We bring you new CA Syllabus 2013 for CPT, Final, IPCC, Inter, Syllabus for CA Entrance Exam 2013.
Students who wish to pursue CA as their carrier option needs to clear the CPT which means Common Proficiency Test. This test is conducted in two sessions which include four subjects, two subjects in each session that is accounting and Mercantile Law which is included in the first session and General Economics and Quantitative Aptitude Test in the second session. After clearing CPT, the next exam is IPCC/IPCE which has subjects divided into two groups, Accounting , Accounting standards, Company Accounts, business law, ethics and communication, financial accounts, cost accounting, etc are some of the subjects which is divided in those two groups. After you clear IPCC/IPCE exam you can appear for the final exam which includes Financial Reporting, Strategic Financial Management, Advanced Auditing and Professional Ethics, Etc. The overall syllabus is very vast. We have provided you the detailed information about the contents in each subject.
CA CPT 2013 Syllabus:-
CA –CPT exam is held on two sessions,
The two session’s subjects are divided as follows.
• Section A : Fundamental of Accounting
• Section B : Mercantile Laws
• Section C : General Economics
• Section D : Quantitative Aptitude
Session I: Time Duration 2 hrs (Total 100 marks)
Session A: Accounting Fundamental (Total 60 marks)
1. Fundamental and concept of financial accounting system.
2. Theoretical framework: Meaning of accounting, scope of accounting, accounting concepts, accounting principles, accounting standards, accounting benefits, accounting policies, accounting measurement principle- valuation principle and accounting estimates.
3. Process of Accounting: Trial balance preparation, preparation of capital, revenue expenditure, contingent assets and contingent liabilities and fundamental errors.
4. Inventories: inventory evaluation and records keeping.
5. Bank Reconciliation statement
6. Depreciation accounting
7. Final account preparation for sole proprietors
8. Special transaction account
II. Joint ventures
III. exchange of bills , promissory notes
IV.return basis goods sale
9. Partnership accounts: Partnership firm final account
10. Company accounts introduction: issue of share
Section B: Mercantile Laws ( Total 40 marks)
1. Indian contract acts 1872
2. Sale of good acts 1930
3. The Indian partnership acts 1932
Two sections with total 100 marks within 2 hrs time duration
Section C: (Total 50 marks) General Economics
I. Micro economics
II. Indian Economics Development
I. Introduction: definition, scope, nature of economics, methods for study of economics, central problems of economics, production possibilities curve.
II. Demand and supply theory: Meaning of demand, Law for demand, Demand elasticity, price, and income and cross elasticity.
III. Theory of production and cost: Meaning of production, factors of production, Laws for productions, costs concepts.
IV. Price determination in different markets
Indian Economy development
I. Indian Economy: Nature, Role in different sectors – Agriculture, industry and service, National economy of India, Tax systems in India basics.
II. Select aspects of Indian Economy: Population, poverty, unemployment, infrastructure, inflation, budget, balance of payment, external debts.
III. Economic reforms in India
IV. Money and banking: Money meaning and functions, commercial banks role and functions, reserve bank of India role and functions.
Section D: Quantitative Aptitude (Total 50 Marks):-
I. Ratio and proportion
II. Equations : Linear – simultaneous linear equations up to three variables, quadratic and cubic equations in one variable, equations of a straight line, intersection of straight lines, graphical solution to linear equations.
III. Inequalities: in two variable graphs
IV. Simple and compound interests.
V. Permutation and combinations.
VI. Arithmetic and geometric progressions
VII. Sets, functions and relations
VIII. Limits and continuity
IX. Basics of differential and integral calculus
X. Statistical description of data: Textual, Tabular, Diagrammatic representation of data, frequency distribution, graphics representation of frequency distribution.
XI. Measures of Central Tendency and Dispersion- Arithmetic Mean, Median – Partition Values, Mode, Geometric Mean and Harmonic, Mean, Standard deviation, Quartile deviation.
XII. Correlation and regression
XIII. Theoretical distribution: binomial, normal and Poisson.
XIV. Sampling theory
XV. Index numbers
CA IPCC / IPCE Syllabus 2012:-
Paper 1 : Accounting
[One paper: Three Hours – 100 marks]
Level of Knowledge :
(a) To lay a theoretical foundation for the preparation and presentation of financial statements;
(b) To gain working knowledge of the professional standards, principles and procedures of accounting and their application to different practical situations;
(c) To gain the ability to solve simple problems and cases relating to sole proprietorship, partnership and companies; and
(d) To familiarize students with the fundamentals of computerized system of accounting.
1. A General Knowledge of the framing of the accounting standards, national and international accounting authorities, adoption of international financial reporting standards
2. Accounting Standards
Working knowledge of:-
AS 1: Disclosure of Accounting Policies
AS 2: Valuation of Inventories
AS 3: Cash Flow Statements
AS 6: Depreciation Accounting
AS 7: Construction Contracts (Revised 2002)
AS 9: Revenue Recognition
AS 10: Accounting for Fixed Assets
AS 13: Accounting for Investments
AS 14: Accounting for Amalgamations
3. Company Accounts
(a) Preparation of financial statements – Profit and Loss Account, Balance Sheet and Cash Flow Statement
(b) Profit (Loss) prior to incorporation
(c) Alteration of share capital, Conversion of fully paid shares into stock and stock into shares, Accounting for bonus issue
(d) Simple problems on Accounting for business acquisition. Amalgamation and reconstruction (excluding problems of amalgamation on inter-company holding)
4. Average Due Date, Account Current, Self-Balanceing Ledgers
5. Financial Statements of Not-for-Profit Organisations
6. Accounts from Incomplete Records
7. Accounting for Special Transactions
(a) Hire purchase and instalment sale transactions
(b) Investment accounts
(c) Insurance claims for loss of stock and loss of profit.
