis showing:
– depth
– breadth
– logic
– reasonableness;
• use knowledge of ethical codes and professional experience to perform relevant analysis; and
• assess issues of business trust.

Financial statement analysis:

• use appropriate analytical tools on information and data provided in the Advance Information and
exam paper to measure financial performance, identify trends and make comparisons;
• perform relevant analysis on:
– financial statements
– other information;
• make specific adjustments to align equivalent financial information for different factors;
• assess the causes and effects of both financial and non-financial factors on the business;
• assess the effect of external factors on business activities and financial results; and
• integrate numbers and words.

40 ADVANCED LEVEL © ICAEW 2020

Financial data analysis:
• prepare and explain relevant calculations based on financial information provided in the Advance
Information and exam paper;
• use appropriate analytical tools (eg, valuation methodologies);
• perform relevant analysis on:
– numerical data
– other information;
• determine specific outcomes from financial and non-financial information provided;
• comment on assumptions provided;
• consider and calculate possible alternative outcomes (flexing numbers, sensitivity analysis); and
• integrate numbers and words.

APPLYING JUDGEMENT

Apply professional scepticism

Relate issues to the environment
and critical thinking

• Recognise bias and varying quality in data and • Appreciate when more expert help is
evidence required, but reviewing and challenging their
• Identify faults in arguments work where appropriate
• Identify gaps in evidence • Identify related issues in scenarios
• Identify inconsistencies and contradictory • Assess different stakeholder perspectives
information when evaluating options
• Assess interaction of information from • Retain an overview of the business issue or
different sources scenario
• Exercise ethical judgement • Appraise corporate responsibility and
sustainability issues
• Appraise the effects of alternative future
scenarios
• Appraise ethical, public interest and
regulatory issues

HOW SKILLS ARE ASSESSED:

students may be required to:
• evaluate and build on implications of financial or strategic analysis or calculations;
• identify and use key financial information;
• recognise linkages;
• recognise gaps or shortcomings in the information provided;
• select and evaluate key points, such as strengths and weaknesses of a business proposal;
• question and evaluate the adequacy of any assumptions and quality of information provided;
• explain own assumptions;
• discuss output, such as pros/cons;
• demonstrate professional scepticism;
• demonstrate objectivity/balance;
• demonstrate an appreciation of more than one side/bias;
• evaluate and balance options;

© ICAEW 2020 41
• prioritise key points;
• assess weaknesses in decisions;
• reflect on the underlying analysis performed and what it means for the organisation;
• use knowledge of ethical codes and professional experience;
• identify risks and ethical issues within, and derived from, the scenario;
• identify key ethical issues for an accountant undertaking work in accounting, finance and assurance; and
• evaluate any specific business trust points relating to the issue under review.

CONCLUDING, RECOMMENDING AND COMMUNICATING

Conclusions Recommendations Communication

• Apply technical knowledge • Present recommendations in • Present analysis and

to support reasoning and accordance with instructions recommendations in
conclusions and defined criteria accordance with instructions
• Apply professional • Make recommendations in • Communicate clearly to a
experience and evidence to situations where risks and specialist or non-specialist
support reasoning uncertainty exist audience in a manner
• Use valid and different • Formulate opinions, advice, suitable for the recipient
technical skills to formulate recommendations, plans, • Prepare the advice, report, or
opinions, advice, plans, solutions, options and notes required in a clear and
solutions, options and reservations based on valid concise style
reservations evidence
• Make evidence-based
recommendations which can
be justified by reference to
supporting data and other
information
• Develop recommendations
which combine different
technical skills in a practical
situation

HOW SKILLS ARE ASSESSED:

students may be required to:
• draw conclusions, make recommendations and reach decisions based on their foregoing work and
relevant to the organisation as described in the business scenario;
• draw conclusions that:
– are realistic;
– flow from the analytical work and evaluation previously conducted;
– include the impact of any assumptions and any sensitivity analysis;
– form an opinion on the validity of information sources; and
– conclude on ethical issues.
• offer clear, practical, and commercial advice and recommendations that:
– follow logically from the analytical work, evaluations and conclusions;
– are backed up by reasoned argument;
– are realistic;

42 ADVANCED LEVEL © ICAEW 2020

 – help to improve the situation or mitigate any problems or uncertainties identified within the
context of the business scenario and wider context;
– lie within the range of current business activity;
– identify any significant positive points or areas of concern relating to any decision(s) reached;
– identify any financial implications of action (or no action);
– identify additional work needed to support the decision(s);
– identify the next steps that the client should take to progress or reject an issue;
– identify where any specific additional advice may be required; and
– resolve any identified ethical dilemmas or issues of business trust.

