CA Intermediate Course & Syllabus



CA Intermediate Course Overview -


CA Intermediate Exam will be held twice a year in the month of May and November. The CA Intermediate Exam is the 2nd level of exam of students pursuing the Chartered Accountancy Course (CA). Often abridged as CA Inter, the students can appear for the CA Inter Exam after clearing the CPT Exam or the CA Foundation Exam (which is the entrance exam for CA Students). In some scenarios, there is a direct entry to the CA Intermediate Exam. Click – DIRECT Entry to the CA Intermediate.
CA Intermediate Exam is divided in following 2 groups and respective subjects –
Group I
Paper-1: Accounting (100 Marks)
Paper-2: Corporate Laws & Other Laws (100 Marks)
Part I: Company Law (60 Marks)
Part II: Other Laws (40 Marks)
Paper-3: Cost and Management Accounting (100 Marks)
Paper-4: Taxation (100 Marks)
Section A: Income-Tax Law (60 Marks)
Section B: Indirect Taxes (40 Marks)
Group II
Paper-5: Advanced Accounting (100 Marks)
Paper-6: Auditing and Assurance (100 Marks)
Paper-7: Enterprise Information Systems & Strategic Management (100 Marks)
Section A: Enterprise Information Systems (50 Marks)
Section B: Strategic Management (50 Marks)
Paper-8: Financial Management & Economics for Finance (100 Marks)
Section A: Financial Management (60 Marks)
Section B: Economics for Finance (40 Marks)
CA Inter is a subjective exam

The CA Inter Exam is for 800 marks and is divided into 2 groups. Each group has 4 subjects making in all 8 subjects. Each subject exam is conducted on separate days usually with a gap of one day in each exam.

A candidate aiming for the CA Inter Exam has an option to appear the exam group wise. If he wishes, he can appear for both the groups of CA Inter together or each group separately in different examinations. However, if a candidate is aiming for a rank in the CA Inter Exam, he should appear for both the groups together and not separately.

Students need to get a minimum of 40% marks in each subject and a minimum of 50 %marks in average in the complete one group of the CA Intermediate Exam. As such both the conditions should be satisfied for you to succeed the CA Intermediate Exam, 40% in every individual subject and 50% overall level. Please note that the overall 50% criteria is group wise. It is not for both the groups combined. In each group, the candidate should be able to score at least 50% marks overall and 40% marks in individual subject.

Four Weeks Integrated Course on Information Technology and Soft Skills (ICITSS) -

Besides, giving the CA Inter Exam, a candidate has to also undertake a compulsory IT and Soft Skills training. Details are produced hereunder –

  • Duration: 4 weeks (2 weeks each for soft skills and IT)
  • Training Schedule: Students registering for the Intermediate course shall be required to do ICITSS before the commencement of practical training (This Practical Training is the training of 3 years profoundly called as Articleship).
  • Assessment Test: An assessment test shall be conducted at the end of the course which the students have to qualify for being able to appear in the Intermediate examination.

As such only once a student successfully completes this training, he shall be allowed to write the CA Inter Exam.

Read – CA Intermediate Registration Procedure
Read – All Information for CA CPT


CA Intermediate Complete Course & Syllabus -


CA Inter Complete Syllabus for both the groups is mentioned below:

CA Intermediate Syllabus for Group 1

Paper 1 – Accounting (100 Marks)

(One paper of 3 hours)

Contents:

  • Process of formulation of Accounting Standards including Ind ASs and their convergence with International Financial Reporting Standards (IFRSs) and various other International accounting standard setting bodies.

  • Framework for Preparation and Presentation of Financial Statements as per Accounting Standards).

  • Accounting Standards:
    • AS 1 : Disclosure of Accounting Policies
    • AS 2 : Valuation of Inventories
    • AS 3 : Cash Flow Statements
    • 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 10 : Accounting for Fixed Assets
    • AS 11 : The Effects of Changes in Foreign Exchange Rates (Revised 2003)
    • AS 12 : Accounting for Government Grants
    • AS 13 : Accounting for Investments
    • AS 16 : Borrowing Costs
    • AS 17 : Segment Reporting
    • AS 22 : Accounting for Taxes on Income

  • Company Account:
    • Redemption of preference shares;
    • Redemption of debentures;
    • Accounting for bonus issue and right issue.
    • Accounting for tax: Concept of deferred tax asset and deferred tax liability in line with AS 22 “Accounting for Taxes”.
    • Managerial Remuneration
    • Preparation of financial statements – Statement of Profit and Loss, Balance Sheet and Cash Flow Statement,
    • Profit (Loss) prior to incorporation