9. Issue in Partnership Accounts
Final accounts of partnership firms – Admission, retirement and death of a partner including treatment of goodwill;
10. Accounting in Computerised Environment
An overview of computerized accounting system–Salient features and significance, Concept of grouping of accounts, Codification of accounts, Maintaining the hierarchy of ledger, Accounting packages and consideration for their selection, Generating Accounting Reports.
If either old Accounting Standards (ASs), Announcements and Limited Revisions to ASs are withdrawn or new ASs, Announcements and Limited Revisions to ASs are issued by the Institute of Chartered Accountants of India in place of existing ASs, Announcements and Limited Revisions to ASs, the syllabus will accordingly include/exclude such new developments in place of the existing ones with effect from the date to be notified by the Institute.
Group I - Business Laws, Ethics and Communication
CA :: IPCC/IPCE
Paper 2 : Business Laws, Ethics and Communication [One paper: Three Hours – 100 marks]
Level of Knowledge:-
Part I: Business Laws (60 Marks)
To test working knowledge of business laws and company law and their practical application in commercial situations.
Business Laws (30 Marks)
1. The Indian Contract Act, 1872
2. The Negotiable Instruments Act, 1881
3. The Payment of Bonus Act, 1965
4. The Employees’ Provident Fund and Miscellaneous Provisions Act, 1952
5. The Payment of Gratuity Act, 1972.
Company Law (30 Marks)
The Companies Act, 1956 – Sections 1 to 197
(b) Board of Company Law Administration — National Company Law Tribunal; Appellate Tribunal
(c) Incorporation of Company and Matters Incidental thereto
(d) Prospectus and Allotment, and other matters relating to use of Shares or Debentures
(e) Share Capital and Debentures
(f) Registration of Charges
(g) Management and Administration – General Provisions – Registered office and name, Restrictions on commencement of business, Registers of members and debentures holders, Foreign registers of members or debenture holders, Annual returns, General provisions regarding registers and returns, Meetings and proceedings.
(h) Company Law in a computerized Environment – E-filing.
Note: If new legislations are enacted in place of the existing legislations, the syllabus would include the corresponding provisions of such new legislations with effect from a date notified by the Institute.
Part II: Business Ethics (20 Marks)
To have an understanding of ethical issues in business.
1. Introduction to Business Ethics
The nature, purpose of ethics and morals for organizational interests; Ethics and Conflicts of Interests; Ethical and Social Implications of business policies and decisions; Corporate Social Responsibility; Ethical issues in Corporate Governance.
2. Environment issues
Protecting the Natural Environment – Prevention of Pollution and Depletion of Natural Resources; Conservation of Natural Resources.
3.Ethics in Workplace
Individual in the organisation, discrimination, harassment, gender equality.
4. Ethics in Marketing and Consumer Protection
Healthy competition and protecting consumer’s interest.
5. Ethics in Accounting and Finance
Importance, issues and common problems.
Part III: Business Communications (20 Marks)
To nurture and develop the communication and behavioural skills relating to business
1. Elements of Communication
(a) Forms of Communication: Formal and Informal, Interdepartmental, Verbal and nonverbal; Active listening and critical thinking
(b) Presentation skills including conducting meeting, press conference
(c) Planning and Composing Business messages
(d) Communication channels
(e) Communicating Corporate culture, change, innovative spirits
(f) Communication breakdowns
(g) Communication ethics
(h) Groups dynamics; handling group conflicts, consensus building; influencing and persuasion skills; Negotiating and bargaining
(i) Emotional intelligence - Emotional Quotient
(j) Soft skills – personality traits; Interpersonal skills ; leadership.
2.Communication in Business Environment
(a) Business Meetings – Notice, Agenda, Minutes, Chairperson’s speech
(b) Press releases
(c) Corporate announcements by stock exchanges
(d) Reporting of proceedings of a meeting.
3. Basic understanding of legal deeds and documents
(a) Partnership deed
(b) Power of Attorney
(c) Lease deed
(e) Indemnity bond
(f) Gift deed
(g) Memorandum and articles of association of a company
(h) Annual Report of a company.
Group I - Cost Accounting and Financial Management
Paper 3 : Cost Accounting and Financial Management [One paper: Three Hours – 100 marks]
Level of Knowledge :-
Part I: Cost Accounting (50 Marks)
(a) To understand the basic concepts and processes used to determine product costs,
(b) To be able to interpret cost accounting statements,
(c) To be able to analyse and evaluate information for cost ascertainment, planning, control and decision making, and
(d) To be able to solve simple cases.
1. Introduction to Cost Accounting
(a) Objectives and scope of Cost Accounting
(b) Cost centres and Cost units
(c) Cost classification for stock valuation, Profit measurement, Decision making and control
(d) Coding systems
(e) Elements of Cost
(f) Cost behaviour pattern, Separating the components of semi-variable costs
(g) Installation of a Costing system
(h) Relationship of Cost Accounting, Financial Accounting, Management Accounting and Financial Management.
(a) Material Cost
(i) Procurement procedures— Store procedures and documentation in respect of receipts and issue of stock, Stock verification
(ii) Inventory control —Techniques of fixing of minimum, maximum and reorder levels, Economic Order Quantity, ABC classification; Stocktaking and perpetual inventory
(iii) Inventory accounting
(iv) Consumption — Identification with products of cost centres, Basis for consumption entries in financial accounts, Monitoring consumption.
(b) Employee Cost
(i) Attendance and payroll procedures, Overview of statutory requirements, Overtime, Idle time and Incentives
(ii) Labour turnover
(iii) Utilisation of labour, Direct and indirect labour, Charging of labour cost, Identifying labour hours with work orders or batches or capital jobs
(iv) Efficiency rating procedures
(v) Remuneration systems and incentive schemes.
