Syllabus 2009 10

Contents
INTRODUCTION FOUNDATION
M odu le A
Paper A1 Functional English Paper A 2 Quantitative Methods 7 9
3 5
M odu le B
Paper B 3 Introduction to Economics and Finance Paper B 4 Introduction to Financial Accounting Paper B 5 Mercantile Law 12 15 19
INTERMEDIATE
Module C
Paper C 6 Financial Accounting Paper C 7 Taxation Paper C 8 Business Communication and Behavioural Studies
21
23 26 29
Module D
Paper Paper Paper Paper D D D D 9 Company Law 10 Cost Accounting 11 Auditing 12 Information Technology 32 34 37 40
FINAL
Module E
Paper E 13 Information Technology Management, Audit and Control Paper E 14 Advanced Accounting & Financial Reporting Paper E 15 Corporate Laws Paper E 16 Business Management
49
51 58 61 66
Module F
Paper Paper Paper Paper F F F F 17 18 19 20 Management Accounting Business Finance Decision Advanced Taxation Advanced Auditing 72 77 81 83
The Institute of Chartered Accountants of Pakistan
INTRODUCTION
The Institute of Chartered Accountants of Pakistan has tailored its syllabus keeping in view the latest developments in the accounting profession worldwide. The Chartered Accountancy courses do not only comprise of the core areas of accounting but also encompass other relevant areas such as taxation, law, business management, business finance decision and information technology. Therefore, our professionals are not only sound in technical knowledge but are also equipped with the right set of management skills to express their unique potential, exchange innovative ideas, disseminate prompt and accurate information and establish leading standards to achieve greater success in business. The syllabus booklet aims to explain these areas of study through a detail and precise description of syllabus of all subjects in the Foundation, Intermediate and Final Stage Examinations. This would define the study route that the student needs to follow to study fo his/her examinations. Students should be consciously aware of their learning abjective right from the start of their professional studies at the Foundation level. Similarly,. the teachers at all levels of studies for prospective Chartered Accountants should ensure that the learning outcomes of all syllabi are aimed not only towards awareness and completion of the subject but more importantly towards application in each and every area of the syllabus coverage.
LAYOUT OF THE BOOKLET Syllabus

The syllabus for each subject is bifurcated into: o Introduction o Indicative Grid o Contents Please note that the weightages given in the indicative Grid are for guidance purposes only and some deviations in setting of paper could be expected.
Recommended Reading
The individual syllabi are followed by a list of Recommended Reading which contains: o Reference Books o Supplementary Study Materials Students are advised to take caution while studying from Supplementary Study Material that the edition is latest and covers the syllabus contents.
F O U N D AT I O N
Challenges are what make life interesting; overcoming them what makes life meaningful.
(Joshau J. Marine)
Foundation Examination
Functional English
Module A
PA PE R A 1 : F u n c t io n a l E ng l is h (100 marks)
Objective
The objective of this syllabus is to help students communicate effectively in English language through proper usage of vocabulary & knowledge of English grammar.
Indicative Grid Syllabus Content Area

1. Vocabulary 2. Practical use of Grammar 3. Composition and Comprehension
Weightage
10 40 50
Total
Note:
100
The weightages given above are for guidance purposes only and some deviations in setting of papers could be expected.
Contents:
1. Vocabulary
a. Frequently confused words b. Frequently misused words c. Phrases, synonyms, antonyms, idioms d. General vocabulary
2. Practical Use of Grammar

a. Grammar i. ii. iii. iv. v. Nouns Pronouns Verbs Adjectives Adverbs vi. vii. viii. ix. x. Prepositions Conjunctions Articles Interjections Tenses b. Sentences i. ii. iii. iv. v. vi. vii. Types of sentences Parts of sentences Rules for structuring sentences Phrases Types and functions Clauses Types and functions Direct and Indirect Speech Active & Passive Voice
Functional English
c.
Punctuation Periods, Question Marks, Exclamation marks, Semicolons, Colons, Commas, Apostrophes, Quotation Marks
d. Writing Mechanics Capitals, Abbreviations
3. Composition and Comprehension

a. Story writing from outlines b. Letter writing (informal and formal) c. Prcis writing d. Essay writing e. Comprehension
Recommended Reading
PAPER A 1: Functional English

Book Name & Author
1. High School English Grammar & Composition by Wren and Martin. Learners Companion Series Vocabulary by George Davidson.
About the Book

This is a very useful book on grammar and composition and helps a lot in building a strong foundation for the language. These books are very useful on vocabulary and help immensely in vocabulary building.
2. 3. 4. 5.
Word Power Made Easy by Norman Lewis.
Understand & Communicate (book 2 and 3) published by FEP International (Pvt.)Ltd. Concepts (book 3 and 4) by P.C. Wren.
} }
These are very useful books on grammar and comprehension.
Supplementary Study Material

1. 2. 3. 4. Functional English Study Text and Revision Series by AT Foulks Lynch Pakistan. Functional English Study Text and Revision Series by Professional Business Publications (PBP). Prcis writing by R. Dhillon. Systems Student Companion English for lower secondary schools by Magdalene Chew & Surinder Kaur.
Quantitative Methods
Module A
PA PE R A 2 : Q u a n t it a t iv e M e t h o d s (100 marks)
Introduction
The role of an accountant has changed over the years; it has become imperative for him to have knowledge of various Mathematical and Statistical Techniques, which are being used in Financial Analysis and Decision Making. The latest research carried out in the above areas is mostly based on such techniques. The syllabus includes topics which the students will use not only in their later studies but throughout their career.
Objective
The objective of the course is to train the students in the use of Quantitative Techniques in business and finance. The students are required to gain thorough theoretical knowledge of the subject and understanding of the application of such knowledge.

M a the m at ic s 1. 2. 3. 4. Basic Mathematics Financial Mathematics Calculus Matrix and Determinants
Weightage
50
S ta ti s tic s 5. 6. 7. 8. Statistical Methods Methods of Least Square & Regression Probability & Probability Distribution Sampling & Decision Making 50
Total
Note:
100
Contents:
1. Basic Mathematics
Rates, ratios, percentages; discounts, markup, markdown; indices, exponential and logarithmic functions.Use of brackets, simplification rules, co-ordinate system, concept of equation, gradient, equation of straight line, application of straight line in business and economics; simultaneous equations; quadratic equations; factorization of equations including factorization by completion of squares, arithmetic progression and geometric progression.
2. Financial Mathematics
Simple interest, present and future values; discounting notes; bank discount; compound interest and annuities; sinking funds, present value; perpetuities; effective rate of interest. (Note: The students should be able to use both formulas as well as mathematical table)
3. Calculus
Techniques of differentiation; sum, difference, product and quotient rules of differentiation. Marginal function, calculation of revenue, cost & profit of marginal unit. Use of second order derivatives; maxima, minima and point of inflexion.
4. Matrix and Determinants

Addition, subtraction, multiplication, inverse of matrices. Solution of equations using matrix; inequalities, graphical presentation of inequalities; graphical method for linear programming; problems in graphical solutions such as no feasible solution, alternative optimum solution, unbounded solutions and redundant constraints.
5. Statistical Methods
Collection, presentation, tabulation, graphical presentation through graphs, charts and diagrams, stem and leaf display, box and whisker plot. Measures of central tendencies. Measures of dispersions. Index numbers, weighted index numbers, concept of purchasing power and deflation of income.
6. Methods of Least Square and Regression

Scatter diagram, linear relationship, simple linear regression lines by method of least square. Simple linear correlation, Coefficient of correlation, determination and interpretation. Rank correlation
7. Probability and Probability Distribution

Counting techniques, probability, addition law for mutually exclusive and not mutually exclusive events. Multiplicative laws for dependent and independent events. Binomial, Poisson, hypergeometric and normal distribution. (Note: The students should be able to use both formulas as well as mathematical tables)
8. Sampling and Decision Making

Simple random sampling, sampling distribution of mean, standard error of mean. Sampling with and without replacement. Testing of hypothesis for population mean, difference between population means,
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population proportion, difference between two population proportions, single population variance and test of association through z, t and Chi-square. Confidence interval for estimating population mean. Population and variance. Difference between means, proportion and difference between proportion and population variance. Problems of determination of sample size for the study of population mean and proportion. Note: Although the use of scientific calculators is allowed, the use of programmable calculators/ devices is not allowed. (Refer our website ww.icap.org.pk for list of permissible calculators)
Recommended Reading
PAPER A 2: Quantitative Methods

Book Name & Author Mathematics
1. 2. 2. 3. Mathematics for Business and Finance by Applied Mathematics for Business, Economics and Hamid A Hakeem the Social Sciences by Frank S. Budnick. Business Mathematics by M. M. Hasan and Mathematics M. A. Mirza for Business and Finance by Hamid A Hakeem. Business Mathematics by and Economics Mathematics for Business M. M. Hasan and M. Robert H. by A. Mirza. Nicholson. Mathematics for Business and Economics by Robert H. Nicholson. Its very useful almost all the topics of the Theabook covers book and cover mostwith topics of syllabus. easy examples and is a good question bank. The book is specifically written for students of The book covers almost all the topics the finance and management and covers with easy examples and entire syllabus.is a good question bank. The book is useful for Finance Mathematics. of book is specifically written for students finance and management and covers the entire syllabus. The book is useful for Financial Mathematics.
About the Book
4.
Business Statistics
5. 1. 2. 6. 7. 3. Introductory for Business Economics and The book covers almost all syllabus and is very Mathematics Statistics for and Finance by the entire the topics with Management by Hamid A Hakeem. Hamid A Hakeem useful covering theoretical as well as bank. easy examples and is a good questionpractical aspects of statistics. Business Mathematics by M. M. Hasan and The book is specifically written for students of M. A. Mirza Concepts and Methods by finance and management and covers the Statistics The book is very useful for conceptual Khursheed Alam. understanding entire syllabus. of statistics. Introduction for Business and Economics Mathematics to Statistics (Third edition) by The book is useful for Finance Mathematics.for: book is very useful especially Ronald E. H. Nicholson. by Robert Walpole. probability, normal distribution and hypothesis testing.

1. 2. Quantitative Methods Study Text and Revision Series by AT Foulks Lynch Pakistan. Quantitative Methods Study Text and Revision Series by Professional Business Publications (PBP).
11
Introduction to Economics & Finance
Module B
PA PE R B 3 : I n t r o d uc t io n t o E c o n o m ic s & F in a n c e (100 marks)
Introduction
The object of the course is to enable candidates to equip themselves with the main economic concepts and their use, relevance in economic analysis and as an introduction to the economic environment of trade, industry and banking as well as to methods of analysis relevant to the study of financial decisions.

1. Economic Concepts 2. Microeconomics 3. Macroeconomic
Weightage
10 40 50
Total
Note:
100
Contents:
1. Economic Concepts
a. b. c. d. e. f. Basic concepts; Natural resources, labour, capital and enterprise; Allocation of scarce resources production, distribution and consumption; Production possibility frontier and the opportunity cost; Key characteristics of market economy, planned economy and mix economy; Microeconomics and Macroeconomics.
2. Microeconomics
a) Concept of Market i. ii. iii. iv. v. vi. Market forces of demand and supply; Demand and supply; Equilibrium of demand and supply; Elasticity of demand and supply; Utility analysis and indifference curve; Consumer, producers and efficiency of market. b) Theory of the Firm i. ii. iii. iv. v. vi. Production function and isoquants; Cost, revenue and profits; Maximization of profits; Cost and revenue curves; Distinction between long run and short run assumptions; Equilibrium of firm under perfect competition, monopoly, oligopoly and monopolistic conditions.
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c) Factors of Production i. ii. iii. Laws of returns; Pricing of factors of production Marginal productivity theory.
3. Macroeconomics
a. National Income i. ii. iii. iv. v. vi. Circular flow of income; Measurement of national income including knowledge of basic concepts like GDP, GNP, NNP; Marginal propensity to consume and save; Consumption, saving and investment functions; Multiplier and accelerator; Equilibrium of national income;
b. Government and the Economy i. ii. iii. iv. v. c. Fiscal Budget Unemployment; Inflation; Growth, price stability and employment; Recession
Fiscal Policy i. ii. Direct and indirect taxation; Principles, methods and forms of taxation.
d. Money & Monetary Policy i. ii. iii. iv. v. vi. vii. e. Types of money; Value of money; Nature and functions of money; Definitions of banking, banking system and its institutions; Financial intermediaries; Role of State Bank; The supply of money and interest rate policy.
Capital Role of the money and capital markets.
f.
International Trade i. ii. iii. iv. v. vi. Trade and balance of payments; Foreign exchange rates (floating and fixed exchange rates) their nature, function and determination; Trade and its determinants; Markets and demand for imports and exports; Open Economy (Basic concept) Introduction to World Trade Organization
13
Recommended Reading
PAPER B 3: Introduction to Economics and Finance

Book Name & Author
1. 2. 2. 3. 3. 4. Mathematics for Business by K. K. Dewett. Modern Economic Theory and Finance by Hamid A Hakeem
About the Book
The book covers all topics of syllabus, with covers almost all the topics written in simple and plain is a good It is especially easy examples and language. question bank. useful for micro economics. Business Mathematics by M. M. Hasan and The book is specifically written for students of Introduction M. A. Mirza to Economics & Finance by The book management written for ICAPs finance and is specificallyand covers the Abdul Haleem Khawaja. entire syllabus. students and contains all syllabus areas. It is especially recommended for macro economics. Mathematics for Business and Economics The book is useful for Finance Mathematics. Economics by Samuelson by Robert H. Nicholson. and Nordhaus. The book covers almost all topics of syllabus in detail. Macro Economics by Paul Crompton, Michael Swann, Sandra Hopkins, William A. McEachen. The Monetary and Financial System by David Goacher. This book covers the entire syllabus contents and includes case study questions which will help students in studying the subject with a practical point of view. The book discusses all the relevant topics at an introductory stage in simple language.
5.