© ICAEW 2020 43
Technical knowledge
The tables contained in this section show the technical knowledge in the disciplines of financial
reporting, audit and assurance, business analysis, ethics and taxation covered in the ACA syllabus by
module.
For each individual standard the level of knowledge required in the relevant Certificate and
Professional Level module and at the Advanced Level is shown.
The knowledge levels are defined as follows:

LEVEL D
An awareness of the scope of the standard.

LEVEL C
A general knowledge with a basic understanding of the subject matter and training in its application
thereof sufficient to identify significant issues and evaluate their potential implications or impact.

LEVEL B
A working knowledge with a broad understanding of the subject matter and a level of experience in
the application thereof sufficient to apply the subject matter in straightforward circumstances.

LEVEL A
A thorough knowledge with a solid understanding of the subject matter and experience in the
application thereof sufficient to exercise reasonable professional judgement in the application of the
subject matter in those circumstances generally encountered by chartered accountants.

KEY TO OTHER SYMBOLS:

→ The knowledge level reached is assumed to be continued

44 TECHNICAL KNOWLEDGE © ICAEW 2020

Assurance and Audit
AUDIT AND ADVANCED
TOPIC ASSURANCE
ASSURANCE LEVEL

The International Auditing and Assurance Standards Board D C

The Authority Attaching to Standards Issued by the International Auditing and
C A
Assurance Standards Board
The Authority Attaching to Practice Statements Issued by the International
A
Auditing and Assurance Standards Board
Discussion Papers C
Working Procedures C
International Standards on Auditing (UK)
200 (Revised June 2016) (Updated January 2020) Overall Objectives of
the Independent Auditor and the Conduct of an Audit in Accordance with B A →
International Standards on Auditing (UK)
210 (Revised June 2016) (Updated July 2017) Agreeing the Terms of Audit
B →
Engagements
220 (Revised November 2019) Quality Control for an Audit of Financial
B →
Statements
230 (Revised June 2016) (Updated January 2020) Audit Documentation C B A
240 (Revised June 2016) (Updated January 2020) The Auditor’s
C B A
Responsibilities Relating to Fraud in an Audit of Financial Statements
250 A (Revised November 2019) Consideration of Laws and Regulations in an
B A
Audit of Financial Statements
250 B (Revised November 2019) The Auditor’s Statutory Right and Duty to
Report to Regulators of Public Interest Entities and Regulators of Other Entities C
in the Financial Sector
260 (Revised November 2019) (Updated January 2020) Communication with
B A
Those Charged with Governance
265 Communicating Deficiencies in Internal Control to Those Charged with
B A
Governance and Management
300 (Revised June 2016) Planning an Audit of Financial Statements B A →
315 (Revised June 2016) Identifying and Assessing the Risks of Material
B A →
Misstatement Through Understanding of the Entity and its Environment
320 (Revised June 2016) Materiality in Planning and Performing an Audit C A →
330 (Revised July 2017) The Auditor’s Responses to Assessed Risks C B A
402 Audit Considerations Relating to an Entity Using a Service Organisation C B
450 (Revised June 2016) (Updated July 2017) Evaluation of Misstatements
C A
Identified during the Audit
500 (Updated January 2020) Audit Evidence B A →
501 Audit Evidence – Specific Considerations for Selected Items B A
505 (Updated July 2017) External Confirmations B B A
510 (Revised June 2016) Initial Audit Engagements - Opening Balances C B A
520 Analytical Procedures B A A
530 Audit Sampling B B A
540 (Revised December 2018) Auditing Accounting Estimates, and Related
C B A
Disclosures
550 Related Parties C B A
560 Subsequent Events B A
570 (Revised September 2019) Going Concern A →
580 Written Representations (Updated January 2020) C B A
600 (Revised November 2019) Special Considerations – Audits of Group
C A
Financial Statements (including the Work of Component Auditors)