  • Accounting for Special Transactions:
    • Investment Accounting
    • Insurance claims for loss of stock and loss of profit and
    • Hire-purchase and Instalment Sale Transactions

  • Special Type of Accounting –
    • Departmental Accounting
    • Accounting for Branches including foreign branches
    • Accounts from Incomplete Records

  • Dissolution of partnership firms including piecemeal distribution of assets; Amalgamation of partnership firms; Conversion of partnership firm into a company and Sale to a company; Issues related to accounting in Limited Liability Partnership.
    Note :
    If either a new Accounting Standards (ASs), Announcements and Limited Revisions to ASs are issued or the earlier one are withdrawn or new ASs, Announcements and Limited Revisions to ASs are issued in place of existing ASs, Announcements and Limited Revisions to AS, the syllabus will accordingly include / exclude such new developments in the place of the existing ones with effect from the date to be notified by the Institute of Chartered Accountants of India.

Paper 2 – Corporate and Other Laws (100 Marks)


(One paper of 3 hours)

Contents:


PART I – CORPORATE LAW (60 MARKS)

  • The Companies Act, 2013 – Sections 1 to 148
    • Preliminary
    • Incorporation of Company and Matters Incidental thereto
    • Prospectus and Allotment of Securities
    • Share Capital and Debentures
    • Acceptance of Deposits by companies
    • Registration of Charges
    • Management and Administration
    • Declaration and payment of Dividend
    • Accounts of Companies
    • Audit and Auditors

  • Note:
    The provisions of the Companies Act, 1956 which are still in force would form part of the syllabus till the time their corresponding or new provisions of the Companies Act, 2013 are enforced.


Part II- OTHER LAWS (40 Marks)


  • The Indian Contract Act, 1872: (Specific contracts covered from section 123 onwards): Contract of Indemnity and Guarantee, Bailment, Pledge, Agency

  • The Negotiable Instruments Act, 1881: Meaning of Negotiable Instruments, Characteristics, Classification of Instruments, Different provisions relating to Negotiation, Negotiability, Assignability, Right and Obligation of parties, presentment of Instruments, Rules of Compensation

  • The General Clauses Act, 1897: Important Definitions, Extent and Applicability, General Rules of Construction, Powers and Functionaries, Provisions as to Orders, Rules, etc. made under Enactments, Miscellaneous

  • Interpretation of statutes: Rules of Interpretation of statutes, Aids to interpretation, Rules of Interpretation/construction of Deeds and Documents
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. Similarly if any existing legislation ceases to have effect, the syllabus will accordingly exclude such legislation with effect from the date to be notified by the Institute.

As notified by the Institute: The specific inclusions/exclusions in the various topics covered in the syllabus will be effected every year by way of Study Guidelines, if required.


Paper 3 – Cost and Management Accounting (100 Marks)


(One paper of 3 hours)

Contents:


A. Overview of Cost and Management Accounting

  • Introduction to Cost and Management Accounting
    • Objectives and Scope of Cost and Management Accounting,
    • The users of Cost and Management accounting information- Functions of management accounting.
    • Role of cost accounting department in an organisation and its relation with other departments.
    • Installation of Costing System
    • Relationship of Cost Accounting, Financial Accounting, Management Accounting and Financial Management.
    • Cost terms and Concepts
    • Cost Reduction and Cost Control
    • Elements of Costs
    • Cost behavior pattern, Separating the components of semi-variable costs, step costs.
    • Methods of Costing, Techniques of Costing.
    • Cost Accounting with the use of Information Technology
    Elements of Cost and preparation of Cost Sheet
    • Functional classification and ascertainment of cost
    • Preparation of Cost Sheet for Manufacturing sector and Service sector