(c) Direct Expenses
Sub-contracting — Control on material movements, Identification with the main product or service.
(i) Functional analysis — Factory, Administration, Selling, Distribution, Research and Development
Behavioural analysis — Fixed, Variable, Semi variable and Step cost
(ii) Factory Overheads — Primary distribution and secondary distribution, Criteria for choosing suitable basis for allotment, Capacity cost adjustments, Fixed absorption rates for absorbing overheads to products or services
(iii) Administration overheads — Method of allocation to cost centres or products
(iv) Selling and distribution overheads — Analysis and absorption of the expenses in products/customers, impact of marketing strategies, Cost effectiveness of various methods of sales promotion.
Cost Ledgers—Non-integrated accounts, Integrated accounts, Reconciliation of cost and financial accounts.
(a) Job Costing - Job cost cards and databases, Collecting direct costs of each job, Attributing overhead costs to jobs, Applications of job costing.
(b) Batch Costing
(c) Contract Costing - Progress payments, Retention money, Escalation clause, Contract accounts, Accounting for material, Accounting for plant used in a contract, Contract profit and Balance sheet entries.
(d) Process Costing - Double entry book keeping, Process loss, Abnormal gains and losses, Equivalent units, Interprocess profit, Joint products and by products.
(e) Operating Costing System
5. Introduction to Marginal Costing - Marginal costing compared with absorption costing, Contribution, Breakeven analysis and profit volume graph.
6.Introduction to Standard Costing - Various types of standards, Setting of standards, Basic concepts of material and Labour standards and variance analysis.
7.Bugets and Budgetary Control - The Budget manual, preparation and monitoring procedures, budget variance, flexible budget, preparation of functional budget for operating and non-operating functions, cash budget, master budget, principal budget factors.
Part II: Financial Management (50 Marks)
(a) To develop ability to analyse and interpret various tools of financial analysis and planning,
(b) To gain knowledge of management and financing of working capital,
(c) To understand concepts relating to financing and investment decisions, and
(d) To be able to solve simple cases.
1. Scope and Objectives of Financial Management
(a) Meaning, Importance and Objectives
(b) Conflicts in profit versus value maximisation principle
(c) Role of Chief Financial Officer.
2. Time Value of Money -
Compounding and Discounting techniques— Concepts of Annuity and Perpetuity.
3. Financial Analysis and Planning
(a) Ratio Analysis for performance evaluation and financial health
(b) Application of Ratio Analysis in decision making
(c) Analysis of Cash Flow Statement.
(a) Cost of Capital — Weighted average cost of capital and Marginal cost of capital
(b) Capital Structure decisions — Capital structure patterns, Designing optimum capital structure, Constraints, Various capital structure theories
(c) Business Risk and Financial Risk — Operating and financial leverage, Trading on Equity.
5. Types of Financing
(a) Different sources of finance
(b) Project financing — Intermediate and long term financing
(c) Negotiating term loans with banks and financial institutions and appraisal thereof
(d) Introduction to lease financing
(e) Venture capital finance.
6. Investment Decisions
(a) Purpose, Objective, Process
(b) Understanding different types of projects
(c) Techniques of Decision making: Non-discounted and Discounted Cash flow Approaches — Payback Period method, Accounting Rate of Return, Net Present Value, Internal Rate of Return, Modified Internal Rate of Return, Discounted Payback Period and Profitability Index
(d) Ranking of competing projects, Ranking of projects with unequal lives.
7. Management of Working Capital
(a) Working capital policies
(b) Funds flow analysis
(c) Inventory management
(d) Receivables management
(e) Payables management
(f) Management of cash and marketable securities
(g) Financing of working capital.
Group I - Taxation
Paper 4 : Taxation [One paper: Three Hours – 100 marks]
(a) To gain knowledge of the provisions of Income-tax law relating to the topics mentioned in the contents below and
(b) To gain ability to solve simple problems concerning assessees with the status of ‘Individual’ and ‘Hindu Undivided Family’ covering the areas mentioned in the contents below.
Part I: Income-Tax (50 Marks)
1. Important definitions in the Income-tax Act, 1961
2. Basis of charge; Rates of taxes applicable for different types of assessees
3. Concepts of previous year and assessment year
4. Residential status and scope of total income; Income deemed to be received / deemed to accrue or arise in India
5. Incomes which do not form part of total income
6. Heads of income and the provisions governing computation of income under different heads
7. Income of other persons included in assessee’s total income
8. Aggregation of income; Set-off or carry forward and set-off of losses
9. Deductions from gross total income
10. Computation of total income and tax payable; Rebates and reliefs
11. Provisions concerning advance tax and tax deducted at source
12. Provisions for filing of return of income.
Part II: Service tax (25 Marks) and VAT (25 marks)
To gain knowledge of the provisions of service tax as mentioned below and basic concepts of Value added tax (VAT) in India.
1. Service tax – Concepts and general principles
2. Charge of service tax and taxable services
3. Valuation of taxable services
4. Payment of service tax and filing of returns
VAT (25 marks)
5. Concepts and general principles.
6. Calculation of VAT Liability including input Tax Credits
7. Small Dealers and Composition Scheme
8. VAT Procedures.
Note: If new legislations are enacted in place of the existing legislations the syllabus will accordingly include the corresponding provisions of such new legislations in the place of the existing legislations with effect from the date to be notified by the Institute. Students shall not be examined with reference to any particular State VAT Law.