© ICAEW 2020 45
 AUDIT AND ADVANCED
TOPIC ASSURANCE
ASSURANCE LEVEL

610 (Revised June 2013) Using the Work of Internal Auditors C B A

620 (Revised November 2019) Using the Work of an Auditor’s Expert B A
700 (Revised January 2020) Forming an Opinion and Reporting on Financial
B A →
Statements
701 (Revised January 2020) Communicating Key Audit Matters in the
B A
Independent Auditor’s Report
705 (Revised June 2016) Modifications to the Opinion in the Independent
A →
Auditor’s Report
706 (Revised June 2016) Emphasis of Matter Paragraphs and Other Matter
A →
Paragraphs in the Independent Auditor’s Report
710 Comparative Information – Corresponding Figures and Comparative
B A
Financial Statements
720 (Revised November 2019) The Auditor’s Responsibility Relating to Other
B A
Information
800 (Revised) Special Considerations – Audits of Financial Statements
B A
prepared in Accordance with Special Purpose Frameworks
805 (Revised) Special Considerations – Audits of Single Financial Statements
B A
and Specific Elements, Accounts or items of a Financial Statement
International Standards on Auditing
810 (Revised) Engagements to Report on Summary Financial Statements B
International Auditing Practice Note (IAPN)
1000 Special Considerations in Auditing Financial Instruments B
International Standards on Review Engagements (ISREs)
2400 (Revised) Engagements to Review Historical Financial Statements C B
International Standards on Review Engagements (UK & Ireland)
2410 Review of Interim Financial Information Performed by the Independent
C B
Auditor of the Entity
International Standards on Assurance Engagements (ISAEs)
3000 (Revised) Assurance Engagements Other than Audits or Reviews of
C B
Historical Financial Information
3400 The Examination of Prospective Financial Information C A
3402 Assurance Reports on Controls at a Service Organisation C B
3410 Assurance Engagements on Greenhouse Gas Statements C →
International Standards on Related Services (ISRSs)
4400 Engagements to Perform Agreed-upon Procedures Regarding Financial
B
Information
4410 (Revised) Compilation Engagements B
Other Standards
ISQC (UK)1 (Revised November 2019) Quality Control for Firms that Perform
Audits and Reviews of Financial Statements, and Other Assurance and Related C B
Services Engagements
Other Guidance
Bulletin (October 2016): Compendium of Illustrative Auditor’s Reports on
United Kingdom Private Sector Financial Statements for periods commencing B B
on or after 17 June 2016
FRC Briefing Paper
Professional Scepticism – establishing a common understanding and B B
reaffirming its central role in delivering audit quality

46 TECHNICAL KNOWLEDGE © ICAEW 2020

Business Analysis
CERTIFICATE AND PROFESSIONAL LEVELS

BUSINESS ADVANCED
TOPIC BUSINESS, LEVEL
MANAGEMENT FINANCIAL STRATEGY
TECHNOLOGY
INFORMATION MANAGEMENT AND
AND FINANCE
TECHNOLOGY

STRATEGIC ANALYSIS
Environmental and market analysis tools
PESTEL analysis C A →
Porter’s five forces C A →
Product life cycle C A →
Boston consulting group matrix C A →
Prices and markets C A →
Competitor analysis C A →
Positional and other analysis tools
Resource audit C A →
Resource-based strategy C A →
Value chain analysis C A →
SWOT analysis C A →
Gap analysis C A →
Marketing analysis C A →
Competitive advantage C A →
Benchmarking C A →
Directional policy matrix B
Business process analysis B A
Strategic risk analysis A →
Balanced scorecard C A →
STRATEGIC CHOICE
Strategy formulation, evaluation and
C A →
choice
Business risk management C A →
Financial analysis and data analysis A →
Stakeholder analysis C A →
Objectives and stakeholders’
C A →
preferences
Corporate responsibility, sustainability
C B A
and climate change
STRATEGIC IMPLEMENTATION
Business plans C A →
Organisational structure C A →
Information management C B A
Change management A →
Project management A
BUSINESS MANAGEMENT
Performance management C A
Strategic marketing and brand
B A
management
Corporate governance C B A
Information strategy B A
Human resource management C B