B. Ascertainment of Cost and Cost Accounting System

  • Material Cost
    • Procurement procedures- Store procedures and documentation in respect of receipts and issue of stock and the Stock verification,
    • Valuation of material receipts,
    • Inventory control covering following sub topics -
      • Techniques of fixing level of stocks- minimum, maximum, re-order point, safety stock, determination of optimum stock level,
      • Determination of Optimum Order quantity- Economic Order Quantity (EOQ),
      • Techniques of Inventory control- ABC Analysis, FSN, HML, VED, Just-in-Time (JIT)- Stock taking and perpetual inventory system, use of control ratios,
    • Inventory Accounting
    • Consumption- Identification with products of cost centres, Basis for consumption entries in financial accounts, monitoring consumption.
  • Employee Cost
    • Attendance and Payroll procedures-
      • Elements of wages- Basic wages, Dearness Allowance, Overtime, Bonus, Holiday and leave wages, Allowances and perquisites.
    • Employee/ Labour Cost Control
    • Employee Turnover- Methods of calculating labour turnover, causes of labour turnover, effects of labour turnover.
    • Utilisation of Human Resource, Direct and indirect employee cost, charging of employee cost, Identifying employee hours with work orders or batches or capital jobs.
    • Remuneration systems and incentive schemes-
      • Time Rate System, Piece Rate System, Differential piece rate system, Calculation of wages, Effective Wages.
  • Direct Expenses
    • Direct expenses and Direct Material
    • Nature of Direct or Chargeable expenses.
    • Sub-contracting- Control on material movements, Identification with the main product or service.
  • Overheads
    • Functional analysis- Factory, Administration, Selling, Distribution, Research and Development.
    • Behavioral analysis- Fixed, Variable, Semi- Variable and Step cost.
    • Allocation and Apportionment of overheads using Absorption Costing Method.
    • Factory Overheads- Primary distribution and secondary distribution,
    • Administration Overheads- Method of allocation to cost centres or products,
    • Selling & Distribution Overheads- Analysis and absorption of the expenses in products/ customers, impact of marketing strategies, cost effectiveness of various methods of sales promotion.
  • Concepts of Activity Based Costing (ABC).
  • Recording and Accounting of Costs
    • Non-integrated Accounting system- Ledger under non-integral system
    • Integrated Accounting system- Ledgers under integral system.
    • Relationship and difference between the Non- integrated Accounting system and Integrated Accounting system.
    • Reconciliation of Cost and Financial Accounts.

C. Methods of Costing

  • Single Output/ Unit Costing
  • Job Costing: Job cost cards and databases, collecting direct costs of each job, attributing overheads to jobs, Application of job costing.
  • Batch Costing: Determination of optimum batch quantity, Ascertainment of cost for a batch, Preparation of batch cost sheet, Treatment of spoiled and defective works.
  • Contract Costing
    • Ascertainment of cost of a contract, Progress payment, Retention money, Escalation clause, Cost plus contract, Value of work certified, Cost of Work not certified.
    • Determination Value of work certified, Cost of work not certified, Notional and Estimated profit from a contact.
  • Process/ Operation Costing
    • Double entry book keeping, Process loss, Abnormal gains and losses, Equivalent units, Inter-process profit,Valuation of work in progress.
    • Joint Products- Apportionment of joint costs, Methods of apportioning joint cost over joint products,
    • By-Products- Methods of apportioning joint costs over by-products, treatment of By-product cost in Cost
  • Costing of Service Sectors
    • Determination of Costs, Profit and Prices of services of following sectors/ Industries:Transport, Hospitals, Canteen/ Restaurants, Hotels/ Lodges, Schools/ Colleges, Financial Institutions/ Banks

D. Cost Control and Analysis

  • Standard Costing
    • Setting up of Standards, Types of Standards, Standard Costing as method of performance measurement.
    • Calculation of Variances-Material Cost Variance, Labour Cost Variance, Variable Overheads Variance, Fixed Overhead Variance and Sales Variances.
  • Marginal Costing
    • Basic concepts of marginal costing, Contribution margin, Break-even analysis, Break –even and profit volume charts, Contribution sales ratio, Margin of Safety, Angle of Incidence, Cost-Volume-Profit Analysis (CVP), Multi- product break- even analysis, Limiting factor (key factor),
    • Determination of Cost of a product/ service under marginal costing method, determination of cost of finished goods, work-in-progress,
    • Comparison of Marginal costing with absorption costing method- Reconciliation of profit under both the methods.
    • Short term decision making using the above concepts (basic level).
  • Budget and Budgetary Control
    • Meaning of Budget, Essentials of Budget, Budget Manual, Budget setting process, Preparation of Budget and monitoring procedures.
    • The use of budget in planning and control
    • Flexible budget, Preparation of Functional budget for operating and non operating functions, Cash budget, Master budget,
    • Introduction to Principal budget factor, Zero Based Budgeting (ZBB), Performance budget, Control ratios and Budget variances.
NOTE:

The relevant Cost Accounting Standards (CASs) as notified by MCA as per Companies Act 2013 will be complied with.