1. 2. 3. 4. Introduction to Economics & Finance Study Text and Revision Series by AT Foulks Lynch Pakistan. Introduction to Economics and Finance Study Text and Revision Series by Professional Business Publications (PBP). First Principles of Economics: by Richard G Lipsey and Colin Hardbury. Stanlakes Introductory Economics: by SJ Grant.
14
Introduction to Financial Accounting
Module B
PA PE R B 4 : I n t r o d uc t io n t o F i n a n c ia l Ac c o un t i n g (100 marks)
Objective
The objective of this course is to enable candidates to understand fundamentals of accounting theory; apply theory to basic financial accounting and prepare accounting statements of sole proprietorships and partnerships. To develop knowledge and understanding of financial statements and the techniques used to prepare financial statements including necessary underlying records.

1. Introduction to business and accounting theory 2. Financial accounting practices 3. Receipt and payment accounts, income and expenditure accounts and preparation of accounts from incomplete records 4. Other specialized areas
Weightage
10 35 20
35
Total
Note:
100
Contents:
1. a) Introduction to business and accounting theory i. Definition and scope of business; ii. Economic setup of business; iii. Organization structures; Q Sole proprietorship; Q Partnership (its merits and demerits); Q Limited Companies (their advantages and disadvantages); iv. Types of finances including Q Long term finance; Q Short term finance;
15
v. vi. vii. viii. ix.
Commercial Banks; Stock Exchange Insurance Companies; Procurement and production of goods; Marketing and sales;
x.
Marketing channels; Q Sole Distributors; Q Wholesalers and; Q Retailers.
b) Accounting Theory i Fundamental accounting concepts including: Q Q Q Q Q Q Q Q Accrual basis Consistency True and fair view Materiality Prudence Completeness Going Concern Substance over form ii Financial statements; Q Q Q Q iii Components Responsibility Presentation Users of financial statements;
Asset valuation alternatives; Q Q Q Q Historical cost; Fair value; Net realizable value; Replacement cost;
2. Financial accounting practices

a) Accounting Records Petty cash book and imprest system; Cash books (including transactions with banks and their documentation); iii. Sales journal and the sales ledger; iv. Purchase journal and the purchase ledger; v. General journal; vi. General ledger vii. Computerized Accounting b) Introduction to Double Entry i. ii. iii. iv. v. vi. Double entry System, Accounting Equation and Rules of Debit & Credit Concept of capital and revenue expenditure; Concept of liability and income Effect of profit or loss on capital; Balancing of accounts; Trial balance; i. ii. c) Adjustments before Final Accounts Methods and recording of depreciation on Fixed Assets; ii. Provisions for bad debts/ write off; iii. Provisions for discounts on debtors; iv. Prepayments and accruals; v. Inventory adjustments vi. Bank reconciliation and related adjustments; vii. Control accounts reconciliation and adjustments viii. Errors in trial balance ix. Suspense accounts x. Other adjustments; d) The Final Accounts of Sole Traders & Partnership i. ii. iii. Statement of financial position Statement of comprehansive income Cash flows statements i.
16
3. Receipt and payment accounts and accounts from incomplete records

a) b) c) Receipt and payment accounts; Income and expenditure accounts; Preparation of accounts from incomplete records.
4. Other specialized areas

a) Accounting for inventories (IAS-2) i ii iii iv Cost formulas (LIFO/ FIFO/ weighted average cost); Cost of inventories (cost of purchase, cost of conversions, other costs); Measurement of inventories (lower of cost or Net realizable value); Presentation of inventories in financial statements.
(Note: Cost Ac co un ting t ec hniqu es will no t be te ste d at th is sta ge )
b) Accounting for property, plant and equipment (IAS-16) i ii iii iv Initial measurement of property, plant & equipment (components of cost, exchange of assets); Subsequent costs; Depreciation Unit of measure, depreciable amount, depreciation period and depreciation method Derecognition
c) Branch accounts (excluding foreign branches); d) Treatment of the following in partnership accounts: i ii iii Admission; Retirement / death of partner (excluding life insurance policies, annuities etc); Goodwill.
Note:
Reference to IAS shall be deemed to have been changed whenever the same is replaced by a new reporting standard.
17
Recommended Reading
PAPER B 4: Introduction to Financial Accounting

Book Name & Author
1. 2.
About the Book
Accounting The Basis of Business The book is very useful for conceptual Decisions by Meigs William Haka Bettner. understanding. Modern Accountancy Mukherjee & Hanif. (Volume 1) by The book covers substantial part of the syllabus and is very useful for: final accounts of sole traders and partnership, receipts and payments accounts, accounts from incomplete records, branch accounts, and syllabus topics of partnership.
3.
Business Accounting by Frank wood and The book contains almost all syllabus areas Alan Sangster. and is recommended for: accounting theory, financial accounting practices, branch accounts, syllabus topics of partnership etc. Gripping IFRS Vol.I published by ICAP. Chapters related to inventories (IAS-2) and fixed assets (IAS-16) may be studied from this book.
4.
5.
Framework for the preparation and The book contains detailed material including presentation of financial statements and background, rationale and practical examples International Accounting Standards(1, 2 of various topics included in the syllabus. and 16) issued by IASB and is published by ICAP as IFRS Bound Volume 1.

1. 2. Introduction to Financial Accounting Study Text and Revision Series by AT Foulks Lynch Pakistan. Introduction to Financial Accounting Study Text and Revision Series by Professional Business Publications (PBP).
18
Mercantile Law
Module B
PA PE R B 5 : M e r c a n t i le L a w (100 marks)
Objective
The syllabus aims to enable the students to develop a professional approach towards matters connected with Mercantile Law in the performance of their duties as Chartered Accountants.

1. Introduction to legal system 2. Contract Act 1872 3. Partnership Act 1932 4. Negotiable Instruments Act 1881 5. Sale of Goods Act 1930 6. Trust Act 1882 7. Carriage of Goods by Sea Act 1925
Weightage
40 30
30
Total
Note:
100
Contents:
1. Introduction to Legal System
Sources of law; process of legislation; and the legal system in Pakistan
5. Sale of Goods Act 1930

All Sections
2. Contract Act 1872

All sections
6. Trust Act 1920

Duties and Liabilities of Trustees; Rights, powers and liabilities of the beneficiary; Revocation of Trust
3. Partnership Act 1932

All Sections
7. Carriage of Goods by Sea Act 1925

All Sections
4. Negotiable Instruments Act 1881

All Sections
19
I N T E R M E D I AT E
Clear your mind of cant

(Samuel Johnson)
Intermediate Examinations
Financial Accounting
Module C
PA PE R C 6 : F i na nc ia l Ac c ou n t i n g (100 marks)
Objective
This course is designed to provide understanding of accounting methods and procedures as followed by business organizations. It systematically covers the accounting process of classification, summarization, presentation in the light of established accounting practices and application of principles set out by International Accounting and Reporting Standards in the preparation of financial statements. The course is built on the basic accounting techniques covered in Paper B 4 and is designed to develop and broaden the knowledge and understanding of more financial accounting concepts.

1. Accounts of limited companies 2. Specialized accounting treatments 3. Other accounting and reporting issues
Weightage
25 40 35
Total
Note:
100
Contents:
1. Accounts of limited companies
a) Accounting and preparation of Financial Statements of limited companies in line with the requirement of the Companies Ordinance, 1984 and International Financial Reporting Standards (referred to at the end of syllabus); (excluding liquidation. reconstruction, merger and consolidation); b) Significant accounting ratios and their relationship.
2. Specialised accounting treatments

a) Accounting for Income Taxes i ii iii Current year tax; Prior years tax; Deferred tax.
23
b) Accounting treatment of tangible and intangible assets including their recognition, derecognition, depreciation / amortization and subsequent remeasurement (revaluation, impairment, fair value etc); c) Accounting treatment of contingent losses and contingent gains; d) Related party disclosures; e) Revenue Recognition
3. Other accounting and reporting issues

a) Conversion of partnerships to a limited company and merger of firms; b) Accounting treatment of profit and loss for the period including: i Changes in accounting policies; ii Changes in accounting estimates and errors; iii Events occurring after the balance sheet date; c) Recognition of borrowing costs. d) Accounting for leases
The IFRS included in Syllabus are:

IAS 1 IAS 12 IAS 24 IAS 2 IAS 16 IAS 36 IAS 7 IAS 17 IAS 37 IAS 8 IAS 18 IAS 38 IAS 10 IAS 23
Note:
1. 2. 3. All items included in the syllabus of Introduction to Financial Accounting paper of Module B may again be tested in the above paper. To encourage proper understanding and application of knowledge no questions requiring word by word reproduction of contents of IASs \ IFRS will be asked. Reference to local and international pronouncements shall be deemed to have been changed whenever the same is replaced by a reporting standard.
24
Intermediate Examinationss
Recommended Reading
PAPER C 6: Financial Accounting

Book Name & Author
1. 2. 3. Gripping IFRS Vol.I published by ICAP. Gripping IFRS Graded Question published by ICAP. Framework for preparation and presentation of financial statements and International Accounting Standards (listed in syllabus) published by ICAP as IFRS Bound Volume 1. IFRS Practical Implementation Guide and Workbook (Wiley Series) by Abbas Ali Mirza, Graham J. Holt and Magnus Orrell (Relevant topics). Companies Ordinance, 1984; (Fourth & Fifth Schedules and provision related to preparation of accounts of limited companies). The following books by Javed H. Zuberi: i. Company Accounts ii. Preparation and interpretation of financial statements iii. Cash Flow Statements iv. Accounting for leases
About the Book

The book contains useful material on various IASs/IFRS with examples. The book contains useful question bank on various IASs/IFRS. The book contains detailed material including background, rationale and practical examples of various topics included in syllabus.
4.
It contains interpretation of IFRS with practical examples.
5.
Preparation of financial accounts of a limited company is regulated by the Companies Ordinance 1984 and therefore it is necessary to study it to understand the disclosure requirements. Each book explains the concerned topic in context of accounting treatment prescribed by IASs.
6.

1. 2. 3. Financial Accounting Study Text and Revision Series by AT Foulks Lynch Pakistan. Financial Accounting Study Text and Revision Series by Professional Business Publications (PBP). Published financial statements of listed companies.
25
Taxation
Module C
P AP ER C 7 : T a x a t i o n (100 marks)
Objective
The aim of this paper is to develop basic knowledge and understanding in the core areas of Income Tax and its chargeability as envisaged in the Income Tax Ordinance 2001 and the Income Tax Rules 2002 (relevant to the syllabus), Sales Tax Act 1990 and the Sales Tax Rules (relevant to the syllabus).