© ICAEW 2020 47
 CERTIFICATE AND PROFESSIONAL LEVELS

BUSINESS ADVANCED
TOPIC BUSINESS, LEVEL
MANAGEMENT FINANCIAL STRATEGY
TECHNOLOGY
INFORMATION MANAGEMENT AND
AND FINANCE
TECHNOLOGY

COST ANALYSIS FOR DECISION MAKING

Costing
Cost classification A → →
Costing systems – direct, marginal,
B → →
absorption
Activity based costing (ABC) C → B
Break even analysis B → A
Multi-product break even analysis B
Budgeting and performance
B → A
management
Pricing
Pricing decisions B A →
Transfer pricing B A →
Decision making techniques
Expected values B A
Relevant cash flows B A
Sensitivity analysis B A
BUSINESS AND SHAREHOLDER VALUE
Valuation Techniques
Income – dividend yield B A
Income – P/E B A
Income – discounted cash flow B A
Asset based measures B A
Options approach B
Shareholder value
Value based management (VBM) B
Value drivers B A
Shareholder value analysis (SVA) B A
Short and long term growth rates and
A
terminal values
Economic profit A
Cash flow return on investment (CFROI) A
Total shareholder return (TSR) A
Market value added (MVA) A
INVESTMENT APPRAISAL AND RISK ANALYSIS
Project appraisal
NPV B A →
IRR B A →
Payback B A →
Relevant cash flows A →
Tax and inflation A →
Replacement analysis A →
Capital rationing A →
Adjusted present value (APV) A →

48 TECHNICAL KNOWLEDGE © ICAEW 2020

 CERTIFICATE AND PROFESSIONAL LEVELS

BUSINESS ADVANCED
TOPIC BUSINESS, LEVEL
MANAGEMENT FINANCIAL STRATEGY
TECHNOLOGY
INFORMATION MANAGEMENT AND
AND FINANCE
TECHNOLOGY

Assessing risk
Project appraisal and sensitivity analysis B A
Project appraisal and simulation B A
Expected values B A
Scenario planning A
Gap analysis B →
Continuous vs event risk B →
FINANCIAL ANALYSIS
Cost of capital
Cost of equity B A
Cost of debt B A
Cost of preference shares B A
Cost of bank loans B A
Weighted average cost of capital
B A
(WACC)
Effective interest rates A
Splitting convertibles into equity and
A
debt elements
Equity instruments A
Portfolio theory and CAPM
Portfolio theory B A
CAPM B A
APT and MCPM A
CAPM and cost of capital B A
International cost of capital A
Bonds and fixed interest securities
Bond pricing using NPV A
Yields to maturity A
Duration and price volatility A
Convexity A
Term structure of interest rates A
Corporate borrowing and default risk A
SOURCES OF FINANCE AND FINANCING ARRANGEMENTS
Short, medium and long term sources
C A
of finance
Green finance C B A
Loan agreement conditions (warranties;
B A
covenants; guarantees)
Raising capital C A
Gearing and capital structure A →
Loan agreements and covenants A →
Dividend policy A →
Financing reconstructions (eg, group
reconstruction, spin off, purchase of B A
own shares, use of distributable profits)

© ICAEW 2020 49
 CERTIFICATE AND PROFESSIONAL LEVELS

BUSINESS ADVANCED
TOPIC BUSINESS, LEVEL
MANAGEMENT FINANCIAL STRATEGY
TECHNOLOGY
INFORMATION MANAGEMENT AND
AND FINANCE
TECHNOLOGY

Treasury and working capital

C A
management
Small and medium company financing B
History of finance C
FINANCIAL ENGINEERING
Futures, options and swaps
Options B A
Interest rate futures B A
Interest rate options B A
Interest forward rate agreements (FRAs) B A
Interest rate swaps B A
Foreign exchange
Currency forward contracts B A
Currency money market cover B A
Currency options B A
Currency swaps B A
Operational techniques for managing
B A
currency risk
Theoretical determinants of foreign
B A
exchange rates
Option value
Value of a call and put option C B
Black Scholes option pricing model B
Binomial option pricing model B
Real options C B

50 TECHNICAL KNOWLEDGE © ICAEW 2020

Ethics Codes and Standards
ETHICS CODES AND STANDARDS LEVEL MODULES

IESBA Code of Ethics for Professional Accountants Certificate Level

(parts A, B and C and Definitions) C/D Accounting
B Assurance
ICAEW Code of Ethics C/D Business, Technology and Finance
D Law
C Management Information
C Principles of Taxation