Paper 4 – Direct Tax Laws and Indirect Tax Laws (100 Marks)


(One paper of 3 hours)

PART I: DIRECT TAX LAWS (60 MARKS)
Contents:

  • Basic Concepts
    • Income-tax law: An introduction
    • Important definitions in the Income-tax Act, 1961
    • Basis of Charge and Rates of Tax
    • Concept of previous year and assessment year
  • Residential status and scope of total income
    • Residential status
    • Scope of total income
  • Incomes which do not form part of total income
    • Incomes not included in total income
    • Tax holiday for newly established units in Special Economic Zones
  • Heads of income and the provisions governing computation of income under different heads
    • Salaries
    • Income from house property
    • Profits and gains of business or profession
    • Capital gains
    • Income from other sources
  • Income of other persons included in assessee’s total income
    • Clubbing of income: An introduction
    • Transfer of income without transfer of assets
    • Income arising from revocable transfer of assets
    • Clubbing of income of income arising to spouse, minor child and son’s wife in certain cases
    • Conversion of self-acquired property into property of HUF
  • Aggregation of income; Set-off, or carry forward and set-off of losses
    • Aggregation of income
    • Concept of set-off and carry forward and set-off of losses
    • Provisions governing set-off and carry forward and set-off of losses under different heads of income
    • Order of set-off of losses
  • Deductions from gross total income
    • General provisions
    • Deductions in respect of payments
    • Specific deductions in respect of income
    • Deductions in respect of other income
    • Other deductions
  • Computation of total income and tax liability of resident Individuals
    • Income to be considered while computing total income of resident individuals
    • Procedure for computation of total income and tax liability of resident individuals
  • Provisions concerning advance tax, tax deducted at source and tax collected at source
    • Introduction
    • Direct Payment
    • Provisions concerning deduction of tax at source
    • Advance payment of tax
    • Interest for defaults in payment of advance tax and deferment of advance tax
    • Tax collection at source – Basic Concept
    • Tax deduction and collection account number
  • Provisions for filing return of income
    • Return of Income
    • Compulsory filing of return of income
    • Interest and Fees for default in furnishing return of income
    • Return of loss
    • Provisions relating to belated return, revised return etc.
    • Permanent account number
    • Persons authorized to verify return of income
    • Self-assessment

PART II – INDIRECT TAXLAWS (40 MARKS)
Contents:

  • Concept of indirect taxes –
    • Concept and features of indirect taxes
    • Principal indirect taxes
  • Goods and Service Tax (GST) Laws-
    • GST Laws: An introduction including Constitutional Aspects
    • Levy and collection of CGST and IGST –
      • Applicability of CGST/ IGST Law
      • Concept of supply including composite and mixed supplies
      • Charge of tax
      • Exemption from tax
      • Composition Levy
    • Basic concepts of time and value of supply
    • Input tax credit
    • Computation of GST Liability
    • Registration
    • Tax invoice, Credit and Debit Notes, Electronic way bill
    • Returns
    • Payment of tax including reverse charge

Note –
If any new legislation(s) is enacted in place of an existing legislation(s), the syllabus will accordingly include the corresponding provisions of such new legislation(s) in place of the existing legislation(s) with effect from the date to be notified by the Institute. Similarly, if any existing legislation ceases to have effect, the syllabus will accordingly exclude such legislation with effect from the date to be notified by the Institute. Students shall not be examined with reference to any particular State VAT Law. Further, considering that Goods and Services Tax may be implemented in India in near future, the syllabus will accordingly be modified to include the same with effect from the date to be notified by the Institute.

Consequential/corresponding amendments made in the provisions of the direct and indirect tax laws covered in the syllabus of this paper which arise out of the amendments made in the provisions not covered in the syllabus will not form part of the syllabus. Further, the specific inclusions/exclusions in the various topics covered in the syllabus will be effected by way of Study Guide before each examination.