Group II - Advanced Accounting
Paper 5 : Advanced Accounting [One paper: Three Hours – 100 marks]
(a) To have an understanding of the conceptual framework for the preparation and presentation of financial statements;
(b) To gain working knowledge of the professional standards and application of accounting principles to different practical situations; and
(c) To gain the ability to solve advanced problems in the case of different entities.
1. Conceptual Framework for Preparation and Presentation of Financial Statements
2. Accounting Standards
Working knowledge of:
AS 4: Contingencies and Events occurring after the Balance Sheet Date
AS 5: Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies
AS 11: The Effects of Changes in Foreign Exchange Rates (Revised 2003)
AS 12: Accounting for Government Grants
AS 16: Borrowing Costs
AS 19: Leases
AS 20: Earnings Per Share
AS 26: Intangible Assets
AS 29: Provisions, Contingent Liabilities and Contingent Assets.
3. Advanced Issues in Partnership Accounts:- Dissolution of partnership firms including piecemeal distribution of assets; Amalgamation of partnership firms; Conversation into a company and Sale to a company.
4. Company Accounts
(a) Accounting for employee stock option plan, Buy back of securities, Equity shares with differential rights, Underwriting of shares and debentures, Redemption of debentures
(b) Advanced problems for business acquisition, Amalgamation and reconstruction (excluding problems of amalgamation of inter-company holding)
(c) Accounting involved in liquidation of companies, Statement of Affairs (including deficiency/surplus accounts) and liquidator's statement of account of the winding up.
(d) Financial Statements of Banking, Insurance and Electricity Companies
5. Accounting for Special Transactions
Departmental and branch accounts including foreign branches
Note: If either old Accounting Standards (ASs), Announcements and Limited Revisions to ASs are withdrawn or new ASs, Announcements and Limited Revisions to ASs are issued by the Institute of Chartered Accountants of India in place of existing ASs, Announcements and Limited Revisions to ASs, the syllabus will accordingly include/exclude such new developments in place of the existing ones with effect from the date to be notified by the Institute.
Group II - Auditing and Assurance
[One paper: Three Hours – 100 marks]
To understand objective and concepts of auditing and gain working knowledge of generally accepted auditing procedures and of techniques and skills needed to apply them in audit and attestation engagements and solving simple case-studies.
1. Auding Concepts - Nature and limitations of Auditing, Basic Principles governing an audit, Ethical principles and concept of Auditor’s Independence, Relationship of auditing with other disciplines.
2. Auditing and Assurance Standards - Overview, Standard-setting process, Role of International Auditing and Assurance Standards Board and Auditing and Assurance Standards Board in India.
3. Auditing engagement - Audit planning, Audit programme, Control of quality of audit work–Delegation and supervision of audit work.
4. Documentation - Audit working papers, Audit files: Permanent and current audit files, Ownership and custody of working papers.
5. Audit evidence - Audit procedures for obtaining evidence, Sources of evidence, Reliability of audit evidence, Methods of obtaining audit evidence, Physical verification, Documentation, Direct confirmation, Re-computation, Analytical review techniques, Representation by management.
6. Internal Control - Elements of internal control, Review and documentation, Evaluation of internal control system, Internal control questionnaire, Internal control check list, Tests of control, Application of concept of materiality and audit risk, Concept of internal audit.
7. Internal Control and Computerized Environment, Approaches to Auditing in Computerised Environment.
8. Audit Sampling - Types of sampling, Test checking, Techniques of test checks.
9. Analytical review procedures.
10. Audit of payments - General considerations, Wages, Capital expenditure, Other payments and expenses, Petty cash payments, Bank payments, Bank reconciliation.
11. Audit of receipts - General considerations, Cash sales, Receipts from debtors, Other Receipts.
12. Audit of Purchases - Vouching cash and credit purchases, Forward purchases, Purchase returns, Allowance received from suppliers.
13. Audit of Sales - Vouching of cash and credit sales, Goods on consignment, Sale on approval basis, Sale under hire-purchase agreement, Returnable containers, Various types of allowances given to customers, Sale returns.
14. Audit of suppliers’ ledger and the debtors’ ledger - Self-balancing and the sectional balancing system, Total or control accounts, Confirmatory statements from credit customers and suppliers, Provision for bad and doubtful debts, Writing off of bad debts.
15. Audit of impersonal ledger - Capital expenditure, deferred revenue expenditure and revenue expenditure, Outstanding expenses and income, Repairs and renewals, Distinction between reserves and provisions, Implications of change in the basis of accounting.
16. Audit of assets and liabilities.
17. Company Audit - Audit of Shares, Qualifications and Disqualifications of Auditors, Appointment of auditors, Removal of auditors, Powers and duties of auditors, Branch audit, Joint audit, Special audit, Reporting requirements under the Companies Act, 1956.
18. Audit Report - Qualifications, Disclaimers, Adverse opinion, Disclosures, Reports and certificates.
19. Special points in audit of different types of undertakings, i.e., Educational institutions, Hotels, Clubs, Hospitals, Hire-purchase and leasing companies (excluding banks, electricity companies, cooperative societies, and insurance companies).
20. Features and basic principles of government audit, Local bodies and not-for-profit organizations, Comptroller and Auditor General and its constitutional role.
Paper 7 : Information Technology and Strategic Management [One paper: Three Hours – 100 marks]
Section A: Information Technology ( 50 Marks)
To develop an understanding of Information Technology and its use by the business as facilitator and driver.