Professional Level
A Audit and Assurance
B Business Strategy and Technology
B Financial Accounting and Reporting
B/C Financial Management
B Tax Compliance
B Business Planning

Advanced Level
A Corporate Reporting
A Strategic Business Management
A Case Study

FRC Revised Ethical Standard (December 2019) B Assurance

A Audit and Assurance

Advanced Level
A Corporate Reporting
A Strategic Business Management
A Case Study

© ICAEW 2020 51
Financial Reporting – IFRS
CERTIFICATE AND ADVANCED
PROFESSIONAL LEVEL LEVEL

TOPIC FINANCIAL
ACCOUNTING CORPORATE
ACCOUNTING
AND REPORTING
REPORTING

Preface to International Financial Reporting Standards A A

Conceptual Framework for Financial Reporting (Note 1) B A A
IAS 1, Presentation of Financial Statements A A A
IAS 2, Inventories B A A
IAS 7, Statement of Cash Flows B A A
IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors B A A
IAS 10, Events after the Reporting Period A A
IAS 12, Income Taxes C A
IAS 16, Property, Plant and Equipment B A A
IAS 19, Employee Benefits - A
IAS 20, Accounting for Government Grants and Disclosure of
A A
Government Assistance
IAS 21, The Effects of Changes in Foreign Exchange Rates C A
IAS 23, Borrowing Costs A A
IAS 24, Related Party Disclosures B A
IAS 26, Accounting and Reporting by Retirement Benefit Plans - D
IAS 27, Separate Financial Statements B A
IAS 28, Investments in Associates and Joint Ventures B A
IAS 29, Financial Reporting in Hyperinflationary Economics - D
IAS 32, Financial Instruments: Presentation B A
IAS 33, Earnings Per Share C A
IAS 34, Interim Financial Reporting - A
IAS 36, Impairment of Assets B A
IAS 37, Provisions, Contingent Liabilities and Contingent Assets C A A
IAS 38, Intangible Assets C A A
IAS 39, Financial Instruments: Recognition and Measurement (Hedging
- A
only) (Note 1)
IAS 40, Investment Property (Note 1) - A
IAS 41, Agriculture - D
IFRS 1, First-time Adoption of IFRS - C
IFRS 2, Share-based Payment - A
IFRS 3, Business Combinations B A
IFRS 4, Insurance Contracts (Note 1) - D
IFRS 5, Non-current Assets Held for Sale and Discontinued Operations B A
IFRS 6, Exploration for and Evaluation of Mineral Resources - D
IFRS 7, Financial Instruments: Disclosures C A
IFRS 8, Operating Segments - A
IFRS 9, Financial Instruments (Note 1) C A
IFRS 10, Consolidated Financial Statements B A
IFRS 11, Joint Arrangements B A
IFRS 12, Disclosure of Interests in Other Entities B A
IFRS 13, Fair Value Measurement C A
IFRS 14, Regulatory Deferral Accounts - C

52 TECHNICAL KNOWLEDGE © ICAEW 2020

 CERTIFICATE AND ADVANCED
PROFESSIONAL LEVEL LEVEL

TOPIC FINANCIAL
ACCOUNTING CORPORATE
ACCOUNTING
AND REPORTING
REPORTING

IFRS 15, Revenue from Contracts with Customers C B A

IFRS 16, Leases (Note 1) B A
IFRS 17, Insurance Contracts (Note 1) - C
IFRS for SMEs - A

Note 1: Business Planning Banking and Business Planning: Insurance cover IAS 39 and IFRS 9 in more detail than in the
Financial Accounting and Reporting syllabus at Professional Level. Business Planning: Insurance also covers IFRS 4, IFRS 17
and IAS 40 which are not part of the Financial Accounting and Reporting syllabus at Professional Level.