CA Intermediate Syllabus for Group 2

Paper 5 – Advanced Accounting (100 Marks)

(One paper of 3 hours)

Contents -

  • Accounting Standards:
    • AS 7 : Construction Contracts
    • AS 9 : Revenue Recognition
    • AS 14: Accounting for Amalgamations
    • AS 18 : Related Party Disclosures
    • AS 19: Leases
    • AS 20 : Earnings Per Share
    • AS 24 : Discontinuing Operations
    • AS 26 : Intangible Assets
    • AS 29 : Provisions, Contingent Liabilities and Contingent Assets.
  • Application of Guidance Notes issued by the ICAI on various accounting aspects. (List provided below)
Company Accounts
  • Special Aspects of Company Accounts:
    • Accounting for employee stock option plan,
    • Buy back of securities
    • Equity shares with differential rights
    • Underwriting of shares and debentures
  • Reorganization of Companies:
    • Accounting for Amalgamation (excluding inter-company holding) and reconstruction
    • Accounting involved in liquidation of companies
  • Financial Reporting of Banking, Financial Services and Insurance,
    • Insurance Companies
    • Banking companies
    • Non-Banking Financial Companies
    • Mutual Funds
    And regulatory requirements thereof.
  • Valuation of goodwill
  • Consolidated Financial Statements
  • Concept of consolidation and simple problems on Consolidated Financial Statements with single subsidiary (excluding problems involving acquisition of Interest in Subsidiary at Different Dates; Different Reporting Dates; Disposal of a Subsidiary and Foreign Subsidiaries)

Note :

If either a new Accounting Standards (ASs), Announcements and Limited Revisions to ASs are issued or the earlier one are withdrawn or new ASs, Announcements and Limited Revisions to AS are issued in place of existing ASs, Announcements and Limited Revisions to AS, the syllabus will accordingly include / exclude such new developments in the place of the existing ones with effect from the date to be notified.

The specific inclusions/exclusions, in any topic covered in the syllabus, will be effected every year by way of Study Guidelines. The list of applicable Guidance Notes in Accounting will also form part of the Study Guidelines.

Paper 6 – Auditing and Assurance (100 Marks)

(One paper of 3 hours)

Contents:

  • Nature, Objective and Scope of Audit
    • Auditing Concepts: Nature, objective and scope of Audit; Relationship of auditing with other disciplines;
    • Standard Setting Process: Overview, Standard-setting process, Role of International Auditing and Assurance Standards Board (IAASB) & Auditing and Assurance Standards Board (AASB); Standards on Auditing, Guidance Note(s) issued by the ICAI;
    • Engagement Standards: Qualities of Auditor, Elements of System of Quality Control (SQC 1 Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information, and Other Assurance and Related Services Engagements); Ethical requirements relating to an audit of financial statements; Inherent Limitations of an audit (SA 200 Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Standards on Auditing); Preconditions for an audit; Audit Engagement; Agreement on Audit Engagement Terms; Terms of Engagement in Recurring Audits (SA 210 Agreeing the Terms of Audit Engagements); Leadership Responsibilities for Quality on Audits; Concept of Auditor’s Independence; Threats to Independence; Acceptance and Continuance of Client Relationships and Audit Engagements (SA 220 Quality Control for an Audit of Financial Statements).
  • Audit Strategy, Audit Planning and Audit Programme

    Audit Strategy; Audit planning (SA 300); Audit programme; Development of Audit Plan and Programme, Control of quality of audit work - Delegation and supervision of audit work; Materiality and Audit Plan; Revision of Materiality; Documenting the Materiality; Performance Materiality (SA 320 Materiality in Planning and Performing an Audit).

  • Audit Documentation and Audit Evidence

    Concept of Audit Documentation; Nature & Purpose of Audit Documentation; Form, Content & Extent of Audit Documentation; Completion Memorandum; Ownership and custody of Audit Documentation (SA 230 Audit Documentation); Audit procedures for obtaining audit evidence; Sources of evidence; Relevance and Reliability of audit evidence; Sufficient appropriate audit evidence, Evaluation of Audit Evidence (SA 500 Audit Evidence); Written Representations as Audit Evidence; Objective of Auditor regarding Written Representation; Management from whom Written Representations may be requested; Written Representations about Management’s Responsibilities (SA 580 Written Representations); Obtaining evidence of existence of inventory; Audit procedure to identify litigation & claims (SA 501 Audit Evidence - Specific Considerations for Selected Items); External confirmation procedures; Management's refusal to allow the auditor to send a confirmation request; Negative Confirmations (SA 505 External Confirmations); Audit evidence about opening balances; Accounting policies relating to opening balances; Reporting with regard to opening balances (SA 510 Initial Audit Engagements-Opening Balances); Meaning of Related Party; Nature of Related Party Relationships & Transactions; Understanding the Entity's Related Party Relationships & Transactions (SA 550 Related Parties); Meaning of Subsequent Events; Auditor's obligations in different situations of subsequent events (SA 560 Subsequent Events); Responsibilities of the Auditor with regard to Going Concern Assumption; Objectives of the Auditor regarding Going Concern; Events or Conditions that may cast doubt about Going Concern Assumption; Audit Procedures when events or conditions are identified (SA 570 Going Concern).