1. Introduction to Computers
(a) Computer hardware
Classification of computers – personal computer, workstation, servers and super computers
Computer components – CPU, input output devices, storage devices
(b) BUS, I/O CO processors, ports (serial, parallel, USB ports), expansion slots, add on cards, on board chips, LAN cards, multi media cards, cache memory, buffers, controllers and drivers
(c) Computer software:-
Systems software – operating system, translators (compilers, interpreters and assemblers), system utilities
General purpose software/ utilities - word processor, spread sheet, DBMS, scheduler / planner, internet browser and e-mail clients
Application software – financial accounting, payroll, inventory
Specialised systems – Enterprise Resource Planning (ERP), artificial intelligence, expert systems, decision support systems – an overview
2. Data Storage, Retrievals and Data Base Management Systems
(a) Data and information concepts: bits, bytes, KB, MB, GB, TB
(b) Data organization and access
Storage concepts : records, fields, grouped fields, special fields like date, integers, real, floating, fixed, double precision, logical, characters, strings, variable character fields (Memo); key, primary key, foreign key, secondary key, referential integrity, index fields.
Storage techniques: sequential, block sequential, random, indexed, sequential access, direct access, random access including randomizing
Logical structure and physical structure of files
(c) DBMS models and classification:- Need for database, administration, models, DML and DDL (query and reporting); data dictionaries, distributed data bases, object oriented databases, client server databases, knowledge databases
(d) Backup and recovery – backup policy, backup schedules, offsite backups, recycling of backups, frequent checking of recovery of backup
(e) Usage of system software like program library management systems and tape and disk management systems – features, functionalities, advantages
(f) Data mining and data warehousing - an overview
3. Computer Networks & Network Security
(a) Networking concepts – need and scope, benefits
Classification: LAN, MAN, WAN, VPN; peer-to-peer, client server
Components - NIC, router, switch, hub, repeater, bridge, gateway, modem
Network topologies – bus, star, ring, mesh, hybrid, architecture : token ring, ethernet
transmission technologies and protocols – OSI, TCP/IP, ISDN etc.
Network operating system
(b) Local Area Networks – components of a LAN, advantages of LAN
(c) Client server technology
Limitation of single user systems and need for client server technology
Servers – database, application, print servers, transaction servers, internet servers, mail servers, chat servers, IDS
Introduction to 3-tier and “n” tier architecture (COM, COM+)
(d) Data centres: features and functions, primary delivery centre and disaster recovery site
(e) Network security need; threats and vulnerabilities; security levels; techniques
4. Internet and other technologies
(a) Internet and world-wide web, intranets, extranets, applications of internet, internet protocols
(b) E-commerce - nature, types (B2B, B2C, C2C), supply chain management, CRM, Electronic Data Interchange (EDI), Electronic Fund Transfers (EFT), payment portal, e-commerce security;
(c) Mobile commerce, bluetooth and Wi-Fi
5. Flowcharts, Decision Tables.
Section B: Strategic Management (50 marks)
(a) To develop an understanding of the general and competitive business environment;
(b) To develop an understanding of strategic management concepts and techniques;
(c) To be able to solve simple cases.
1. Business Environment:- General environment - demographic, socio-cultural, macro-economic, legal/political, technological, and global; competitive environment.
2. Business Policy and Strategic Management:- Meaning and nature; strategic management imperative; vision, mission and objectives; strategic levels in organisations.
3. Strategic Analyses:- Situational analysis – SWOT analysis, TOWS matrix, portfolio analysis - BCG matrix.
4. Strategic Planning:- Meaning, stages, alternatives, strategy formulation.
5. Formulation of Functional Strategy:- Marketing strategy, financial strategy, production strategy, logistics strategy, human resource strategy.
6. Strategy Implementation and Control:- Organisational structures; establishing strategic business units; establishing profit centers by business, product or service, market segment or customer; leadership and behavioural challenges.
7. Reaching Strategic Edge:- Business process re-engineering, benchmarking, total quality management, six sigma, contemporary strategic issues.
CA Final Syllabus 2012:-
Paper 1 : Financial Reporting [One paper: Three Hours – 100 marks]
(a) To gain ability to analyze financial statements including consolidated financial statements of group companies and financial reports of various types of entities,
(b) To gain ability to apply valuation principles,
(c) To familiarise with recent developments in the area of financial reporting,
(d) To gain ability to solve financial reporting and valuation cases.
1. Accounting Standards, Accounting Standards Interpretations and Guidance Notes on various accounting aspects issued by the ICAI and their applications.
2. Overview of International Accounting Standards (IAS)/International Financial Reporting Standards (IFRS), Interpretations by International Financial Reporting Interpretation Committee (IFRIC), Significant difference vis-a-vis Indian Accounting Standards. Understanding of US GAAP, Applications of IFRS and US GAAP.
3. Corporate Financial Reporting - Issues and problems with special reference to published financial statements.
4. Accounting for Corporate Restructuring (including inter-company holdings).
5. Consolidated Financial Statements of Group Companies Concept of a Group, purposes of consolidated financial statements minority interest, Goodwill, Consolidation procedures – Minority interests, Goodwill, Treatment of pre- acquisition and post-acquisition profit. Consolidation with two or more subsidiaries, consolidation with foreign subsidiaries. Consolidated profit and loss account, balance sheet and cash flow statement. Treatment of investment in associates in consolidated financial statements. Treatment of investments in joint ventures in consolidated financial statements.
6. Accounting and Reporting of Financial Instruments:- Meaning, recognition, derecognition and offset, compound financial instruments, Measurement of financial instruments, Hedge accounting, Disclosures
7. Share based payments:- Meaning, Equity settled transactions, Transaction with employees and non- employees, Determination of fair value of equity instruments, Vesting conditions, Modification, cancellation and settlement, Disclosures
8. Financial Reporting by Mutual funds, Non-banking finance companies, Merchant bankers, Stock and commodity market intermediaries.
