Alto Hotels Ltd gave candidates twelve pages of Advance Information. As in March, most of the exam was already sitting there in plain sight for anyone who read it as a set of questions rather than as background reading. Here is how each question was set up.
Question 1: Business Insight and Performance
The Advance Information ended with two problems that had been raised but not resolved.
The first was the Manchester hotel, which had been reporting higher than budgeted staff costs in two areas, front desk staff and porters, for several months. The Advance Information then told you that Leo Patel had asked the hotel's general manager for the information he needed to analyse labour variances and understand the reasons for the increase. That is about as direct a signal as ICAEW gives. Expect labour rate and efficiency variances, expect them for both staff groups, and expect to explain the causes.
The Advance Information even supplied the explanation you would need. It described front desk staff as responsible for welcoming guests, check-in and check-out and enquiries, and porters as responsible for luggage. The exam then added that recruitment of front desk staff had been difficult and that porters were helping out at reception when it got busy. Put those together and the pattern of a favourable front desk efficiency variance alongside an adverse portering one explains itself.
The second thread was the Heathrow hotel's customer survey. The Advance Information printed draft 1 in full, complete with a vague question about frequency, a double-barrelled question running to fifty words, and a tick-box list where a rating scale would produce better data. Printing a flawed document in the Advance Information is not an accident. The exam simply produced draft 2 and asked why it was better.
Question 2: Accounting
The accounting information section listed the policies that the adjustments would go on to test.
Revenue from services is recognised over the period of the guest's stay, and payments received in advance are held as deferred income. That set up the Edinburgh hotel's £272,000 of advance payments, which had been wrongly taken to revenue. Depreciation is calculated on a straight-line basis over the expected useful life to the nearest month, which set up the Liverpool gym equipment installed on 1 October and needing six months of charge. The allowance for irrecoverable receivables was disclosed as a separate line, with the note that movements in it go to selling, distribution and administrative expenses, which set up the increase from £38,000 to £45,000.
The rights issue was flagged twice over. Section 1 told you that Alto made a rights issue on 31 March 2026, the last day of the financial year. It was then tested as a journal, correcting the amount wrongly posted to share capital, and again as a separate requirement asking you to explain the accounting treatment and its effect on the elements of the financial statements. Candidates who had thought about the share capital and share premium split in advance had two requirements half-answered.
The only genuinely fresh item was the telecoms invoice received after the year end, which tested straightforward accruals.
Question 3: Assurance
The assurance section handed you the material for almost every requirement in a thirty-mark question.
It described the control environment in detail, and it did so in two halves. On the strong side: training for directors and general managers, assessment of finance staff on their understanding of controls, a finance function large enough for segregation of duties, an internal control manual, and an internal audit function led by a chartered accountant. On the weak side: general managers with freedom to design their own controls, hotels too small for proper segregation of duties, general managers who do not respond promptly to internal audit findings, and a recently acquired Edinburgh hotel still running its own systems, bank accounts and payroll.
The Advance Information also told you that the head of internal audit reports directly to the CEO rather than to a non-executive director, and it listed the external auditor's three identified risk areas: revenue, wages and salaries, and cash at Edinburgh. Finally, it told you outright that a review of Edinburgh's wages and salaries procedures had found internal controls to be weak, which became the requirement on controls to stop former employees being paid after they leave.
Question 4: Sustainability and Ethics
Mei Chen already believed that Sophie Wright's marketing materials amounted to greenwashing. The Advance Informationsaid so directly, and explained why: general managers are bonused on revenue and margin rather than environmental performance, and many hotels do only the minimum needed to meet Alto's internal standards.
The exam then dramatised the problem, with Sophie asking a trainee to select the most flattering parts of an analysis built on 100% occupancy assumptions, in exchange for a good word at the next performance review. Both halves of the ethics answer, the threats and the greenwashing examples, had been prepared for you weeks earlier.
The lesson
Two sittings, the same pattern. If a named director wants something analysed, it will be analysed. If a control is described as weak, you will be asked to fix it. If a flawed document is reproduced in full, you will be asked what is wrong with it. And if an accounting policy is spelled out in unusual detail, an adjustment is coming that depends on it.
Read the Advance Information as a set of questions waiting to be asked, make a list, and work through it. That list is more valuable than any amount of general revision in the final fortnight.