To apply relevant knowledge, skills and exercise professional judgement as expected of a senior financial executive or advisor, in taking or recommending decisions relating to the financial management of an organisation.

DETAILED SYLLABUS

A. Role and responsibility towards stakeholders

• 1. Conflicting stakeholder interests
• 2. The role and responsibility of senior financial executive/advisor
• 3. Impact of environmental issues on corporate objectives and on governance
• 4. Financial strategy formulation
• 5. Ethical issues in financial management

B. Advanced investment appraisal

• 1. Discounted cash flow techniques and the use of free cash flows
• 2. Impact of financing on investment decisions and adjusted present values
• 3. Application of option pricing theory in investment decisions
• 4. International investment and financing decisions
• 5. Impact of capital investment on financial reporting

C. Acquisitions and mergers

• 1. Acquisitions and mergers versus other growth strategies
• 2. Valuation for acquisitions and mergers
• 3. Regulatory framework and processes
• 4. Financing acquisitions and mergers

D. Corporate reconstruction and re-organisation

• 1. Predicting corporate failure
• 2. Financial reconstruction
• 3. Business re-organisation

E. Treasury and advanced risk management techniques

• 1. The role of the treasury function in multinationals
• 2. The use of financial derivatives to hedge against forex risk
• 3. The use of financial derivatives to hedge against interest rate risk
• 4. Other forms of risk
• 5. Dividend policy in multinationals and transfer pricing

F. Economic environment for multinationals

• 1. Management of international trade and finance
• 2. Strategic business and financial planning for multinationals

G. Emerging issues in finance and financial management

• 1. Developments in world financial markets
• 2. Financial engineering and emerging derivative products
• 3. Developments in international trade and finance

APPROACH TO EXAMINING THE SYLLABUS

The P4, Advanced Financial Management, paper builds upon the skills and knowledge examined in the F9, Financial Management, paper. At this stage candidates will be expected to demonstrate an integrated knowledge of the subject and an ability to relate their technical understanding of the subject to issues of strategic importance to the firm. The study guide specifies the wide range of contextual understanding that is required to achieve a satisfactory standard at this level. In particular the ethical and managerial aspects of the role of the senior financial manager or advisor will regularly feature in examination papers.

Examination Structure

The examination will be a three hour paper in two sections:

Section A has two compulsory questions normally worth 60 marks in total. This section will normally cover significant issues relevant to the senior financial manager or advisor and will be set in the form of a short case study or scenario. The requirements of the section A questions are such that candidates will be expected to show a comprehensive understanding of issues from across the syllabus. Each question will contain a mix of computational and discursive elements. Normally, approximately 50 per cent of the marks will be apportioned to each of the two elements. A maximum of 40 marks will be available for either question in Section A.

Section B questions are designed to provide a more focused test of the syllabus with, normally, at least one question being wholly discursive. Candidates will be expected to provide answers in a specified form such as a short report or board memorandum commensurate with the professional level of the paper.

Section A:
Answer both questions, total 60 marks
Section B:
Answer two from three questions, 20 marks each
Total: 100 marks