1. In co me T ax
a. Basic concepts of taxation b. Heads of income, Computation of income, Determination of tax liability c. Types of persons and their taxation d. Procedures and Administration e. Income Tax Rules 2002
Weightage
15 40 10 10
2. Sales T ax
Prescribe chapters of Sales Tax Act and Rules. 25
Total
100
Note: a. Finance Act / Ordinance, Notifications and circulars issued within a period of less than 4 months from the date of examination shall not be tested b. Chapters, Parts and Divisions not mentioned here specifically are excluded from the syllabus. However, it is clarified to eliminate any ambiguity that if only a chapter is mentioned it includes all parts and if only a part is mentioned it includes all divisions. c. The weightages given above are for guidance purposes only and some deviations in setting of papers could be expected. d. Students are not expected to remember the tax rates. Same if applicable shall be given in the question paper.
26
Taxation
Contents:
1. Income Tax Ordinance 2001
a Basic concepts of taxation i. ii. iii. Chapter I Chapter II Chapter IV Preliminary (concepts of terms defined) Charge of tax (excluding section 7) Common rules (Part I & II)
b. Heads of income, Computation of income, Determination of tax liability i. ii. iii. iv. c. Chapter III Chapter IX Chapter X Part V Chapter XII Tax on taxable income (excluding Sec 29A, 30 & 31) Minimum tax Advance tax and deduction of tax at source Transitional Advance Tax provisions
Types of persons and their taxation i. ii. iii. iv. Chapter Chapter Chapter Chapter V Part I V Part II - Div I V Part III VII Part II Central concepts Individuals Association of persons Taxation of foreign-source income of residents
d. Procedures and Administration i. ii. iii. iv. v. vi. e. Chapter Chapter Chapter Chapter Chapter Chapter X Part I X Part II X Part III X Part IV X Part VIII XI Part I Returns Assessments Appeals including Alternative Dispute Resolution Collection and recovery of tax (Sections 137 to 140) Audit (Section 177) Administration General (excluding section 224 to 227)
Income Tax Rules 2002
The rules related to the above chapters of the Income Tax Ordinance 2001 shall also be examined
2. Sales Tax Act 1990

i. ii. iii. iv. v. Chapter Chapter Chapter Chapter Chapter I II III IV V Preliminary (concepts of terms defined) Scope and payment of tax Registration Book keeping and invoicing requirements Returns
Q Q Q Q
vi. The following rules (excluding annexure and forms) of the Sales Tax Rules 2006 related to the relevant chapters of the Sales Tax Act may be examined. Rules other than the following shall not be examined at this stage: Chapter Chapter Chapter Chapter I II III IV Registration, Voluntary registration and De-registration Filing of returns Credit and Debit Note and Destruction of Goods Apportionment of Input Tax
27
Taxation
Recommended Reading
PAPER C 7: Taxation
Book Name & Author
1. 2. Complete Income Tax Law by S. A. Salam. Law & Practice of Income tax by Dr. Ikram-ul-Haq.
3. 4. 5.
Sales Tax Ready Reference by S. A.Salam. Synopsis of taxation by Mirza Munawar Hussain. Pakistan income tax law Principles and Practice by Mian Safiullah & Kashif Aziz Jahangiri.
About the Book

Bare Act, Rules, Notifications; Circulars etc. on syllabus topics are included in these books with brief explanations. Bare Act, Rules, Notifications; Circulars etc. on syllabus topics are included in the book with brief explanations. These books are very useful for understanding practical application of taxation.
6.
Khalid Petiwalas Notes Income Tax and Sales Tax.
The book provides summarized notes to the students which will help them at the time of revision. The book also includes practical Questions and original income tax ordinance and rules & sales tax act and rules.
28
Business Communication & Behavioural Studies
Module C
PAPE R C 8 : Bu s ine s s C om m un ic at io n & Be h av io ur a l S tu di es (100 marks)
Objective
The course aims to introduce students to the key concepts of business communication and their application. The course also intends to incorporate an understanding of the concepts of organizational behaviour to develop problem solving skills, negotiation skills and leadership qualities in the students.

1. Principles of Effective Business Communication 2. Communication methods and skills 3. Organizational Behavior
Weightage
25 40 35
Total
Note:
100
Contents:
1. Principles of Effective Business Communication
a. Introduction i ii. iii. Concepts and benefits of effective communication Components of communication including effective listening Problems of communication
b. Basic Principles of Business Communication Seven Cs of effective communication c. Interpersonal Communication (IPC) i. ii. iii. Universals of IPC Axioms of IPC Types of IPC
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2. Communication Methods and Skills

a. Business Messages i. ii. iii. iv. v. vi. vii. viii. ix. Planning before communication Basic organizational plans Appearance and design Letters to customers Circular letters Job application and Curricular Viatea (Rsum) Good news messages & bad news messages Persuasive messages Business letters, memos, faxes and e-mail
b. Meetings Preparation of Agenda, Notice and Minutes of meetings c. Report and proposal writing i ii. iii. Short report Long report Proposals
3. Organizational Behaviour (OB)

a. Introduction i. ii. iii. Approaches to Organizational Behaviour Definitions and characteristics of OB Challenges faced by the management Globalization, Information Technology, Diversity and Ethics
b. Organizational processes i. ii. iii. c. Organizational structure & design (principles of organization, different ways of structuring organization) Organizational Change (nature of change process, resistance to change) Organizational culture (concept, dysfunctional aspect of culture)
Individual Behaviour i. ii. iii. iv. Perception Attitude Job Satisfaction Job Stress
30
d. Motivation i. ii. iii. iv. v. Types of Motivation Theories of Motivation Applications Job Design Goal setting and Management by Objectives (MBO) Management by Exception (MBE)
e. Leadership i. ii. iii. iv. Type of Leadership Theories of Leadership Applications Roles, Activities, Skills of Leaders Group Dynamics and teamwork (types of groups, group formation, group structure, individual in groups, team work)
f. Conflict and Negotiation i. ii. iii. iv. Levels of Conflict Conflict Resolution Negotiation & Stages of Negotiation Peculiar Negotiation Situations
Recommended Reading
PAPER C 8: Business Communication and Behavioural Studies

Book Name & Author
1. The Effective Business Communication by Herta A Murphy, Herbert Hildebrandt, Jane P. Thomas. Organizational Behavior by Stephen P. Robbins.
About the Book

The book covers substantial part of the syllabus area of business communication.
2. 3.
Organizational Behavior by Fred Luthans.
These are very useful books for understanding the theoretical and practical aspects of organizational behavior.

1. 2. Business Communication and Behavioral Study Text and Revision Series by Professional Business Publications (PBP). Business Communication and Behavioral Study Text and Revision Series by AT Foulks Lynch Pakistan.
31
Company Law
Module D
P AP E R D 9 : C O M PA N Y LA W (100 marks)
Objective
This course aims to provide candidates with knowledge of the Companies Ordinance, 1984 and to develop amongst them an understanding of their application to corporate and other business environment, excluding advanced topics such as provisions relating to arbitration, arrangements and reconstruction, prevention of oppression and mismanagement, winding up etc. that are covered at the Final Examination stage.

1. The Companies Ordinance, 1984 Sections 1 to 51 2. The Securities and Exchange Commission of Pakistan Act, 1997 3. The Companies Ordinance, 1984 Sections 52 to 136 4. The Companies Ordinance, 1984 Sections 142 to 262
Weightage
20
25 55
Total
Note:
100
Contents:
1. a. b. c. d. e. The Compani es Or dinanc e, 1984 Se ctions 1 to 51 Part I; Preliminary (concepts of terms defined) Part II; Jurisdiction of courts Part III; Section 12 and Section 13 Part IV; Incorporation of companies and matters incidental thereto First schedule to the Companies Ordinance, 1984
32
Company Law
2. 3.
The Se curi ti es a nd Ex cha nge Commis sion of P ak is ta n Act, 1997 The Compani es Or dinanc e, 1984 Se ctions 52 to 136
a. Part V; Prospectus, allotment, issue and transfer of shares and debentures, deposits, etc. b. Part VI; Share capital and debentures. c. Part VII; Registration of mortgages, charges etc. 4. The Compani es Or dinanc e, 1984 Se ctions 142 to 262
a. Part VIII Management and Administration (excluding investigation & related matters) b. Third Schedule to the Companies Ordinance, 1984
Recommended Reading
PAPER D 9: Company Law

Book Name & Author
1. 2. Complete Company Law S. A. Salam (Relevant topics). Practical Approach to the Companies Ordinance, 1984 by Nazir Ahmed Shaheen (Relevant topics).
About the Book

Bare Law and brief explanation thereon are included in the book. The book is useful for understanding practical application of law.

1. 2. Company Law Study Text and Revision Series by A T Foulks Lynch Pakistan. Company Law Study Text and Revision Series by Professional Business Publications (PBP).
33
Cost Accounting
Module D
PA PE R D 10 : Co s t A c c o u nt in g (100 marks)
Objective
The course is designed to equip candidates with fundamentals of accounting for material, labour and manufacturing expenses; an understanding of the importance of the role of cost accounting in planning and controlling the wide range of organizational and manufacturing cost. The students are expected to acquaint themselves with a comprehensive knowledge of established practices of cost accumulation methods and learn the application of this knowledge to basic planning, control and decision making. The course also covers job order, process costing and standard costing systems.

1. Cost Concepts, Uses and Classification 2. Elements of Cost Accounting i. material ii. labour iii. overhead 3. Costing Systems 4. Cost Behaviour 5. Planning and Control 6. Decision Making
Weightage
40
30 30
Total
Note:
100
Contents:
1. Cost Concepts, Uses and Classification
a. The nature and scope of Cost Accounting; Sources of Cost data b. Definition of and distinction between financial accounting, cost accounting and management accounting c. The concept of Cost for different types of entities d. Cost classification
34
Cost Accounting
2. Elements of Cost Accounting

a. Material i. ii. iii. iv. Material purchasing, receiving and issuing procedures and its documentation Inventory recording system (Perpetual and Periodic) Basis of valuation Cost formulas Stock taking, Reconciliation of Bin Card and Stock Card, and adjustments for inventory differences v. Valuation of inventory at lower of Cost and NRV vi. Economic Order Quantity and Inventory Levels vii. Segregation of material for selective control (ABC Plan) b. Labour i. ii. iii. iv. v. c. System and documentation Basis for Labour Cost Control Labour turnover, Productivity and Efficiency measurement Accounting entries for payroll and statutory deductions Wage incentive plans (piece work plan, bonus and group bonus plans)
Overheads i. ii. iii. iv. Manufacturing expenses actual and applied Over or under applied overhead Concept of production & Service Departments Basis of apportionment and allocation of service department overheads to production department
3. Costing Systems
a. b. c. d. e. f. g. h. Fundamentals of Cost Accounting Information System Manufacturing Cost Accounting Cycle Chart of accounts Factory Ledger and accounting entries Reconciliation of Cost and Financial accounts Job order Costing Process costing Treatment of Joint Products and By-Products
4. Cost Behaviour
a. b. c. d. e. f. Analysis of fixed, variable and semi variable expenses Direct cost and Indirect cost Cost estimation using high-low points method and linear regression analysis Marginal costing and Absorption costing Product cost and Period cost Breakeven analysis and charts
35
Cost Accounting
5. Planning and Control

a. b. c. d. e. f. Principles of Budgeting Cash Budgets Revenue Budgets Flexible Budgets Projected Income statement and Balance Sheet Standard Costing concepts
6. Decision Making
a. b. c. d. e. f. g. Opportunity Cost Relevant Cost Make or buy decisions Pricing for special orders Further processing decisions Utilization of spare capacity Decision with limiting factors (excluding linear programming)
Recommended Reading
PAPER D 10: Cost Accounting

Book Name & Author
1. Cost Accounting, Planning and Control by Matz and Uzry.
About the Book

The book covers almost all the parts of the syllabus and ensures concept building by giving examples on related topics especially good for variances analysis and process costing. The book covers almost all the parts of the syllabus and ensures concept building by giving a variety of questions for each topic. It is a very useful book especially for theoretical aspects of costing.
2.
Management and Cost Accounting by Colin Drury. Cost accounting by T. Lucey.
3.

1. 2. Cost Accounting Study Text and Revision Series by A T Foulks Lynch Pakistan. Cost Accounting Study Text and Revision Series by Professional Business Publications (PBP).
36
Auditing
Module D
PA PE R D 11 : Au d it i ng (100 marks)
Objective
The purpose of the syllabus is to give students theoretical and to a limited extent, technical knowledge and skills of auditing and review of historical financial information. It will provide a foundation for acquiring intensive knowledge required for professional competence. The syllabus will ensure that candidates are able to understand the nature of auditing and review services and are familiar with the intellectual and procedural bases for performing them.

1. General concepts & principles of audit 2. Performance of audit 3. Audit conclusions and reporting 4. Specific areas
Weightage
25 35 20 20
Total
Note:
100
Contents:
1. General concepts and principles of audit
i. ii. iii. iv. v. vi. vii. Objective and general principal governing an audit Responsibility for the financial statements Auditors responsibility to consider fraud and errors Introduction to International Federation of Accountants Introduction to international auditing and assurance standard setting body Legal consideration relating to appointment and removal of auditor Acceptance and continuance of audit client including requirement of Code of Ethics issued by ICAP viii. Audit engagements
37
Auditing
Recommended Reading
PAPER D 11: Auditing

Book Name & Author
1. International Standards on Auditing, International Framework for Assurance Engagements and International Standards on Review Engagement issued by IAASB & IAPC and published by ICAP as Handbook. (ISAs and ISRE mentioned in syllabus). Code of Ethics for Chartered Accountants issued and included in Handbook given at (1) above. Companies Ordinance, 1984.
About the Book

The book covers all topics of syllabus except for Laws and Regulations contained in Companies Ordinance, 1984. It contains detailed material including background, rationale and practical examples of each subject of the syllabus. Part B of the Code covers the topics of client acceptance and continuance procedure. Provisions related to Appointment, Removal, Report etc. of auditor of limited companies are also governed by the Companies Ordinance 1984.
2.
3.
4. 5.
Advanced Auditing by Dr. Khawaja Amjad Saeed. Practical Auditing by Javed H. Zubairi.
These books contain almost all syllabus areas and explain various topics in context with the ISAs.