© ICAEW 2020 53
Taxation
CERTIFICATE AND PROFESSIONAL LEVEL
TOPIC
PRINCIPLES TAX BUSINESS PLANNING:
OF TAXATION COMPLIANCE TAXATION

LEGAL AND ETHICAL FRAMEWORK

Anti-money laundering guidance C B A
Base erosion and profit-shifting (BEPS) project C
Disclosure of tax avoidance schemes (DOTAS) A
Extent of tax legislation to England, Wales, Scotland & Northern
C B
Ireland
General anti-abuse rule A
HMRC B → →
Objectives of taxation C → →
Professional Conduct in Relation to Taxation (PCRT) C B
Tax planning, evasion and avoidance C B A
ADMINISTRATION
Administration B → →
Appeals C → →
Apprenticeship levy C →
Digital accounts B → →
PAYE/NIC B → →
Payments B A →
Penalties and interest B → →
Self-assessment B A →
CAPITAL GAINS TAX
Chargeable gains
Annual exempt amount B A →
Capital gains tax for trusts C
Chargeable assets C B →
Chargeable disposals C B →
Chargeable persons C B →
Chattels: wasting and non-wasting B → →
Connected persons A →
Converted trading losses B →
Costs of acquisition and disposal C B →
Leases A
Nil gain/nil loss transfers A →
Part disposals B →
Qualifying corporate bonds B →
Rate of tax B A →
Relief for capital losses A A
Reorganisations and reconstructions A
Shares and securities (including bonus and rights issues) B →
Chargeable gains reliefs
Business assets disposal relief B A
Gift relief B A
Incorporation relief A
Investors’ relief B A

54 TECHNICAL KNOWLEDGE © ICAEW 2020

 CERTIFICATE AND PROFESSIONAL LEVEL
TOPIC
PRINCIPLES TAX BUSINESS PLANNING:
OF TAXATION COMPLIANCE TAXATION

Letting relief A →
Private residence relief A →
Reinvestment relief under EIS/SEIS B
Roll-over relief B A
Overseas aspects of capital gains tax
Arising basis B A
Deemed domicile B A
Domicile B A
Double tax relief A →
Gains on foreign assets B A
Remittance basis B A
Residence C A
Temporary absence A
UK taxation of non-domiciled individuals B A
INCOME TAX
Trading profits
Adjustments to profits B A →
Badges of trade B A →
Capital allowances B A →
Cash basis of accounting B A →
Foreign currency transactions A
Pension contributions A →
Pre-trading expenditure A →
Patent royalties B
Owner-managed businesses
Basis of assessment – current year basis B A →
Change of accounting date A →
Commencement and cessation of trade B A →
Overlap profits B A →
Partnerships B A →
Trading losses A →
Treatment of opening year losses A →
Treatment of terminal losses A →
Employment income
Allowable deductions against employment income A →
Employment income B A →
Share schemes A
Statutory Mileage Rates Scheme A →
Taxable and exempt benefits B A →
Termination payments B
Other income/expenditure
Dividends from UK companies B A →
Enterprise Investment Scheme B
Investment income B A →
ISAs B → →
Miscellaneous income A →

© ICAEW 2020 55
 CERTIFICATE AND PROFESSIONAL LEVEL
TOPIC
PRINCIPLES TAX BUSINESS PLANNING:
OF TAXATION COMPLIANCE TAXATION

Property income C B A
Savings income B A →
Seed Enterprise Investment Scheme B
Venture Capital Trusts B
Overseas aspects of income tax
Arising basis B A
Deemed domicile C A
Domicile C A
Double tax relief A →
Income on foreign assets and income from foreign employment B A
Remittance basis B A
Residence C A
UK taxation of non-domiciled individuals B A
Income tax computation
Exempt income B A →
Gifts of assets and cash to charity B A →
Income tax liability and income tax payable B A →
Income tax charge on child benefit B →
Independent taxation and jointly owned assets B A
Income tax for trusts B
Limit on income tax reliefs A →
Marriage allowance B A →
Pension contributions – provisions for retirement B A
Pension contributions – tax reliefs B A
Personal allowances B A →
Qualifying interest payments B →
Rates of taxation B A →
Taxable persons C A →
INHERITANCE TAX
Fundamental principles of inheritance tax
Chargeable persons A →
Chargeable property A →
Excluded property B →
Inter-spouse transfers A →
Rates of taxation A →
Related property B →
Seven-year accumulation period A →
Transfers of value A →
Trusts C B
Valuation A →
Inheritance tax on lifetime transfers
Relevant property trusts A →
Potentially exempt transfers A →
Inheritance tax on death
Death estate A →
Deeds of variation B