(a) Concept of Valuation
(b) Valuation of Tangible Fixed Assets
(c) Valuation of Intangibles including Brand Valuation and Valuation of Goodwill
(d) Valuation of Liabilities
(e) Valuation of Shares
(f) Valuation of Business
10. Developments in Financial Reporting
(a) Value Added Statement
(b) Economic Value Added, Market Value Added, Shareholders’ Value Added
(c) Human Resource Reporting
(d) Inflation Accounting
Group I – Strategic Financial Management
Paper 2 : Strategic Financial Management [One paper: Three Hours – 100 marks]
To apply financial management theories and techniques for strategic decision making.
1. Financial Policy and Corporate Strategy
Strategic decision making framework
Interface of Financial Policy and strategic management
Balancing financial goals vis-à-vis sustainable growth.
2. Project Planning and Capital Budgeting
Cash flow Projections – Impact of taxation, depreciation, inflation and working capital
Capital Budgeting Decisions - Certainty Equivalent approach, Evaluation of Risky Investment Proposals, Risk and Return analysis, Simulation and decision tree analysis, Sensitivity analysis, Capital Rationing, Adjusted Net Present Value, Replacement decisions, Application of Real Options in capital budgeting, Impact of inflation on capital budgeting decisions
Preparation of Project Report
Social cost benefit analysis.
3. Leasing decision including cross border leasing
4. Dividend Decisions, Dividend theories, Determinants of dividend policies.
(a) Indian Capital Market
including role of various primary and secondary market institutions
(b) Capital Market Instruments
Financial derivatives – stock futures, stock options, index futures, index options
Option valuation techniques : Binomial model, Black Scholes Option Pricing Model, Greeks – Delta, Gamma, Theta, Rho and Vega
Pricing of Futures – Cost of carry model
(c) Commodity derivatives
(d) OTC derivatives
Swaps, Swaptions, Forward Rate Agreements (FRAs), Caps, Floors and Collors.
6 Security Analysis
Fundamental analysis - Economic analysis, Industry analysis and Company Analysis
Bond valuation, Price Yield relationship, Bond Price forecasting – application of duration and convexity, Yield curve strategies
Technical Analysis – market cycle model and basic trend identification, different types of charting, support and resistance, price patterns, moving averages, Bollinger Bands, momentum analysis.
7. Portfolio Theory and Asset Pricing
Efficient Market Theory – Random walk theory ; Markowitz model of risk return optimization
Capital Asset Pricing Model (CAPM)
Arbitrage Pricing Theory (APT)
Sharpe Index Model
Portfolio Management - Formulation, Monitoring and Evaluation
Equity Style Management
Principles and Management of Hedge Funds
International Portfolio Management.
8. Financial Services in India
On Line Share Trading
(a) Mutual Funds:- Regulatory framework, formulation, monitoring and evaluation of various schemes of Mutual funds, Money market mutual funds.
(b) Exchange Traded Funds.
10. Money Market operations
(a) Foreign Direct Investment, Foreign Institutional Investment.
(b) International Financial Management
Raising of capital abroad - American Depository Receipts, Global Depository Receipts,
External Commercial Borrowings and Foreign Currency Convertible Bonds
International Capital Budgeting
International Working Capital Management.
12. Foreign Exchange Exposure and Risk Management
Exchange rate determination, Exchange rate forecasting
Foreign currency market
Foreign exchange derivatives – Forward, futures, options and swaps
Management of transaction, translation and economic exposures
Hedging currency risk.
13. Mergers, Acquisitions and Restructuring
Meaning of mergers and acquisition, categories, purposes
Process of mergers and acquisition – Identification and valuation of the target, acquisition through negotiation, due diligence, post – merger integration
Legal and regulatory requirements
Merger and Acquisition agreement
Potential adverse competitive effects of mergers
Corporate Takeovers: Motivations, Co-insurance effect, Cross-border takeovers, Forms of takeovers, Takeover defenses
Going Private and Other Control Transactions: Leveraged Buyouts (LBOs), Management Buyouts (MBOs), Spin Offs and Asset Divestitures
Corporate Restructuring : Refinancing and rescue financing, reorganizations of debtors and creditors, Sale of assets, targeted stock offerings, downsizing and layoff programmes, negotiated wage give-backs, employee buyouts.
Paper 3: Advanced Auditing and Professional Ethics [One paper: Three Hours – 100 marks]
(a) To gain expert knowledge of current auditing practices and procedures and apply them in auditing engagements,
(b) To develop ability to solve cases relating to audit engagements.
1. Auditing Standards, Statements and Guidance Notes
Auditing and Assurance Standards (AASs); Statements and Guidance Notes on Auditing issued by the ICAI; Significant differences between Auditing and Assurance Standards and International Standards on Auditing.
2. Audit strategy, planning and programming
Planning the flow of audit work; audit strategy, planning programme and importance of supervision: review of audit notes and working papers; drafting of reports; principal’s ultimate responsibility; extent of delegation; control over quality of audit work; reliance on the work of other auditor, internal auditor or an expert.
3. Risk Assessment and Internal Control
Evaluation of internal control procedures; techniques including questionnaire, flowchart; internal audit and external audit, coordination between the two.
4. Audit under computerized information system (CIS) environment
Special aspects of CIS Audit Environment, need for review of internal control especially procedure controls and facility controls. Approach to audit in CIS Environment, use of computers for internal and management audit purposes: audit tools, test packs, computerized audit programmes; Special Aspects in Audit of E-Commerce Transaction.
5. Special audit techniques
(a) Selective verification; statistical sampling: Special audit procedures; physical verification of assets, direct confirmation of debtors and creditors
(b) Analytical review procedures
(c) Risk-based auditing.
6 Audit of limited companies
Statutory requirements under the Companies Act 1956; Audit of branches: joint audits; Dividends and divisible profits % financial, legal, and policy considerations.