1. 2. Auditing Study Text and Revision Series by A T Foulks Lynch Pakistan. Auditing Study Text and Revision Series by Professional Business Publications (PBP).
39
Information Technology
Module D
PA PE R D 12 : I n f o rm a t io n T e c h n o lo g y (100 marks)
Objective
The objective of this syllabus is to provide the students with adequate knowledge of the following areas and their applications with particular reference to business and finance: a. b. c. d. e. f. Computer hardware and software. Important elements and concepts of information systems. Basic principles of computer programming Computer software application. IT Security and controls . Practical experience on performing various general procedures and use of standard packages

1. Computer Hardware and Related Matters 2. Information Systems 3. Computer Programming and Software Applications 4. System Development and Internal Controls 5. Computer Practical Examination
Weightage
10 10 20 20 40
Total
Note:
100
Contents:
1. Computer Hardware and Related Matters:
1.1 Parts and accessories of computer i. Recent developments in computer hardware
1.2 Networking i. ii. iii. Networking components Network configuration and design Types of networks iv. Use of communication devices vi. Transmission medium vii. Network administration and controls
40
2. Information Systems:
a. Fundamentals of Information Systems i. ii. General system concepts System architectures
b. Organizational Information Systems i. ii. iii. iv. v. vii. viii. ix. c. Information flow in an organization Management Information System Transaction Processing Systems Financial reporting systems Order processing and inventory control systems Personnel systems Sales and marketing systems Integrated systems
Commonly used ERPs
d. Knowledge Based Systems i. ii. iii. e. Decision Support System (DSS) Executive Information System (EIS) Expert System (ES)
Transaction processing in business and accounting applications i. ii. iii. iv. v. vi. vii. viii. ix. x. xi. General application processing Data entry/ capturing / editing Master file update Reporting and queries Processing modes Batch processing On-line processing Real time processing Distributed processing Multi tasking Multi processing
3. Computer Programming and Software Applications:

a. Introduction to Computer Programming Basic principles and concepts of program writing b. Flow Charts i. ii. Benefits and limitation of flowcharts Types of flowcharts
41
c.
Decision Tables i. ii. Benefits and limitation of decision tables Types of decision tables
d. Computer Aided Software Engineering (CASE) Types of CASE tools, their applications and advantages e. Operating System Introduction to commonly used operating systems including DOS, Windows, Novell NetWare, Unix and Linux f. Utility Software Compression utilities, disk maintenance utilities, antivirus programs and audio and video software etc., their features, benefits and limitations g. Communication Software Features, benefits and limitations of Internet browsers, email software, chatting programs, telephony via Internet and video conferencing etc. h. E-Commerce
Basic concepts covering:

i. ii. iii. iv. v. vi. Current trends in e-commerce E - commerce Tools and technologies Electronic data capture Publishing systems Communication systems E-commerce services for example electronic trading, online banking and online information services etc. vii. Electronic Payment Systems viii. Payment options ix. Security technologies i. Web Hosting and Surfing i. ii. iii. Website hosting Downloading software from web Use of search engines
42
4. Introduction to System Development and Control Activities

a. Systems Development Life Cycle (SDLC) i. ii. iii. iv. v. Feasibility study based on investigation and analysis of existing systems Structured systems analysis, planning, designing and implementation Evaluation and control of Information Systems and needs Documentation Post implementation review
b. Data organization and access Methods i. ii. iii. c. Data structures and file organizations Access methods and file maintenance Types of data files
Database Management System (DBMS) Introduction to commonly used DBMS like Oracle and SQL Server etc. (their characteristics, advantages and limitations)
d. Control Activities
Introduction to:
i. ii. iii. iv. e. Control design General controls Preventive, detective and corrective controls Audit trails
Control over Data Integrity, Privacy, and Security i. ii. iii. iv. v. Logical access controls Physical access controls Program security techniques Data security and public networks Monitoring and surveillance techniques
f.
Disaster Recovery Planning i. ii. iii. iv. Threat and risk management Software and data backup techniques Alternative processing facility arrangements Disaster recovery procedural plan
43
Computer Practical Examination
5. Computer Practical Examination

ICAP will conduct a practical examination of 2 hours duration to test hands on experience covering 40% credit of the course. Theory paper of Information Technology will cover 60%. The result shall be based on the combined marks obtained at practical and theory examinations. The computer practical examination will be held soon after the Intermediate examination.
Contents:
M icr oso ft Win do ws and Inter net
a. Window s A cce ss orie s
i. ii. iii. System Tools Communication & Entertainment Accessibility
b. c.
Window s K ey board S hortcuts Ba sic Netw orking Ta sks

i. ii. Sharing drives, folders and devices Protecting files and folders on a network
d.
Cor e Window s Tas ks

i. ii. iii. iv. v. Customizing Desktop and Start Menu Working with files and folders Managing Windows Logging on and off Searching for information
e.
Pr ote cting your c ompute r

i. ii. iii Locking the computer Screen Saver password Password reset disk
f. g.
Window s F irew a ll Inte rnet

i. ii. iii. iv. v. Internet browsing Making a dial-up connection Internet explorer Commonly used Internet search engines and web based email services Voice and video chatting
44
M icr oso ft Excel

a. Orga nizing and Ana ly zi ng Da ta
i. ii. iii. iv. v. vi. vii. Construction and application of customised formulas Application of advanced filters Performing data analysis using automated tools Creating PivotTable and PivotChart reports Application of built in functions and formulas Use of Tools menu commands like Goal Seek and Formula Auditing etc Defining, modifying, and using named ranges
b.
For ma tti ng Da ta and C onte nts

i. ii. iii. Creating and modifying customised data formats Using conditional formatting Formatting charts and diagrams
c.
S ha ring a nd S ec urity
i. ii. iii. iv. Protecting cells, worksheets, and workbooks Sharing workbooks Merging workbooks Tracking, accepting, and rejecting changes to workbooks
d.
Mana ging D ata and Wor kbook s

i. ii. Importing and exporting data to and from Excel Creating and editing templates
e.
C us tomi zi ng Ex ce l
i. ii. Customizing toolbars and menus Creating, editing, and running macros
M icr oso ft Wor d

a. For ma tti ng C ontents
i. ii. iii. Creating custom styles for text, tables, and lists Inserting and modifying objects Creating and modifying diagrams and charts using data from other sources
b.
Orga nizing Contents

i. ii. iii. iv. Sorting contents in lists and tables Performing calculations in tables Modifying table formats Preparing letters, labels and envelopes using mail merge tools
c.
For ma tti ng Doc uments

i. ii. iii. Creating and modifying document background Creating and modifying document index and table of contents Inserting and modifying endnotes, footnotes, captions, and cross-references
45
d.
Ma naging Wor d Documents

i. ii. iii. iv. v. Application of Track Changes tool Publishing and editing Web documents Managing document versions Protecting and restricting documents Ways of viewing a Word document
e.
Cus tomizing Mic rosoft Word

i. ii. Creating, editing, and running macros Customizing menus and toolbar
M icro soft P ower Poi nt

a. Cre ating Conte nts
i. ii. iii. Creating new presentations from templates Inserting and editing text-based contents Inserting and editing tables, charts, diagrams, pictures, shapes, graphics and objects
b.
Formatting Conte nts

i. ii. iii. iv. v. vi. vii. Formatting text-based contents Formatting pictures, shapes, and graphics Formatting slides Applying animation schemes Applying slide transitions Customizing slide templates Working with slide master
c.
Ma naging a nd De liv eri ng P re se nta ti ons

i. ii. iii. iv. v. vi. vii. Tracking, accepting, and rejecting changes in a presentation Adding, editing, and deleting comments in a presentation Comparing and merging presentations Setting up slide shows for delivery Rehearse timing Printing slides, outlines, handouts, and speaker notes Exporting a presentation to another Microsoft Office program
Micr oso ft Access

a. S tr ucturing Da ta bas es
i. ii. iii. iv. Creating and modifying tables Defining and modifying field types Creating and modifying one-to-many relationships Creating and modifying queries, forms and reports
46
b.
Mana ging Databa ses

i. ii. iii. iv. v. vi. Entering, editing, and deleting records Importing and exporting data to and from Access Compacting and repairing databases Creating and modifying calculated fields and aggregate functions Sorting records Filtering records
Micr oso ft Pr oj ect

a. Tas k Mana gement
i. ii. iii. iv. v. vi. vii. viii. Defining the project Defining general working times Listing the tasks in the project Organizing tasks into phases Scheduling tasks Linking to or attaching more task information Adding columns of customised information Setting deadlines and constraints
b.
Re sourc e Manage ment

i. ii. iii. iv. v. Specifying resources (people and equipment) for the project Defining working time and availability of resources Assigning resources to tasks Linking to or attaching more resource information Adding columns of customised information
c.
P roje ct Tr ac king
i. ii. iii. iv. Saving a baseline to compare with later versions Incorporating progress information into the project Checking the progress of the project Tracking risks and issues associated with a project
d.
V iew and Repor t P roje ct Status

i. ii. iii. iv. Selecting and modifying views and reports Viewing critical tasks, allocation of resources and project costs Sharing project information with other applications Changing the look or contents of the Gantt chart
Mi cr o so ft Outl oo k / Ou tlo ok E xpr ess

a. Mes sagi ng
i. ii. iii. iv. v. Originating and responding to e-mails and instant messages Attaching files to messages Creating and modifying a personal signature for messages Modifying e-mail message settings and delivery options Creating and editing contacts
47
b.
Sc heduling
i. ii. iii. Creating and modifying appointments, meetings, and events Customizing calendar settings Creating, modifying, and assigning tasks
Orga nizing
i. ii. iii. Creating and modifying distribution lists Linking contacts to other items Creating and modifying notes
Recommended Reading
PAPER D 12: Information Technology

Book Name & Author
1. Management Information Systems Strategy and Action by Charles Parker and Thomas Case. Management Information Systems by Gerald Gerald V. Post and David L. Anderson. Management Information Systems (Sixth edition) by James A. O Brien.
About the Book

The book is useful for understanding management information systems. The book contains adequate material on MIS, networking, database management systems and e-business for CA Intermediate students. The book gives good explanation of MIS, networking and e-business solutions along with real world case studies. The book contains useful material on various types of information systems, system development life cycle, e-commerce, fundamentals of computer programming and computer aided software engineering.
2.
3.
4.
System Analysis and Design by Kenneth E. Kendall and Julie E. Kendall.