  • Risk Assessment and Internal Control:

    Audit Risk, Identifying and Assessing the Risk of Material Misstatement, Risk Assessment procedures; Understanding the entity and its environment; Internal control ,Documenting the Risks; Evaluation of internal control system; Testing of Internal control; Internal Control and IT Environment (SA 315 Identifying and Assessing the Risks of Material Misstatement Through Understanding the Entity and Its Environment); Materiality and audit risk (SA 320 Materiality in Planning and Performing an Audit); Internal audit, Basics of Standards on Internal Audit (SIAs) issued by the ICAI; Basics of Internal Financial Control and reporting requirements; Distinction between Internal Financial Control and Internal Control over Financial Reporting.

  • Fraud and Responsibilities of the Auditor in this Regard:

    Responsibility for the Prevention and Detection of Fraud; Fraud Risk Factors; Risks of Material Misstatement Due to Fraud; Communication of Fraud (SA 240 The Auditor’s responsibilities Relating to Fraud in an Audit of Financial Statements); Provisions of the Companies Act 2013 relating to fraud and rules thereunder including reporting requirements under CARO.

  • Audit in an Automated Environment:

    Key features, Impact of IT related Risks, Impact on Controls, Internal Financial Controls as per Regulatory requirements, Types of Controls, Audit approach, Understanding and documenting Automated environment, Testing methods, data analytics for audit, assessing and reporting audit findings.

  • Audit Sampling:

    Meaning of Audit Sampling; Designing an audit sample; Types of sampling; Sample Size and selection of items for testing; Sample selection method (SA 530 Audit Sampling).

  • Analytical Procedure:

    Meaning, nature, purpose and timing of analytical procedures; Substantive analytical procedures, Designing and performing analytical procedures prior to Audit; investigating the results of analytical procedures (SA 520 Analytical Procedures).

  • Audit of Items of Financial Statements:
    • Audit of sale of Products and Services; Audit of Interest Income, Rental Income, Dividend Income, Net gain/loss on sale of Investments etc.
    • Audit of Purchases, Employee benefits expenses, Depreciation, Interest expense, Expenditure on Power & Fuel, Rent, Repair to building, Repair to Machinery, Insurance, Taxes, Travelling Expenses, Miscellaneous Expenses etc.
    • Audit of Share Capital, Reserve & Surplus, Long Term Borrowings, Trade Payables, Provisions, Short Term Borrowings & Other Current Liabilities. Audit of Land, Buildings, Plant & Equipment, Furniture & Fixtures, Vehicles, Office Equipments, Goodwill, Brand/Trademarks, Computer Software etc. Audit of Loan & Advances, Trade Receivable, Inventories, Cash & Cash Equivalent, Other Current Assets. Audit of Contingent Liabilities.
      This list is an illustrative list only.

  • The Company Audit:

    Eligibility, Qualifications and Disqualifications of Auditors; Appointment of auditors; Removal of auditors; Remuneration of Auditors; Powers and duties of auditors; Branch audit; Joint audit; Reporting requirements under the Companies Act, 2013 including CARO; Other Important Provisions under the Companies Act, 2013 relating to Audit and Auditors and Rules made thereunder.


  • Audit Report:

    Forming an opinion on the Financial Statements; Auditor's Report- basic elements (SA 700 Forming an Opinion and Reporting on Financial Statements); Types of Modified Opinion; Circumstances When a Modification to the Auditor’s Opinion is Required (SA 705 Modification to the Opinion in the Independent Auditor’s Report); Qualification, Disclaimer, Adverse opinion (SA 706 Emphasis of Matter Paragraphs and Other Matter Paragraphs in the Independent, Auditor’s Report); Nature of Comparative Information; Corresponding Figure; Comparative Financial Statements (SA 710 Comparative Information – Corresponding Figures and Comparative Financial Statements).


  • Audit of Banks:

    Understanding of accounting system in Banks, Audit Approach, Audit of Revenue items, Special Consideration in Bank Audit with emphasis on Advances and NPAs.


  • Audit of Different Types of Entities:

    Appointment of Auditor, Audit Procedure. Audit Report in respect of different Category of Entities mentioned below: government; Local bodies and not-for-profit organizations; Partnership Firms, Audit of different type of undertakings, i.e., Educational institutions, Hotels, Clubs, Hospitals Basics of Limited Liability Partnerships (LLPs) audit and Co-operative Societies Audit.