7. Rights, duties, and liabilities of auditors; third party liability.
8. Audit reports; qualifications, notes on accounts, distinction between notes and qualifications, detailed observations by the statutory auditor to the management vis-a-vis obligations of reporting to the members.
9. Audit Committee and Corporate Governance
10. Audit of Consolidated Financial Statements, Audit Reports and Certificates for Special Purpose engagements; Certificates under the Payment of Bonus Act, import/export control authorities, etc.; Specific services to non-audit clients; Certificate on Corporate Governance.
11. Special features of audit of banks, insurance companies, co-operative societies and non-banking financial companies.
12. Audit under Fiscal Laws, viz, Direct and Indirect Tax Laws.
13. Cost audit
14. Special audit assignments like audit of bank borrowers, audit of stock and commodity exchange intermediaries and depositories; inspection of special entities like banks, financial institutions, mutual funds, stock brokers.
15. Special features in audit of public sector companies. Directions of Comptroller and Auditor General of India under Section 619; Concepts of propriety and efficiency audit.
16. Internal audit, management and operational audit Nature and purpose, organisation, audit programme, behavioural problems; Internal Audit Standards issued by the ICAI; Specific areas of management and operational audit involving review of internal control, purchasing operations, manufacturing operations, selling and distribution, personnel policies, systems and procedures. Aspects relating to concurrent audit.
17. Investigation and Due Diligence.
18. Concept of peer review
19. Salient features of Sarbanes – Oxley Act, 2002 with special reference to reporting on internal control.
20. Professional Ethics
Code of Ethics with special reference to the relevant provisions of The Chartered Accountants Act, 1949 and the Regulations thereunder.
Group I – Corporate and Allied Laws
Paper 4: Corporate and Allied Laws [One paper: Three Hours – 100 marks]
Section A: Company Law (70 Marks)
To be able to analyze and apply various provisions of the Companies Act in practical situations
1. The Companies Act, 1956, Rules and Regulations thereunder in its entirety with specific reference to
(a) Accounts and audit
(c) Directors - powers, managerial remuneration
(d) Meetings, powers of the Board and related party transactions
(e) Inspection and Investigation
(f) Compromises, Arrangements and Reconstructions
(g) Prevention of Oppression and Mismanagement
(h) Revival and Rehabilitation of Sick Industrial Companies
(i) Corporate Winding up and Dissolution
(j) Producer Companies
(k) Companies incorporated outside India
(l) Offences and Penalties
2. Corporate Secretarial Practice – Drafting of Resolution, Minutes, Notices and Reports
Section B: Allied Laws (30 Marks)
To develop ability to analyse the requirements of laws stated in the Section.
3. An overview of the following laws –
(a) The Securities and Exchange Board of India Act,1992, Rules, Regulations and Guidelines issued thereunder.
(b) The Securities Contracts (Regulation) Act, 1956
(c) The Foreign Exchange Management Act, 1999
(d) The Competition Act, 2002
(e) The Banking Regulation Act, 1949, The Insurance Act, 1938. The Insurance Regulatory and Development Authority Act, 1999. The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002
(f) The Prevention of Money Laundering Act, 2002
4. Interpretation of Statutes, Deeds and Documents.
Group II – Advanced Management Accounting
Paper 5: Advanced Management Accounting [One paper: Three Hours – 100 marks]
To apply various management accounting techniques to all types of organizations for planning, decision making and control purposes in practical situations.
To develop ability to apply quantitative techniques to business problems
1. Cost Management
(a) Developments in the business environment; just in time; manufacturing resources planning; (MRP); automated manufacturing; synchronous manufacturing and back flush systems to reflect the importance of accurate bills of material and routings; world class manufacturing; total quality management.
(b) Activity based approaches to management and cost analysis
(c) Analysis of common costs in manufacturing and service industry
(d) Techniques for profit improvement, cost reduction, and value analysis
(e) Throughput accounting
(f) Target costing; cost ascertainment and pricing of products and services
(g) Life cycle costing
(h) Shut down and divestment.
2. Cost Volume Profit Analysis
(a) Relevant cost
(b) Product sales pricing and mix
(c) Limiting factors
(d) Multiple scarce resource problems
(e) Decisions about alternatives such as make or buy, selection of products, etc.
3. Pricing Decisions
(a) Pricing of a finished product
(b) Theory of price
(c) Pricing policy
(d) Principles of product pricing
(e) New product pricing
(f) Pricing strategies
(g) Pricing of services
(h) Pareto analysis
4. Budgets and Budgetary Control
The budget manual, Preparation and monitoring procedures, Budget variances, Flexible budgets, Preparation of functional budget for operating and non-operating functions, Cash budgets, Capital expenditure budget, Master budget, Principal budget factors.
5. Standard Costing and Variance Analysis
Types of standards and sources of standard cost information; evolution of standards, continuous -improvement; keeping standards meaningful and relevant; variance analysis; disposal of variances.
(a) Investigation and interpretation of variances and their inter relationship
6. Transfer pricing
(a) Objectives of transfer pricing
(b) Methods of transfer pricing
(c) Conflict between a division and a company
(d) Multi-national transfer pricing.
7. Cost Management in Service Sector
8. Uniform Costing and Inter firm comparison
9. Profitability analysis - Product wise / segment wise / customer wise
10. Financial Decision Modeling
(a) Linear Programming
(b) Network analysis - PERT/CPM, resource allocation and resource leveling
(c) Transportation problems
(d) Assignment problems
(f) Learning Curve Theory
(g) Time series forecasting
(h) Sampling and test of hypothesis
Group II – Information Systems Control and Audit
Paper 6: Information Systems Control and Audit [One paper: Three Hours – 100 marks]
To gain application ability of necessary controls, laws and standards in computerized Information system.