1. 2. Information Technology Study Text and Revision Series by A T Foulks Lynch Pakistan. Information Technology Study Text and Revision Series by Professional Business Publications (PBP).
3. Computers by Larry Long and Nancy Long.
48
FINAL
There are two ways to meeting difficulties: You alter the difficulties, or you alter yourself to meet them
(Phylis Bottome)
Final Examination
Information Technology Management, Audit and Control
Module E
P AP E R E 1 3: I nf or m a t io n T e c h n o lo g y M a n a g e m e nt , A u di t a n d C on t r o l (100 marks)
Introduction
This sy llabus aim s to p rovid e: a. b. c. Essential body of IT knowledge related to business information systems. IT security, control and governance knowledge related to business information systems. Application of knowledge to manage the above and evaluate IT.
The Case studies in ICAP study material for this syllabus are designed to assist the students in enhancing their knowledge and skills in: Managerial role; Evaluator role; Enterprise resource planning; and Electronic Commerce. Case studies / scenario based questions will be set in the examination.
Contents:
1. IT Strategy and Management
Broad know ledg e / sk ill area IT strategy M ain t opic cov erag e Strategic considerations in IT development Illus trat ive sub -top ics Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Planning of information systems based on business success factors/criteria Position of the entity within its industry/sector Alignment/integration with business objectives/success factors Risks: economic, technical, operational, behavioral Components of long range plans Operational dynamics that influences the entitys business/programs Business to Consumer (B2C) Business to Business (B2B) Business to Employee (B2E) Consumer to Consumer (C2C) Government to Citizen (G2C) Developing operational priorities Compatibility of computers Planning IT capacity Impact of IT on procedures Data/information architecture IT infrastructures (hardware, facilities, networks)
E-Business models
Management of IT
Management of computer operations
51
Final Examination
Q Q Management of interorganizational computing Q
Software (systems, applications, utilities) Performance measurement (productivity, service quality) Collaborative computing Distributed system EDI and electronic commerce Outsourced services (ISPs, ASPs, etc.) Technology diffusion Information center, help desk End-user system security Support for end-user applications Capital budget Time/expense tracking Cost charge out / monitoring Accounting for system costs Effectiveness, efficiency, economy of operations Reliability of financial reporting Effectiveness of controls (design, operation) IT asset safeguarding Compliance with applicable laws and regulations System reliability: Availability and continuity (back-up, recovery) Access controls (physical, logical) Processing integrity (completeness, accuracy, timeliness, authorization) Data integrity Supply chain management (SCM) Enterprise resource planning (ERP) Sales force automation (SFA) Customer relationship management (CRM) Electronic commerce systems: Brochure, catalog, order entry, payment processing, fulfillment Knowledge management systems Knowledge creation, capture, sharing, maintenance Managing Information Technology Planning for Business Impact Acquisition of Information Technology The Implementation of Information Technology Solutions IT service Delivery and Support Executive Checklist.
Management of end-user computing Financial analysis and control
Q Q Q Q Q Q Q Q Q Q Q Q Q Q
IT control objectives
Software
E-business enabling software
Q Q Q Q Q
IFAC Guidelines / discussion papers
Q Q Q Q Q
52
Final Examination
2. Information Technology Security, Control and Management

Broad k nowled ge / s kill area Control frameworks Main top ic coverage I llust rativ e s ub-t opics Error, fraud, vandalism/abuse, business interruption, competitive disadvantage, excessive cost, deficient revenues, statutory sanctions, social costs, etc. Effect of IT audit on organization, controls Economic, technical, operational, behavioral considerations Cost/benefit COBIT, ITCG, SysTrust, WebTrust, etc Cost effectiveness of control procedures
Risks and exposures in Q computer-based information systems Q
IT control frameworks Control objectives Effectiveness, efficiency, economy of operations Reliability of financial reporting
Q Q
Relevance, reliability, comparability / consistency At a point in time; during a period of time Evaluation of facilities management and IT asset safeguarding Prevention/detection of fraud, error and illegal acts Privacy, confidentiality, copyright issues Availability and continuity (back-up, recovery) Access control (physical, logical) Processing integrity (completeness, accuracy, timeliness, authorization) Completeness, accuracy, currency / timeliness, consistency/comparability, authorization, auditability, Input /output; reception/distributic controls Attitudes, laws and regulations Board level, management level, IT administrative /operational level Hardware, facilities, network System, application User departments, individual user Board, top management IT management and IT personnel User departments, individuals Auditors
Effectiveness of control Q (design, operation) IT asset safeguarding Compliance with applicable laws and regulations System reliability Q Q Q Q Q Q Q Q Layer of control Societal Organizational Q environment Technology infrastructure Software Q Business process Q Role and responsibilities of key parties Q Q Q Q
Data integrity
Responsibility for control
53
Final Examination
Control environment
External regulatory controls
Record keeping, privacy, copyright, taxation, etc, Regulatory compliance, fiduciary obligations, IT governance, system reliability Integrity and ethical values, commitment to competence Leadership for IT organization, organization of IT function, segregation of incompatible IT and user functions, partnership with other organizations Business practices, codes of conduct, documentation of systems, operations, user responsibilities, reporting relationships Strategic planning, business system/IT integration planning, budgeting, performance measurement, monitoring, compliance with policies Hiring, training, evaluation, compensation of IT personnel, career paths Budgeting process; Cost charge out methods; Economic, technical, operational behavioral Main reason for failure of computer Projects Error, fraud , vandalism/abuse, business interruption, competitive disadvantage, excessive cost, deficient revenues, statutory sanctions, social costs, etc. Quantitative / qualitative Monetary, non-monetary Balancing costs of controls vs. costs of unmitigated risks
Board/audit committee Q governance Management philosophy and operating style Plans/structure of organization Q Q
Q Method to communicate the assignment of authority and responsibility Management control methods Q
Human resource policies and practices Financial policies and practices Risk Assessment Risk Categories
Q Q Q Q
Probability of loss Consequences
Q Q Q
54
Final Examination
Control activities
Control design
Q Q Q Q Q Q Q
Objectives, framework, environment, activities, monitoring Legal, ethical, professional standards/requirements Preventive/detective /corrective strategies Effective control environment (personnel management methods) Preventative application controls Detective application controls Contingency plans, insurance Authorization Separation of incompatible functions (organizational design, user identification, data clarification, user/function/data authorization matrix, user authentication) Adequate documents and records Asset safeguards; limitation of access to assets Independent check on performance; verification of accounting records, comparison of accounting records with assets Computer-dependent controls (edit, validation, etc.) User controls (control balancing, manual follow-up, etc.) Audit trails Error identification/investigation /correction / tracking Understanding of data protection legislation Consideration of personnel issues and confidentiality Classification of information Access management controls Physical design and access control Logical access control (user authorization matrix) Network security (encryption, firewalls) Program security techniques Monitoring and surveillance techniques Threat and risk management software and data backup techniques (problems of on-line systems, etc.) Alternate processing facility arrangements Disaster recovery procedural plan, documentation
Control procedures
Q Q
Q Q Q Q Q Q Q Control over data integrity, privacy and security Q Q Q Q Q Q Q Q Q Control activities Availability / continuity Q of processing, disaster recovery planning and Q control Q
55
Final Examination
Q Q Q IS processing /operations Q
Integration with business continuity plans Periodic tests of recovery procedures Insurance Planning and scheduling; service levels; Risks Standards Infrastructure (hardware, facilities, networks) Software Human resources (skill sets and staffing level) Business processes Performance monitoring Costs / benefits (quantitative and qualitative impact on management Jobs and office procedures) Business drivers that impact IT (e.g., scalability, rightsizing, flexibility of change in technology) or business, speed to market, cross-platform capability) Control over productivity and service quality Software /data library management Input/output distribution and control Security and backup, and recovery Internal monitoring processes Performance review processes External monitoring processes Processes for addressing-non-compliance Familiarisation with: System analysis and documentation (e.g., flowcharting package, review of program logic, etc.) System /program testing (e.g., test data ,integrated test facility, parallel simulation etc.), Data integrity testing (e.g., generalized audit software, utilities, custom programs, sampling routines, etc.) Problem solving aids (e.g. spreadsheet, database. Online data bases, etc) Administrative aids (e.g., word processing, audit program generation, work paper generators etc).
Q Q Q
Q Q Q Q Monitoring of control compliance Roles of management, users, auditors (internal, external) Q Q Q Q Q
Computer assisted audit techniques
56
Final Examination
Recommended Reading
PAPER E 13: Information Technology Management, Audit and Control

Book Name & Author
1. Information Systems Control and Audit by Ron Weber.
About the Book

The book is useful for gaining the understanding of information systems audit function. Management and application control framework have been explained in an effective manner. Ways to collect and evaluate the audit evidence are also explained in the book in detail. The book is useful for the topic of strategic management of information system. The book explains the fundamentals of information systems audit, business continuity management and the application of CAATs in an effective manner.
2.
Strategic Management & Systems by Wendy Robson.
Information
3.
Auditing in a Computerized Environment by Mohan Bhatia.

1. 2. 3. 4. 5. Information Technology Management, Audit and Control Study Text and Revision Series by A T Foulks Lynch Pakistan. Information Technology Management, Audit and Control Study Text and Revision Series by Professional Business Publications (PBP). Information Technology Management Audit & Control by Mohammad Amjad Bhatti and Muhammad Qaiser Sheikh. International Information Technology Guidelines developed by IFACs IT Committee, available at IFACs website. Useful information is also available at the website: www.isaca.org.
57
Final Examination
Advanced Accounting & Financial Reporting
Module E
PA PE R E 1 4 : A dv a n c e d Ac c o un t i n g & F in a n c i a l R e p o rt in g (100 marks)
Introduction
The purpose of this syllabus is to prepare the students to appreciate prevailing financial regulatory environment and to apply the knowledge gained to practical situations for arriving at pragmatic solutions. Students will be expected to be aware of the requirements of the International Accounting Standards (IASs) and International Financial Reporting Standards (as and when issued) as applicable in Pakistan and their application to practical situations and the informational needs of different users of accounts. Students will be expected to analyse, interpret and explain the commercial activities of an organisation as shown by its financial statements. The emphasis will be on the presentation, interpretation and use of data. Students should be able to prepare financial statements for complex business arrangements (e.g. reorganisations, demergers, business combinations, dissolutions, etc.) in accordance with applicable statutory disclosure requirements. Students will be expected to be familiar with the preparation of the financial statements of enterprises engaged in specialised industries. The students should be able to demonstrate an integrated knowledge of Financial Reporting. The students are encouraged to be abreast of current accounting and financial issues. The examinees are expected to possess profound understanding of the subject over and above what they have learnt at the Foundation and Intermediate stages. Topics examined at the earlier stages may or may not be directly re-examined here, however, examinees would need to utilise knowledge and skills learnt at an earlier stage. Case studies / scenario based questions will be set in the examination.

1. a. Financial Statements and Reporting b. International Financial Reporting Standards and Statutory Requirements 2. Specific Accounting Areas 3. Analysis of Financial Statements 4. Specialised Financial Statements
Weightage
30
45 15 10
Total
Note:
100
58
Final Examination
Contents:
1 a. Financial Statements and Reporting
i. ii. iii. iv. v. vi. vii viii. Preparation of financial statements including consolidated financial statements and their disclosure. Accounting for investments in subsidiaries and associated undertakings Financial reporting on interests in joint venture Interim financial reporting Reporting on discontinued operations Preparation of statutory and directors report Related party transaction Segment reporting
b. International Financial Reporting Standards (IFRSs) and Statutory Requirements Recognition, measurement, accounting treatment and disclosure of various transactions and items in accordance with the requirements of IFRSs and their interpretations issued by International Accounting Standards Board (IASB) and International Financial Reporting Interpretations Committee (IFRIC) respectively, adopted by the Institute of Chartered Accountants of Pakistan. ii. Accounting treatments and disclosure requirements under the Companies Ordinance, 1984 iii. Specific departures from IFRSs under the local statutory requirements i.
2. Specific Accounting Areas

a. b. c. d. e. f. g. h. Accounting of taxes on Income Accounting for leases Accounting for construction contracts Retirement benefits costs and pension plans Foreign currency transactions Business combinations Accounting for Investments Accounting treatment on changes in accounting policies and estimate including fundamental errors i. Recognition and measurement of financial instruments j. Valuation of intangible assets k. Impairment of assets l. Provisions and contingencies m. Revenue recognition
3. Analysis of Financial Statements

a. Needs of various users of financial statements and its importance b. Techniques for analysis i. Horizontal and vertical analysis ii. Ratio analysis iii. Common-size statements c. Earning per share (EPS) d. Business and share valuations
59
Final Examination
4. Specialized Financial Statements

a. Banks b. Leasing companies c. Insurance companies d. Mutual funds and similar enterprises e. Employee benefit plans
Recommended Reading
PAPER E 14: Advanced Accounting & Financial Reporting

Book Name & Author
1. 2. 3. 4. International Financial Reporting Standards (IFRS) Published by ICAP. Gripping IFRS Vol. 1 published by ICAP. Gripping IFRS Graded Question published by ICAP. Companies Ordinance 1984.
About the Book

It is the primary source and explains the topics with illustrations and appendices. Contains useful material on various IASs and IFRSs with examples. Contains questions for practice on various IASs and IFRSs. Schedule IV and V covers disclosure requirements for listed public companies and unlisted companies repectively. Contains disclosure requirements for financial statements of insurance and banking companies. The book contains detailed material and many practical examples of topics included in syllabus. Gives in-depth understanding of accounting issues in context with the IFRS and international pronouncements. The concepts built by Interpretation of IFRS series are further explained with practical examples. Reading and understanding of these published information will help in the preparation of these specialized financial statements.
5.
Insurance Ordinance 2000 and Banking Companies Ordinance 1962. IFRS Interpretation and Application of International Accounting and Financial Reporting Standards (Wiley Series) by Barry J. Epstein and Abbas Ali Mirza. IFRS Practical Implementation Guide and Workbook (Wiley) by Abbas Ali Mirza, Graham J. Holt and Magnus Orrel. Published Financial Statements of Leasing Companies, Mutual Funds, Banks and Insurance Companies.
6.
7.
8.