Note:

  • The specific inclusions/exclusions, in any topic covered in the syllabus, will be effected every year by way of Study Guidelines.
  • The provisions of the Companies Act, 1956 which are still in force would form part of the syllabus till the time their corresponding or new provisions of the Companies Act, 2013 are enforced.
  • If new legislations/ Standards on Auditing/Guidance Notes/Statements 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. The changes in this regard would also form part of Study Guidelines.

Paper 7 – ENTERPRISE INFORMATION SYSTEMS AND STRATEGIC MANAGEMENT. (100 Marks)

(One paper of 3 hours)

Contents -

SECTION A : ENTERPRISE INFORMATION SYSTEMS (50 MARKS)

  • AUTOMATED BUSINESS PROCESSES
    • Introduction to Enterprise Business Processes, Benefits, Risks and Controls
    • Diagrammatic representation of business processes using Flowcharts
    • Risks and controls for specific business processes: Procure to pay (P2P), Order to cash, Inventory Cycle, Hire to Retire, Supply Chain Management, Fixed Assets etc.
    • Applicable regulatory and compliance requirements including computer related offences, privacy, cyber-crime, Sensitive Personal Data Information of Information Technology Act, 2000
  • FINANCIAL AND ACCOUNTING SYSTEMS
    • Integrated (ERP) and non-integrated systems with related risks and controls;
    • Business process modules and their integration with Financial and Accounting systems.
    • Reporting Systems and MIS, Data Analytics and Business Intelligence
    • Business Reporting and fundamentals of XBRL (eXtensible Business Reporting Language).
    • Applicable regulatory and compliance requirements
  • INFORMATION SYSTEMS AND ITS COMPONENTS
    • Components of Automated Information Systems: Application Systems, Database, Network and Operating System with related risks and controls.
    • Mapping of Organization structure with segregation of duties in Information Systems.
  • E-COMMERCE, M-COMMERCE AND EMERGING TECHNOLOGIES
    • Components and Architecture of E-Commerce and M-Commerce with related risks and controls
    • Business process flow with its related risks and controls
    • Applicable regulatory and compliance requirements
    • Emerging technologies with its related risks and controls
  • CORE BANKING SYSTEMS
    • Components and Architecture of CBS and related risks and controls
    • Core modules of banking and Business process flow and its related risks and controls
    • Reporting Systems and MIS, Data Analytics and Business Intelligence
    • Applicable regulatory and compliance requirements

SECTION B : STRATEGIC MANAGEMENT (50 MARKS)

  • Introduction to Strategic Management
    • Business Policy
    • Meaning and Nature of Strategic management
    • Business Strategy
    • Strategic Levels in Organizations
    • Strategic Management in Government and Not-for-profit organization
  • Dynamics of Competitive Strategy
    • Competitive Landscape
    • Strategic Analysis
    • Industry and Competitive Analysis
    • Core Competence
    • Competitive Advantage
    • Internal and External Analysis
    • SWOT Analysis
    • Globalization
  • Strategic Management Process
    • Strategic Planning
    • Strategic Intent - Vision, Mission and Objectives
    • Strategy Formulation
  • Corporate Level Strategies
    • Concepts and Nature of Corporate Strategy
    • Strategic Alternatives at Corporate Level
      • Growth
      • Stability
      • Expansion
      • Business Combinations – Mergers and Acquisitions
      • Strategic Alliances
      • Turnaround
      • Retrenchment and Retreat
  • Business Level Strategies
    • Competitive Strategies at Business Level
    • Michael Porter’s Generic Strategies
    • Best-Cost Provider Strategy
  • Functional Level Strategies
    • Marketing Strategy
    • Financial Strategy
    • Operations Strategy
    • Human Resource Strategy
    • Research and Development
  • Organisation and Strategic Leadership
    • Organisation Structure
    • Strategic Business Unit
    • Strategic Leadership
    • Strategy Supportive Culture
    • Entrepreneurship and Intrapreneurship
  • Strategy Implementation and Control
    • Strategy Implementation
    • Strategic Change
    • Strategic Control
    • Strategy Audit
    • Business Process Reengineering
    • Benchmarking

Paper 8 – FINANCIAL MANAGEMENT AND ECONOMICS FOR FINANCE. (100 Marks)

(One paper of 3 hours)
Contents -

SECTION A: FINANCIAL MANAGEMENT (60 MARKS)