56 TECHNICAL KNOWLEDGE © ICAEW 2020

 CERTIFICATE AND PROFESSIONAL LEVEL
TOPIC
PRINCIPLES TAX BUSINESS PLANNING:
OF TAXATION COMPLIANCE TAXATION

Lifetime transfers A →
Overseas aspects of inheritance tax
Deemed domicile C A
Domicile C A
Double tax relief A →
Lex-situs rules A →
Reliefs and exemptions from inheritance tax B
Agricultural property relief C B
Annual exemption A →
Business property relief B A
Fall in value relief A →
Gifts to charities and political parties A →
Gifts with reservation of benefit A
Pre-owned assets
Inter-spouse transfers A →
Marriage/civil partnership exemption A →
Normal expenditure out of income A →
Quick succession relief B →
Small gifts exemption A →
Taper relief A →
NATIONAL INSURANCE CONTRIBUTIONS
Class 1
– calculation A → →
– directors B →
– earnings C B →
– employment allowance A → →
Class 1A
– calculation A → →
– earnings C B →
Class 1B B →
Class 2 A → →
Class 4
– calculation A → →
– earnings C B →
Maximum contributions C →
CORPORATION TAX
Chargeable gains
Chargeable assets C B →
Chargeable disposals C B →
Chargeable persons C B →
Chattels: wasting and non-wasting B → →
Costs of acquisition and disposal C B →
Indexation B A →
Leases A
Nil gain/nil loss transfers A →
Part disposals B →

© ICAEW 2020 57
 CERTIFICATE AND PROFESSIONAL LEVEL
TOPIC
PRINCIPLES TAX BUSINESS PLANNING:
OF TAXATION COMPLIANCE TAXATION

Purchase of own shares A

Qualifying corporate bonds B →
Relief for capital losses A →
Reorganisations and reconstructions A
Shares and securities (including bonus and rights issues) B →
Substantial shareholding exemption C A
Trading profits
Adjustments to profits B A →
Badges of trade B A →
Capital allowances B A →
Foreign currency transactions A
Long periods of account C A →
Pension contributions B A
Patent royalties B
Taxable total profits
Chargeable gains B A →
Intangible assets B A
Loan relationships B B A
Loan relationships – corporate interest restriction A
Miscellaneous income B A →
Patent box B
Property income (including lease premiums) B A
Qualifying donations B A →
Research and development expenditure A →
Research and development expenditure credits (RDEC) B A
Trading losses B A
Trading profits B A →
Use of deficit on non-trading loan relationships B A
Corporation tax computation
Accounting periods C B A
Close companies A
Corporation tax liability B A →
Distributions B →
Diverted profits tax B
Double tax relief (including underlying tax and withholding tax) B →
Liquidation A
Provision of services through a company A
Rates of taxation B A →
Residence C B →
Tax treaties and the OECD Model Tax Convention A C
Groups
Capital gains groups B A
Change in group structure A
Change in ownership A
Consortium relief A
Controlled foreign companies A

58 TECHNICAL KNOWLEDGE © ICAEW 2020

 CERTIFICATE AND PROFESSIONAL LEVEL
TOPIC
PRINCIPLES TAX BUSINESS PLANNING:
OF TAXATION COMPLIANCE TAXATION

Degrouping charges B A
Group loss relief B A
Group relationships A →
Non-coterminous accounting periods A
Overseas companies and branches B
Pre-acquisition gains and losses A
Related 51% group companies B A
Roll-over relief B A
Transfer of assets B A
Transfer pricing A
STAMP TAXES
Basic principles B →
Chargeable occasions B →
Exemptions B →
Stamp taxes for groups B →
VAT
Capitals goods scheme B →
Classification of supplies B →
Distinction between goods and services C →
Overseas aspects (excluding EU) A →
Group aspects A →
Input VAT A → →
Output VAT A → →
Partial exemption B →
Payments A → →
Penalties and interest A → →
Property transactions B A
Registration and deregistration A → →
Single and multiple supplies B →
Small business reliefs A → →
Taxable person A → →
Taxable supplies A → →
Transfer of a business as a going concern A
VAT records and accounts A → →

© ICAEW 2020 59