1. 2. 3. 4. Q Q Advanced Accounting & Financial Reporting Study Text and Revision Series by A T Foulks Lynch Pakistan. Advanced Accounting & Financial Reporting Study Text and Revision Series by Professional Business Publications (PBP). Selected Opinions and Technical Releases (Accounting). The websites of following audit firms provides free online financial reporting tools for. understanding IFRS. The links can be viewed from the e-learning section of ICAPs website: Deloitte IFRS e-learning EY Resource for IFRS Q Q KPMG issues and insight PWC research and publications
60
Final Examination
Corporate Laws
Module E
PA PE R E 1 5 : C or p o r a t e L a w s (100 marks)
Introduction
The syllabus aims to provide the knowledge and understanding of corporate and other relevant laws, rules and regulations and to familiarize with the secretarial practices including the knowledge of handling various matters usually expected to be performed by the secretary of a corporate entity. Case studies / scenario based questions in addition to descriptive Questions will be set in the examination. The examinees are expected to possess detailed knowledge of the Companies Ordinance 1984 over and above what they have learnt at the Intermediate stage. Topics examined at the Intermediate stage may or may not be directly re-examined here, however, examinees would need to utilize knowledge and skills learnt earlier. The knowledge required for Companies Rules would also be comprehensive but for other Laws and regulations only general knowledge would suffice.

1. Companies Ordinance, 1984 2. Various Rules under the Companies Ordinance 3. Secretarial Practices 4. Other laws and regulations
Weightage
40 30 15 15
Total
Note:
100
Contents:
1. Companies Ordinance, 1984
a. Areas of the Companies Ordinance, 1984 covered at Module D Examination in Company Law Paper.
In the Corporate Laws paper at Final level, students should have a more in-depth knowledge and understanding of those parts of the Companies Ordinance, 1984 which were covered in the Company
61
Final Examination
Corporate Laws
f. f. g. g. h.
NBFC Rules issued by SECP on April 01, 2003, Chapters I and Schedules I & IV only.IV only. NBFC Rules issued by SECP on April 01, 2003, Chapters I to III and Schedules I & Regulation 25 of the Non-banking Finance Companies and Notified Entities Regulations, 2008. Regulation 25 of d Non-banking Finance Companies and Notified Entities Regulations, 2008.
Schedule IX (Fit and Proper Criteria) and Schedule X (Long, Medium and Sort Term Financing Facilities) of the Non-Banking Finance Companies and Notified Entities Regulations 2008.
3. Secretarial practices
Floatation of shares and securities including prospectus, offer for sale and convertible securities, stock exchange listing rules, underwriting, brokerage, etc.; and discount and premium on shares; application and allotment of shares, issue of share certificates and bonus and right shares and transfer and transmission of shares of companies, investigation and dividend. a. b. c. Filing requirements, maintenance of statutory books and registers under the Companies Ordinance, 1984. Meetings of shareholders and directors and all proceedings thereto, including notices, agenda, quorum, voting, poll, proxies, resolutions and minutes. Functions and responsibilities of the Securities and Exchange Commission of Pakistan under the SECP Act (Act No. XLII of 1997).
4. Other laws and regulations

a. Foreign E xchang e Reg ulations - Foreig n Ex change Manual 8th E dit ion i. Chapter XIX Loans, overdrafts and guarantees Part A: Rupee loans Foreign exchange regulations relating to definition of foreign controlled companies, provisions for general permission for lending to foreign controlled companies for working capital, local borrowings by foreign controlled companies for capital expenditure. Part B: Foreign private loans Private foreign currency loans, repatriable foreign currency loans by foreign controlled companies for meeting working capital requirements, foreign currency loans (repatriable and non-repatriable basis) by Pakistani firms and companies functioning in Pakistan. ii. Chapter XX - Securities Knowledge and application of provisions relating to rules and regulations governing acquisition and holding of foreign securities, issue, transfer and export of Pakistani securities to non-residents, general exemption from the restriction on transfer and issue of Pakistani securities to non-residents, procedure for issue of shares to non-residents, trading of quoted shares by non-residents, and special instructions regarding shares transferred under the Central Depository System - CDS of the Central Depository Company b. Stock Exchange Listing Rules and Guidelines - especially those relating to secretarial matters, public issue of shares, Code of Corporate Governance and Transfer Pricing.
63
Final Examination
Corporate Laws
Laws gov erning certain s pecializ ed inst itut ions c. Banking Companies Ordinance, 1962 - Sections pertaining to audit and accounts, mainly sections 34 to 38 of the Banking Companies Ordinance, 1962.
d. The Central Depositories Act, 1997 and Central Depository Companies (Establishment and Regulation) Rules 1996 - Understanding of provisions relating to: i. ii. Central Depository System; and Effect of the Central Depository on provisions of the Companies Ordinance, 1984 relating to interalia, sending of notices to members, registration of transfers, payment of dividend, maintenance of register of members, issue of bonus and right shares and effect on the rights of members.
e.
Mod araba C omp anies and M odarab as (Floatat ion and Cont rol) Ordinance, 1980. i. Q Q Q ii. Q Q Q Q Provisions relating to the following: Definitions (Section 2) Registration of Modaraba Companies (Section 4 to 6) Provisions applicable to Modaraba (Section 7 to 23,33,37,41 and 42) Modaraba Companies and Modaraba rules, 1981 Rules 2 to 4,7 to 13,16 to 20-B,23 and 25 to 28 First Schedule (Form no.1,9 and 11 including annexures) Third Schedule Fourth Schedule (salient features of matter to be specified in prospectus and reports to be set out therein)
f.
The Insurance Ordinance, 2000 provisions relating to statutory and special audits and maintenance of accounts, mainly sections 45 to 49, 51 and 52 and the Securities and Exchange Commission (Insurance) Rules 2002 including regulations and Format accounts. Broad understanding of the Code of Corporate Governance for listed and unlisted insurance companies.
g. The Securities and Exchange Ordinance 1969 and the Securities and Exchange Rules, 1971 provisions pertaining to issuance of shares and securities to the general public (mainly section 9 ) and Insider Trading. h. Com pet ition Ordinance and Reg ulations The following topics will be covered: i. Competition Ordinance 2007 Chapter - I Preliminary Chapter - II Prohibition of abuse of dominant position, certain agreements, deceptive marketing practices and approval of mergers. Chapter - IV Functions and Powers of the Commission Chapter - V Penalties and Appeals ii. iii. Competition (Merger Control) Regulations 2007 excluding the Schedule Competition (Leniency) Regulations 2007
64
Final Examination
Corporate Laws
i.
j.
Listed Companies (Substantial Acquisition of voting shares and Takeovers) Regulations, 2008
Listed Companies (Substantial Acquisition of voting shares and Takeovers) Ordinance 2002
j. K
Rules and regulations framed by the Federal Government from time to time, as may be specifically notified by the Institute of Chartered Accountants of Pakistan for inclusion in the syllabus. Not e: Where specific reference to an Act, Ordinance, Rules, Regulations, Guidelines or SRO gazette notification is given it is to be assumed that it covers any subsequent amendments that may be made therein from time to time.
Recommended Reading
PAPER E 15: Corporate Laws

Book Name & Author
1. 2. Complete Company Law S. A. Salam (Relevant topics). Foreign Exchange Manual (Latest Edition) by State Bank of Pakistan (Chapter No. XIX, XX only) available at www.sbp.org.pk. Banking Companies Ordinance, 1962 (Relevant sections only). Insurance Ordinance, 2000 (Relevant sections only). Practical Approach to the Companies Ordinance, 1984 by Nazir Ahmed Shaheen (Relevant topics).
About the Book

Bare Law and brief explanation thereon are included in the book. Covers relevant part of the syllabus.
3. 4.
Covers relevant part of the syllabus. Covers relevant part of the syllabus.
5.
It is a useful book for understanding practical application of law.

1. 2. 3. 4. Corporate Laws Study Text and Revision Series by AT Foulks Lynch Pakistan. Corporate Laws Study Text and Revision Series by Professional Business Publications (PBP). SECP Guide Series available at SECPs website (www.secp.gov.pk). Relevant issues of Members Information and Education Series issued by ICAP.
65
Final Examination
Business Management
Module E
P AP ER E 16 : Bu s i ne s s M a n a g e m e n t (100 marks)
Introduction
The ob ject ive of t his p aper is t hat the ind ivid ual s hould b e ab le to: Identify the principles and concepts in the theories and practices of strategic business management; Asses the impact of environmental forces such as global microeconomic forces, international trade and financial system on organizational strategies and plans; Understand the importance of linking information systems development and management to business goals and needs; Understand the interplay of marketing with other vital functional areas in business management and to understand the accountants role in servicing the needs of marketing and other functions of business; Recognize the role of global marketing and international business; Assess the importance of human resources development to organisations and identify methods of managing people effectively; Evaluate ways in which change can be managed successfully; Appreciation of social and ethical implication of strategic policies in business; Understand the aims of corporate codes of conduct and their role in improved corporate governance; and Understand the managers role and responsibilities in relation to the working environment.
Case studies / scenario based questions will be set in the examination.

1. Strategic management and planning 2. Corporate social responsibility and business ethics 3. Human resource management 4. Management of the working environment 5. Marketing Management 6. International Business
Weightage
30 30 20 20
Total
Note:
100
66
Final Examination
Business Management
Contents:
1. Strategic management and planning:
a. b. c. The purpose of strategic management and business planning and their inter relationship The methods which organisations use to plan for the future including the role of information technology Pos ition ap prais al and analys is : i. ii. iii. iv. v. vi. vii. viii. ix. x. xi. xii. d. Identifying the organizations strengths and weaknesses, opportunities and threats Identification and quantification of the planning gap Closing the planning gap through the identification and evaluation of alternative courses of action: improved efficiency; improved product(s);or service(s); introducing new product; entering new markets; merging with or acquiring other organisations Use of alternative strategies Quality and a strategic variable; its implementation and management Performance against operational and strategic targets; flexibility economy, efficiency and effectiveness Performance against that of competitors; benchmarking; use of inter-firm comparisons; the limitations of external data Performance of costs, profit and investment centres using financial and non-financial measures Problems of measuring divisional and subsidiary company performance International and multinational trading; transfer pricing of goods and services and their impact on trading results Impact of changing price level on current performance and the future projections Customer outlets, including customer profitability analysis
The eff ect of ex ternal environm ent on st rateg y and p lans and ap prais ing t he env ironment : i. ii. iii. iv. Scanning the environment of the organisation and the context in which it is set for changes, developments and opportunities Forecasting trends and developments in relevant areas through the use of relevant quantitative and qualitative analysis Future basing (i.e Anticipating long-term prospects for the business and its likelihood of survival) and other scenario-building techniques Impact on the organisation of changing national and international influences: demography; technology (progressional alternative / acceptability); economic resources; social attitudes and aspirations; legislation and regulation; political forces; government and other agencies, including pressure groups Competitive advantage: Q Q Q its meaning in different markets and industries of nations and the implications of this for organisational success the different approaches used by organisations and management in different countries and the lessons which can be applied to Pakistan the effect on organisations of working in an international environment, the key aspects of that environment and methods of entry into it
v.
67
Final Examination
Business Management
vi.
Use of renewable and non-renewable resources including the ethical implications of such use; the effect of the environment on corporate performance vii. External sources of information, including databases, both private and public, and their usefulness to the organisation viii. Impact of innovation, substitution and obsolescence on business process (including marketing and production) ix. Impact of international market integration on the transfer of goods, services and labour x. Comparative organizational performance: market share production capacity e. f. Methods of gaining support and commitment for strategies Es tab lishing the corporat e object ives: i. ii. iii iv v. g. h. i. Organizational missions, aims, goals and objectives Long-term (strategic) and short-term (operational) objectives: quantitative and qualitative evaluation Application of decision theory Problems of achieving balanced growth and development Internal and external factors effecting decisions; implication of short-termism
Formulating and evaluating plans with an awareness of the various techniques available to managers Understanding and managing the risk of a proposed business plan for the plan itself and for all the aspects of business which it will influence Reviewing strategy for the effect it will have on the organisation and the local and global community
2. Corporate social responsibility and business ethics

a. b. Understanding of obligation towards society by business organisations and the individuals associated with it, in carrying out the business and professional activities Understanding ethical and social implications of business strategic policies and decisions and their impact on the stockholders; consideration thereof in the formulation and implementation of strategic planning and management decisions Disclosure and confidentiality Profit motives versus other corporate objectives Goal congruence and corporate performance measurement The role of professional bodies in regulating the activities of members
c. d. e. f.
68
Final Examination
Business Management
3. Human resource management

a. b. c. d. e. f. g. h. i. The purpose and forms of personnel specifications in the recruitment of personnel Methods of identifying competencies and other attributes required Specifying personnel requirements Evaluating and determining the benefits and costs of new or additional personnel Identifying and determining suitable methods of recruitment Selection methods and their use Methods of motivating and supporting personnel Staff appraisals and the assessment of competence Warning and dismissing personnel: legal and organizational policies and procedures; the role of internal and external specialists in the process j. The role of employee group in promoting the welfare of personnel k. National legislation which affects recruitment, selection, employment and dismissal of personnel l. The management of organizational and personal changes m. Concep ts and princip les of hum an resource dev elopm ent i. ii. iii. iv. n. The role which individual and team development can play in growth and development The different concepts and models of competence Methods of encouraging and supporting individuals and teams to grow and develop The effect of internal and external factors on development
Human relations management
4. Management of the working environment