    Financial Management and Financial Analysis
  • Introduction to Financial Management Function
    • Objective and scope of financial management
    • Role and purpose
    • Financial management environment
    • Functions of finance executives in an organization
    • Financial distress and insolvency.
  • Financial Analysis through Ratios
    • Users of the financial analysis
    • Sources of financial data for analysis
    • Calculation and Interpretation of ratios:
      • Analysing liquidity
      • Analysing leverage
      • Analysing solvency
      • Analysing efficiency/ activity
      • Analysing profitability
    • Limitations of ratio analysis
    Financing Decisions
  • Sources of Finance
    • Different Sources of Finance, Characteristics of different types of long term debt and equity finance, Method of raising long term finance
    • Different Sources of short term Finance
    • Internal fund as a source of finance
    • International sources of finance
    • Other sources of finance- Sale and lease back, Convertible debt, Venture capital, Grants etc.
  • Lease Financing
    • Concept and Classification
    • Significance and Limitations of Lease Financing
    • Financial Evaluation of Leasing Decision
  • Cost of Capital
    • Significance of cost of capital
    • Factors of cost of capital
    • Measurement of costs of individual components of capital
    • Weighted average cost of capital (WACC)
    • Marginal cost of capital
    • Effective Interest rate
  • Capital Structure Decisions
    • Significance of capital structure
    • Determinants of capital structure
    • Capital structure planning and designing
    • Designing of optimum capital structure
    • Theories of Capital Structure and value of the firm- relevancy and Irrelevancy of capital structure.
    • EBIT- EPS Analysis, Breakeven- EBIT Analysis.
    • Under/ Over Capitalisation.
  • Leverages
    • Types of Leverages- Operating, Financial and Combined
    • Analysis of leverages
    Capital Investment and Dividend Decisions
  • Capital Investment Decisions
    • Objective of capital investment decisions
    • Methods of Investment appraisal:
      • Payback period, Discounted payback period
      • Accounting Rate of Return (ARR),
      • Net Present Value (NPV) - The meaning of NPV, Strengths and limitations of NPV method, The impact of taxation on the NPV analysis, The impact of Inflation on the NPV analysis, The working capital adjustment in an NPV analysis, Capital rationing, Equivalent Annual Costs, Adjusted present value
      • Internal Rate of return (IRR)- Limitations of the IRR method, Multiple IRRs,
      • Modified internal Rate of Return (MIRR)- Definition and explanation of MIRR, The process for calculating MIRR, Strengths of the MIRR approach.
      • Profitability Index
  • Adjustment of Risk and Uncertainty in Capital Budgeting Decision
    • Probability Analysis
    • Certainty Equivalent Method
    • Risk Adjusted Discount Rate
    • Monte Carlo Simulation
    • Decision Tree Analysis
    • Scenario Analysis
    • Sensitivity Analysis
  • Dividend Decisions
    • Basics of Dividends
    • Forms of dividend
    • Determinants of dividend
    • Relevancy and Irrelevancy of Dividend Policies- Traditional Approach, Walter’s model, Gordon’s model, Modigliani and Miller (MM) Hypothesis.
    Management of Working Capital
  • Management of Working Capital
    • The management of working capital- Liquidity and Profitability
    • The Working capital financing decisions- Primary and Secondary Sources of Liquidity
    • The working Capital Cycle (operating Cycle), Effectiveness of Working Capital based on its operating and cash conversion cycles
    • Assessment of working capital requirement
    • Management of Accounts Receivables (Debtors)
    • Factoring and Forfaiting
    • Management of Accounts Payables (Creditors)
    • Management of Inventory
    • Management of Cash, Treasury management
    • Banking norms of working capital finance

SECTION B: ECONOMICS FOR FINANCE (MARKS: 40)

  • Determination of National Income
    • Macro Economic Aggregates and Measurement of National Income
    • The Keynesian Theory of Determination of National Income
  • The Money Market
    • The Concept of Money Demand: Important Theories of Demand for Money
    • The Concept of Money Supply
    • Monetary Policy
  • Public Finance
    • Fiscal functions: An Overview.
    • Market Failure
    • Government Interventions to Correct Market Failure
    • Fiscal Policy
  • International Trade
    • Theories of International Trade
    • Trade Policy – The Instruments of Trade Policy
    • Trade Negotiations
    • Exchange Rates and its economic effects
    • International Capital Movements: Foreign Direct Investment
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