ACCA SP Cheat Sheet 2026

The 30 highest-yield ACCA SP facts, distilled from real exam questions. Print it, save it as a PDF, or study it here — free, no sign-up.

1. The 'weighted average cost of capital' (WACC) should be used as the discount rate when: → The project maintains the company's existing capital structure and business risk
2. In the context of transfer pricing, which of the following methods is MOST likely to lead to sub-optimal decision-making from the group's perspective? → Full cost-plus transfer price when there is no external market
3. According to Mendelow's stakeholder mapping matrix, which strategy is most appropriate for stakeholders with HIGH power and LOW interest? → Keep satisfied — monitor for changes in interest level
4. Under the adjusted present value (APV) method, the base case NPV is calculated by discounting project cash flows at: → The ungeared cost of equity (Ke ungeared)
5. Under ISA 240, the fraud triangle identifies three conditions that increase the risk of fraud: → Pressure (incentive), Opportunity, and Rationalisation
6. Which board committee is primarily responsible for reviewing the company's financial reporting processes and the effectiveness of internal controls? → Audit committee
7. An auditor is considering whether to place reliance on the work of internal audit. Under ISA 610 (Revised), which factor is LEAST relevant to this assessment? → The size of the internal audit department's budget
8. A 'scenario planning' approach to strategy involves: → Developing multiple plausible alternative futures to test strategic robustness
9. What is the primary purpose of a remuneration committee in a listed company? → To set the remuneration packages of executive directors
10. A 'credit default swap' (CDS) is best described as: → A derivative providing insurance against a borrower defaulting on a debt
11. Which of the following is a method of hedging foreign currency transaction risk? → Entering into a forward exchange contract
12. A company's risk register shows a risk with a probability rating of 4/5 and an impact rating of 2/5. The risk committee should classify this as: → Cannot be determined without knowing the risk appetite of the organisation
13. Which of the following is a key difference between benchmarking against competitors and benchmarking against best-in-class organisations in other industries? → Best-in-class benchmarking can identify breakthrough improvements beyond industry norms
14. Under IAS 10 Events after the Reporting Period, which of the following post-reporting date events requires adjustment to the financial statements? → The resolution of a court case confirming an obligation that existed at the reporting date
15. The Modigliani-Miller proposition WITH corporate tax suggests that: → Firm value is maximised by 100% debt due to the tax shield on interest
16. In the context of corporate governance, what does the principle of 'transparency' primarily require of companies? → Disclosing material information to stakeholders in a timely and accurate manner
17. What is the primary role of the Senior Independent Director (SID) under the UK Corporate Governance Code? → To be available to shareholders as an alternative contact point to the Chairman
18. How are associates accounted for in consolidated financial statements under IAS 28? → Equity method (share of net assets and share of profit recognised)
19. In project management, which approach is MOST appropriate when the project requirements are uncertain and likely to evolve during development? → Agile methodology with iterative sprints and continuous feedback
20. Which UK code sets out responsibilities for institutional investors to monitor and engage with their investee companies to promote long-term value? → The UK Stewardship Code
21. When using the Black-Scholes option pricing model, which of the following inputs has an INVERSE relationship with the value of a European call option? → Exercise price
22. A company can issue a convertible bond or a bond with warrants. Which of the following statements about warrants is CORRECT? → Warrants are detachable and can be traded separately from the host bond
23. Which of the following is a key characteristic that distinguishes an independent non-executive director from other directors? → They have no material relationship with the company that could affect their judgement
24. In a unitary board structure, which of the following best describes the board's composition? → Both executive and non-executive directors serving on a single board
25. In corporate governance, what does the principle of 'accountability' primarily mean for directors? → Directors must be answerable to shareholders for their stewardship of the company
26. Which of the following correctly describes UK 'entrepreneurs' relief' (now Business Asset Disposal Relief, BADR)? → A 10% CGT rate on qualifying business asset gains up to a lifetime limit of £1 million
27. Economic Value Added (EVA) is calculated as: → Net operating profit after tax (NOPAT) minus (Capital employed × WACC)
28. Which type of director is typically employed full-time by the company and directly responsible for its day-to-day management? → Executive director
29. Which of the following is a component of 'other comprehensive income' (OCI) under IAS 1? → Gains on revaluation of PPE under IAS 16
30. Under IAS 19, actuarial gains and losses on a defined benefit pension plan are recognised: → In other comprehensive income (OCI) as remeasurements