a. b. c. d. Interpretation, applying and monitoring best practices for managing the working environment National Legislation which affects the working environment The role and purpose of health , safety and security requirements, procedures and guidelines Roles and responsibilities of management for managing and improving the working environment
5. Marketing Management
An introduction to marketing principles, the purpose of marketing philosophy and concepts in providing for customer needs. Areas include: a. S trat egy in t he m arket place i. ii. iii. iv. v. Assessing threats and opportunities to the marketing plan; determining the need for change in the planning area Development of marketing strategies to meet organisation objectives Assessing the nature and size of the market using internal records, market intelligence, market research The process of creating, reviewing, selecting and marketing the right product in the right place, to the right customer at the right time, while achieving the right price; relevance of the product life cycle The product portfolio; formulation, management, the relevance of branded merchandise
69
Final Examination
Business Management
vi. Consumer power within the marketing environment vii. Strategic management of markets through mergers, acquisitions and divestments viii. Problems associated with the acquisition of the foreign subsidiaries especially in respect of performance appraisals b. c. Analyzing the impact of globalization on marketing to assess competitive advantage Techniques for analyzing the market, choosing the target market and the appropriate marketing mix, distribution channels, promotions, and developing a marketing plan
6. International Business
a. b. c. The environment of global marketing, global opportunities and threats; difficulties in International business and alternative approaches to managing the process The development of multinational organisations and transnational corporations and their role in the world economy Int ernational f inancial m anagem ent d ecisions i. ii. iii. Alternative methods of financing imports and exports The workings of international money and capital markets and the opportunities that they offer to companies as a source of finance and as a repository for the investment of funds The management of financial resources within a group of companies including: iv. payments between companies cash management transfer pricing judging the performance of companies within a group the financial control of a group of companies
The appraisal of international capital investments, applying the appropriate techniques, and the consideration of the major issues in the decision-making process, including: strategic objectives the principle of foreign home country versus host country returns the form of foreign investments, including the use of branches versus subsidiaries the different methods of financing foreign investments the effect of taxation on foreign investment decisions repatriation of sales amounts, earnings and charges to foreign operating companies political risk analysis
70
Final Examination
Business Management
Recommended Reading
PAPER E 16: Business Management

Book Name & Author
1. 2. Strategic Management Concepts and Cases by Fred R. David. Principles of Marketing by Kotler Armstrong.
About the Book

The book ensures concept building for the topics on strategic management. The book gives an in-depth knowledge of the principles of marketing and a good explanation of basic marketing concepts. The book is relevant for various syllabus topics under the mentioned grid. A comprehensive and detailed explanation of managerial practices is given in this book. The book is a good guide for concepts in the field of organizational behavior. The books comprehensively cover the following topics: Business Strategy and environment, marketing and human resources.
3. 4.
Human Resource Management by H. John Bernardin. Management and Organizational Behaviour by Laurie J. Mullins.
5. 6.
Business Studies by Dave Hall Rob Jones and Carlo Raffo.
AS Level and A Level Business Studies by Peter Stimpson.

1. 2. Business Management Study Text and Revision Series by AT Foulks Lynch Pakistan. Business Management Study Text and Revision Series by Professional Business Publications (PBP).
71
Final Examination
Management Accounting
Module F
P AP ER F 1 7 : M a n a g e m e n t Ac c o u n t in g (100 marks)
Introduction
The object ives of this sy llabus are: The The The The The understanding of cost accounting in relation to management functions. application of financial information for control purposes. development and interpretation of data for decision making. techniques for performance appraisal and operational research. candidates ability to design and present plans and schemes to the management.
The examinees are expected to possess comprehensive understanding of the subject over and above what they have learnt at the Intermediate stage. Topics examined at the Intermediate stage may or may not be directly re-examined here, however, examinees would need to utilize knowledge and skills learnt earlier. The paper is designed to cover theory and practical aspects of management accounting with special reference to Pakistan and real life situations. Case studies / scenario based questions will be set in the examination.

1. a. b. c. d. Cost accounting objectives, classifications and systems Cost concept in decision making Marginal costing and decision making problems Pricing and output decisions
Weightage
30
2. a. Standard Costing b. Budgetary controls c. Management control systems d. Activity based costing e. Preparation and interpretation of financial forecasts f. Cost control g. Total quality management h. Non financial risk management 3. Working capital management 4. Quantitative techniques a. Learning curve b. Network planning c. Operational research and cost reduction d. Linear programming
40
15
15
Total
Note:
100
72
Final Examination
Contents:
1. a. Cost accounting
Objective of a costing system; inventory valuation; cost classification; costing methods and systems, cost estimation; cost apportionment; job order costing; product costing (including process costing); and joint-and by-product. b. Cos t concep t in decis ion m aking Relevant and apportioned costs; differential cost, incremental cost; opportunity costs, and break-even & cost volume profit analysis c. Marg inal cost ing Distinction between marginal costing and absorption costing; break-even analysis, cost volume profit analysis. Various decision making options. d. Pricing and outp ut d ecisions Full cost pricing policies, including ROI; pricing of new products; opportunity cost; full cost vs marginal cost; transfer pricing methods and optimisation.
2. a. Standard costing
Nature and method of standard, marginal and absorption costing; standard setting; variance analysis and disposals of variances; use of standard costs in internal and external reporting; responsibility accounting, comparison with budgets; classification of variances; and planning and operational variances. b. Budg ets Concepts of budgetary control; advantages, administration and preparation of budget; functional budgets leading to preparation of master budget; fixed and flexible budgets; performance budgeting; the budget as part of the overall business plan; sales budget; sales forecast; production budget; direct materials budget; direct labour budget; manufacturing overhead budget; inventory budget; cost of goods sold budget; selling and administrative expenses budget; inflation aspects; zero based budgets, capital expenditure budgets and human & motivational aspects of budgets. c. Manag ement control sy st ems Responsibility accounting; decentralised divisional control; transfer prices; residual income and ROI as tools of control; centralised control and budgetary systems; evaluation of performance; performance budgeting. Reporting on performance at different levels.
73
Final Examination
d.
Activ ity bas ed cost ing Activity based costing for control and decision making purposes.
e.
Prep aration and int erpret ation of f inancial forecas ts Preparation of projected financial forecast and application of probability and regression analysis in preparation of estimates
f. g.
Cost Control Cost control as distinct from cost determination. Control over wastages, scrap, spoilages, and defects. Total quality management Basic concepts and application of TQM
h.
Non f inancial ris k m anagem ent i. ii. iii. iv. Aspects of risk, such as: political, economic, social, technological and fraud Techniques of minimising the risk of fraud, such as: fraud policy statements, effective recruitment policies and good internal controls especially over procurement and cash Principle of diversifying risk (no numerical calculations required) Risk of loss while goods are in transit and the risk of litigation
3. Working Capital Management

a. Working capit al- g eneral i. ii. iii. iv. v. b. Working capital requirements Short term financial ratios Working capital and the operating cycle Sources of short and medium term finance Problems relating to working capital management
Inv entory manag ement i. ii. iii. iv. v. vi. vii. Costs associated with the acquisition and holding of inventories The derivation and use of the economic order quantity (EOQ) model Optimal production plans Financial ratios of inventory Lead-time, buffer stocks and stock-out costs Perpetual inventory and continuous stocktaking Just-in-time (JIT) stock management
c.
Deb tor/ credit ors m anagement i. ii. iii. iv. v. Collection policies Credit policies Customer evaluation Credit financing (including factoring) Financing of imports and exports
74
Final Examination
d. i. ii. iii. iv. v.
Cas h manag ement Solvency and liquidity Cash flow forecasting Uncertainty in cash forecasting Short term investment opportunities Cash handling and transmissions
4. Quantitative Techniques
a. Learning curve The theory of learning curve and its effect in cost estimation b. Net work planning Concept and application; drawing simple networks; concept of critical path and float; accelerated project times; cost analysis; uncertainly; probability analysis; loading analysis; gantt charts; and time management. c. Operat ional research and cos t reduct ion Introduction to operational research, application concepts and its advantages. Cost reduction: techniques for cost reduction such as work study, time and motion study and value analysis. Employee participation in cost reduction programmes, significance of constituting special cost reduction cells. d. Linear prog ramming Introduction to mathematical programming and major forms of linear programming, principles, formulation of problems, graphical solutions, limitations of linear programming and shadow price concept. Not e: Questions will not be set involving application of simplex or assignment techniques.
75
Final Examination
Recommended Reading
PAPER F 17: Management Accounting

Book Name & Author
1. Cost Accounting by Matz and Uzry.
About the Book

The book covers almost all the parts of the syllabus and ensures concept building by giving examples on related topics especially good for variances analysis and process costing. The book covers almost all the parts of the syllabus and ensures concept building by giving a variety of questions for each topic. The book is relevant for various syllabus topics and contains a large number of questions for practice.
2.
Management Accounting by Colin Drury.
3.
Financial Management by P.K. Jain and M. Y. Khan.

1. 2. Management Accounting Study Text and Revision Series by AT Foulks Lynch Pakistan. Management Accounting Study Text and Revision Series by Professional Business Publications (PBP).
76
Final Examination
Business Finance Decisions
Module F
PA PE R F 1 8 : B u s in e s s F in a n c e D e c i s io n s (100 marks)
Introduction
The aims of the syllabus are to provide a sound understanding of the conceptual principles and practical applications of modern analysis of financial decisions and of the relationship between sources of finance and financial management. The candidates are expected to have complete understanding for the preparation, evaluation and implementation of practical business plans and reports on strategic and operational business decisions. The paper is designed to cover theory and practical aspects of financial management with special reference to Pakistan and real life situations. Case studies / scenario based questions will be set in the examination.

1. a. b. c. d. Sources of local finance International financing and financial management Capital structure, interest rate risks and cost of capital The dividend decision
Weightage
30
2. a. Capital investment decisions and project planning b. Inflation and financial management c. Risk and Returns, including portfolio management 3. a. Analysis and interpretation of published financial statements b. Strategic planning c. Valuation d. Mergers, amalgamations and acquisitions e. Reports to management
40
30
Total
Note:
100
77
Final Examination
Contents:
1. a. Sources of local finance
i. ii. iii. iv. v. vi. b. Credit, money and capital markets in Pakistan Raising capital, equity, debt, mezzanine debt, convertibles, factoring, warrants, term finance certificates, venture capital financing, project financing, short term finance. Financial leasing Futures Pakistani stock markets Prudential regulations
Int ernational f inancing and f inancial m anagem ent i. ii. iii. iv. Raising international finance Introduction to international financial management Exchange rate risk management Foreign exchange transactions
c.
Cap ital s truct ure, interes t rat e ris ks and cost of capit al i. Capital structure: business and financial risk, financial gearing and operating gearing, the effect of taxes ( except calculations involving the effect of personal taxes on capital structure), and impact on earnings per share Interest rate risk management including the use of interest rate swaps Cost of capital, equity, debt, convertibles, weighted average rate and use of cost of capital in investment appraisal.
ii. iii. d.
The div idend d ecision i. ii. Dividend and valuation Information content of dividend, clientele effect and other factors affecting dividend levels.
2. a. Capital investment decisions and project planning

i. Investment appraisal techniques: NPV, IRR, payback, ROI; and comparison of NPV and ROI ii. Investment appraisal under inflationary conditions iii. Relevant costs iv. The effect of taxation upon investment appraisal v. Replacement decisions using the equivalent annual cost method and deciding replacement policy vi. The effect on accounting profits and investor ratios of undertaking a particular investment decision vii. Lease or buy decisions viii. Make or buy decisions ix. Decisions under uncertainty, including expected values, sensitivity analysis and value of information
78
Final Examination
x.
Decisions under constraints, including interpretation of the linear programming output including dual values (shadow prices and opportunity costs), assumptions and limitations of linear programming, application of linear programming to capital rationing problems xi. Preparation of project report and evaluation of proposals xii. Social cost benefits analysis xiii. Project planning techniques b. Inf lation and f inancial manag ement Inflation and financial analysis; project appraisal under inflationary conditions; relationship with interest rates c. Risk and returns , includ ing port folio m anagement i. ii. iii. iv. Measures of risk and return, and their relationship Portfolio analysis; risk reduction effects and diversification Attitudes to risk Capital assets pricing model and its practical use
3. a. Analysis and interpretation of published statements

i. ii. b. Inter-firm and intra-firm comparisons through ratio analysis Limitations of ratio analysis
Strategic planning i. ii. iii. iv. v. vi. vii. viii. ix. Objectives Production functions and resource analysis Production strategy Manpower planning Financial strategy Competition strategy Information strategy Business and corporate plans Implementation of business plans
c.
Valuat ion i. Valuation of business Q Q Q Q ii. Earnings and asset valuation models Merger valuation models Attitudes to risk and analytical procedures for dealing with uncertainty Other factors ( e.g. the impact of the accounting treatment of goodwill and intangibles on debt covenants; the nature of executives incentive contracts)
Valuation of shares Q Q Earnings dividend and assets valuation models Valuing minority interests
79
Final Examination
Q Q Q d.
Valuing controlling interest Other factors influencing share values ( including uncertainty) Identify components of shareholder value and identify ways in which shareholders value can be increased.
Merg ers, amalg amat ion, acquis ition, et c Amalgamation, reconstruction, takeovers and mergers, including devising schemes and advising management.
e.
Report s t o m anagem ent i. ii. iii. The design and presentation of plans and reports Designing various forms and reports for different levels of management Specific reports Q Q Q Q On On On On acquisition and disposal of business or assets application for new or additional borrowings specialised one-off assignments (e.g. management buyouts) other problem areas.
Recommended Reading
PAPER F 18: Business Finance Decisions

Book Name & Author
1. 2. 3. Financial Management by Eugene F. Brigham and Michael C. Ehrhardt. Essentials of Financial Management by George E. Pinches. Financial Management & Policy by James C. Van Horne (Pearson Education). Modern Investments and Security Analysis by Russel J. Fuller & James L. Farrel Jr. Foundations of Finance by Keown, Petty, Scott & Martin.
About the Book

The book covers substantial part of the syllabus. The book covers substantial part of the syllabus. The book covers substantial part of the syllabus. The book is specifically written for security analysis. It is a good source for concept building. The book covers substantial area of syllabus. Provides firm foundation for the subject.
4.
5.