1. Information Systems Concepts
General Systems Concepts – Nature and types of systems, nature and types of information, attributes of information.
Management Information System – Role of information within business
Business information systems –various types of information systems – TPC, MIS, DSS, EIS, ES
2. Systems Development Life Cycle Methodology
Introduction to SDLC/Basics of SDLC
Requirements analysis and systems design techniques
Strategic considerations : Acquisition decisions and approaches
Software evaluation and selection/development
Alternate development methodologies- RAD, Prototype etc
Hardware evaluation and selection
Systems operations and organization of systems resources
Systems documentation and operation manuals
User procedures, training and end user computing
System testing, assessment, conversion and start-up
Hardware contracts and software licenses
Brief note on IS Organisation Structure
3. Control objectives
(a) Information Systems Controls
Need for control
Effect of computers on Internal Audit
Responsibility for control – Management, IT, personnel, auditors
Cost effectiveness of control procedure
Control Objectives for Information and related Technology (COBIT)
(b) Information Systems Control Techniques
Control Design: Preventive and detective controls, Computer-dependent control, Audit trails, User Controls (Control balancing, Manual follow up)
Non-computer-dependent (user) controls: Error identification controls, Error investigation controls, Error correction controls, Processing recovery controls
(c) Controls over system selection, acquisition/development
Standards and controls applicable to IS development projects
Developed / acquired systems
Structured analysis and design
Role of IS Auditor in System acquisition/selection
(d) Controls over system implementation
Acceptance testing methodologies
System conversion methodologies
Post implement review
Monitoring, use and measurement
(e) Control over System and program changes
Change management controls
Testing and quality controls
Custody, copyright and warranties
Role of IS Auditor in Change Management
(f) Control over Data integrity, privacy and security
Classification of information
Logical access controls
Physical access controls
Security concepts and techniques – Cryptosystems, Data Encryption Standards (DES), Public Key Cryptography & Firewalls
Data security and public networks
Monitoring and surveillance techniques
Unauthorised intrusion, hacking, virus control
Role of IS Auditor in Access Control
4. Audit Tests of General and Automated Controls
(a )Introduction to basics of testing (reasons for testing);
(b) Various levels/types of testing such as: (i) Performance testing, (ii) Parallel testing, (iii) Concurrent Audit modules/Embedded audit modules, etc.
5. Risk assessment methodologies and applications:
(a) Meaning of Vulnerabilities, Threats, Risks, Controls, (b) Fraud, error, vandalism, excessive costs, competitive disadvantage, business, interruption, social costs, statutory sanctions, etc. (c) RiskAssessment and Risk Management, (d) Preventive/detective/corrective strategies
6. Transfer pricing
(a) Fundamentals of BCP/DRP, (b) Threat and risk management, (c) Software and data backup techniques, (d) Alternative processing facility arrangements,(e) Disaster recovery procedural plan, (f) Integration with departmental plans, testing and documentation, (g) Insurance
7. An over view of Enterprise Resource Planning (ERP)
8. Information Systems Auditing Standards, guidelines, best practices (BS7799, HIPPA, CMM etc.)
9. Drafting of IS Security Policy, Audit Policy, IS Audit Reporting - a practical perspective
10. Information Technology Act, 2000
Paper 7: Direct Tax Laws [One paper: Three Hours – 100 marks]
(a) To gain advanced knowledge of the provisions of direct tax laws,
(b) To acquire the ability to apply the knowledge of the provisions of direct tax laws to various situations in actual practice.
I. The Income-tax Act, 1961 and Rules thereunder (90 marks)
II. The Wealth-tax Act, 1957 and Rules thereunder (10 marks)
While covering the direct tax laws, students should familiarise themselves with considerations relevant to tax management. These may include tax considerations with regard to specific management decisions, foreign collaboration agreements, international taxation, amalgamations, tax incentives, personnel compensation plans, inter-relationship of taxation and accounting, with special reference to relevant accounting standards and other precautions to be observed to maximise tax relief. Further, they should have a basic understanding about the ethical considerations in tax management and compliance with taxation laws.
Note– If new legislations are enacted in place of the existing legislations relating to income tax and wealth tax, the syllabus will accordingly include such new legislations in the place of the existing legislations with effect from the date to be notified by the Institute.
Paper 8: Indirect Tax Laws
[One paper: Three Hours – 100 marks]
(a) To gain expert knowledge of the principles of the laws relating to central excise customs and service tax,
(b) To acquire the ability to apply the knowledge of the provisions of the above-mentioned laws to various situations in actual practice.
Section A: Central Excise (40 marks)
Central Excise Act, 1944 and the related Rules, Circulars and Notifications; Central Excise Tariff Act, 1985 and the related Rules.
Section B: Service tax & VAT (40 marks)
Law relating to service tax as contained in the Finance Act, 1994 as amended from time to time and the related Rules, Circulars and Notifications.
Issues related to Value Added Tax:-
1. Backdrop for State-Level VAT in India
2. Taxonomy of VAT
3. Input tax credit, tax invoices
4. Small dealers and composition scheme
5. VAT procedures
6. VAT in relation to incentive schemes, works contract, lease transactions and hire purchase transactions.
7. VAT and Central Sales Tax
Section C: Customs (20 marks)
Customs Act, 1962 and the related Rules, Circulars and Notifications; Customs Tariff Act, 1975 and the related Rules.
While covering the above laws, students should familiarize themselves with the interrelationship of accounting with excise, customs and service tax and also the ethical considerations involved in the compliance of these laws.
Note– If new legislations are enacted in place of the existing legislations relating to central excise, customs and service tax, the syllabus will accordingly include such new legislations in place of the existing legislations with effect from the date to be notified by the Institute. Students shall not be examined with reference to any particular State VAT Law.