1. 2. Business Finance Decision Study Text and Revision Series by AT Foulks Lynch Pakistan. Business Finance Decision Study Text and Revision Series by Professional Business Publications (PBP).
80
Final Examination
Advanced Taxation
Module F
P AP E R F 1 9 : A dv a n c e d T a x a t i on (100 marks)
Introduction
The objective of this paper is to test comprehensive knowledge and understanding of the examinees on the income tax and sales tax laws prevailing in Pakistan, as are described below. The examinees shall also be expected to have command on the practical application of the laws. A general knowledge of the Central Excise Law will also be examined. The paper covers the following laws. Q Q Q Q Q Q The The The The The Income Tax Ordinance, 2001 Sales Tax Act, 1990 Sales Tax Ordinance, 2000 promulgated by the Provinces Islamabad Capital Territory (Tax on Services) Ordinance, 2001 Federal Excise Act, 2005
Notifications, Rules, General orders and Circulars issued under the above mentioned laws
As candidates are required to have comprehensive knowledge of the laws described above, detailed contents are, therefore, not given hereunder. The examinees are expected to possess profound understanding of the subject over and above what they have learnt at the Intermediate stage. Topics examined at an earlier stage may or may not be directly re-examined, however, examinees would need to utilize knowledge and skills learnt at the Intermediate stage. Knowledge of specific agreements for avoidance of double taxation will not be required. Candidates are also not expected to quote specific legal cases. Case studies / scenario based questions will be set in the examination. Notifications and circulars in respect of Finance Act/Ordinance, issued within a period of less than six months from the examination date will not be tested. However, the Finance Act/Ordinance would be examined from the attempt following its date of enforcement.

A comprehensive knowledge and practical applications in respect of: 1. Income Tax Laws 2. Sales Tax Laws General knowledge in respect of : 3. The Federal Excise Act, 2005 (Chapters I & II only)
Weightage
55 65 25 35 7 15
Total
Note:
100
81
Final Examination
Advanced Taxation
Recommended Reading
PAPER F 19: Advanced Taxation

Book Name & Author
1. 2. Law & Practice of Income tax by Dr. Ikram-ul-Haq. Complete Income Tax Law by S.A. Salam.
About the Book

These books cover all topics of syllabus, regularly updated and also gives background of any changes made to the law. Bare Act, Rules, Notifications; Circulars etc on syllabus topics are included in the book with brief explanations. The book covers the related topics of syllabus.
3.
Sales Tax Ready Reference Act by S.A. Salam. Federal Excise Act, 2005 including relevant notifications, circulars etc. by Tariq Najeeb Choudhry. Practical Handbook of Income Tax by Dr. Ikram-ul-Haq. Synopsis of taxation by Mirza Munawar Hussain. Pakistan income tax law Principles and Practice by Mian Safiullah & Kashif Aziz Jahangiri.
4.
5. 6. 7.
These are very useful books for understanding practical application of taxation.
82
Final Examination
Advanced Auditing
Module F
P AP E R F 2 0 : A dv a n c e d Au d it in g (100 marks)
Introduction
To ensure that students have acquired the competence to provide comprehensive audit and business assurance services, by testing their ability to integrate and apply their knowledge of auditing to realistic problems. Students will be expected to have the knowledge of the International Standards on Auditing and Related Services, the International Auditing Practice Statements, Technical Releases and circulars issued by ICAP. For details see syllabus contents below. Students will be expected to be aware of the role of Information Technology as part of the assurance process and should be fully conversant with the use of Computer Assisted Audit Techniques (CAATs). Students will be expected to display the ability to document the accounting and internal control systems of an enterprise and prepare simple flow charts thereon. Students will also be expected to possess knowledge of the implications on the audit, of laws, rules and regulations covered in the Corporate Laws paper. Students will be expected to draft audit reports, qualifications in audit reports, management letters, internal control memoranda, representation letters, reports on case studies and any other types of letters or reports. Knowledge of the Code of Ethics for Chartered Accountants issued by ICAP, CA Ordinance and ByeLaws. The students are encouraged to be abreast of current issues relating to the auditors and audit practice as discussed / reported in accounting magazines, national press, etc. The examinees are expected to possess a profound understanding of the subject over and above what they have learnt at the Intermediate stage. Topics examined at the Intermediate stage may or may not be directly re-examined here, however, examinees would be required to utilise knowledge and skills acquired at the Intermediate stage. Case studies / scenario based questions will be set in the examination.
83
Final Examination
Advanced Auditing

1. Practical aspects in respect of areas of auditing covered at Intermediate stage. 2. Advanced issues in planning an audit 3. Audit techniques and procedures 4. Evaluation of critical areas 5. Completion stages and the reporting function 6. Special reports 7. Special audits 8. Quality control for audit work 9. Management of audit clients and client relationships 10. International Standards on Assurance, Auditing & Related Services, and International Auditing Practice Statements 11. Professional and ethical considerations
Weightage
35
25
10
30
Total
Note:
100
Contents:
1. Practical aspects in respect of areas of auditing covered at Intermediate stage 2. Advanced issues in planning an audit
a. b. c. Consideration of laws and regulations in the audit of financial statements. Performance of client acceptance procedures at the time of accepting new audit engagements and issuing engagement letters. Cons iderat ion of the ef fect s on an aud it w hen: i. ii. The financial statements are audited for the first time; or when the financial statements for the prior period were audited by another auditor who has expressed an unqualified or a qualified opinion.
84
Final Examination
Advanced Auditing
d. e. f.
The examination of prospective financial information and its effects on different stages of audit. Obtaining knowledge of business and significant business risks, and using it to develop overall audit approach plan. Cons iderat ions in using the work of : i. ii. iii. iv. Internal auditors; experts; another auditor; and audit committees.
g.
Determining the components of audit risk i.e. inherent risk, control risk, detection risk and use of this assessment to formulate overall audit plan in order to keep the audit risk to an acceptable low level. Relationship between materiality and audit risk. Development of the overall audit plan identifying the significant/critical audit areas. Development of detailed audit programmes. Organising and planning complex audit situations, including group audits, joint audits, multilocation engagements, special purpose engagements including due diligence reviews and related service engagements. Identification of related parties and effects of transactions with related parties on the financial statements and auditors opinion.
h. i. j. k.
l.
m. Securit y is sues in com put erised s ys tem s: (i) IFAC guideline on Managing Security of Information; and (ii) Information Security Governance Guidance for Boards of Directors and Executive Management. Both of these publications are available on IFAC website www.ifac.org. n. o. p. Time budgeting, staffing and costing. Changes to overall audit plan and audit programmes. Maintenance and updating of Permanent audit files.
3. Audit techniques and procedures

Students should be able to identify objectives for particular audits, select and apply test of controls and substantive procedures to obtain appropriate evidence, evaluate the evidence, and draw reasonable conclusions including the following:
85
Final Examination
Advanced Auditing
a.
Id entif ying risk s of m aterial mis st atem ents in: i. ii. iii. Existence, ownership / obligation, accuracy / measurement, valuation and completeness of assets and liabilities; appropriateness of accounting policies and their consistent application; and disclosures in the financial statements of an entity, including additional information relating to capital commitments and contingencies and effects of post balance sheet events.
b.
Selecting one or more analytical procedures from comparison, averaging, ratio analysis and quantitative analysis (but excluding correlation, regression, time-series analysis and more advanced statistical techniques) to yield informative results relevant to identified risks. Applying selected analytical procedures to given financial and other data. Selecting one or more tests of controls and substantive procedures (using CAATs where applicable) from inspection, observation, enquiry (including management representations, assessment of the work of other auditors and specialists, and independent confirmations) and computations to provide evidence relevant to identified risks which will be sufficiently reliable and which avoid duplication of work. Outlining the differences between statistical and non-statistical methods of sampling and selecting samples from random, value-weighted, systematic, haphazard and block populations. Documentation of audit work alongwith evidence of review and conclusions drawn. Reporting of significant issues identified during the audit. Drawing straightforward conclusions regarding financial statements, given the results of analytical procedures, audit tests and post balance sheet events.
c. d.
e.
f. g.
These conclus ions should : i. ii. iii. Present and justify a view, where there is sufficient evidence to do so; identify and justify requirements of further evidence, where there is insufficient evidence to form a view but such evidence could practicably be obtained; and state that it is not possible to form a view, where there is insufficient evidence to do so and such evidence could not practicably be obtained.
4. Evaluation of critical areas

a. b. Appropriateness of going concern assumption. Ev aluating the eff ects on rep orting resp onsib ilities of an aud itor res ulting f rom: i. ii. iii. iv. v. c. pending legal action; fraud and error; non-compliance with laws and regulations; and taxation and tax related contingencies. other post balance sheet events
Audit of accounting estimates.
86
Final Examination
Advanced Auditing
5. Completion stages and the reporting function

a. Review of financial statements including comparative information, directors report and other information included in documents containing audited financial statements to identify any departures from legal requirements and / or IFRSs, inadequacies in disclosures, internal inconsistencies and / or inconsistencies with other available information. Adequate disclosure of events occuring after reporting period and their effect on the auditors opinion. Management representations regarding all significant matters. Forming and justifying an opinion on financial statements in the light of supervisory reviews and the results and conclusions from audit tests and procedures, which would comply with the requirements of the Companies Ordinance, 1984 or other laws related to special entities. Preparation of management letters, internal control memoranda of entities which include clear and concise statements of facts, their potential effects and recommendations for actions relevant to the needs and nature of the entity.
b. c. d.
e.
6. Special reports
a. b. c. d. e. f. g. h. i. j. k. l. Special purpose reports e.g. on forecasts and estimates etc. Reporting and related services (compilation and review engagements). Reports on prospectuses. Certificates of auditors on statutory reports. Reports relating to bonus issues. Reports on prospective financial information. Audit reports on special purpose audit engagements. Special audit reports relating to forensic assignments. Reporting on due diligence engagements. Reporting on compliance with the Code of Corporate Governance. Report on component of financial statements Certificates on break-up value, net worth, right issue, other matters as specified from time to time by Regulating authorities.
7. Special audits
a. Non statutory audits, cost audits, management audit, systems audits, operational audits, forensic assignments (including money laundering aspects), due diligence reviews, internal audit functions (in house and outsourced). Audits of specialised enterprises e.g. banks, insurance companies, investment companies, housing finance companies, employees retirement funds.
b.
8. Quality control for audit work

a. Quality control policies and proced ures: i. ii. at audit firms (peer reviews); and at individual audits.
87
Final Examination
Advanced Auditing
b.
Sp ecify ing q uality cont rol proced ures : i. ii. iii. iv. v. the independence of the audit firm and audit personnel; the skills and competence of audit personnel; procedures for review of the audit documentation handling and safeguarding the audit documentation procedures to resolve technical disagreements which will be suitable for a specific audit firm and which shall be cost effective; vi. quality control reviews (internal and / or by ICAP); and vii. the concept of audit committees.
9. Management of audit clients and client relationships

a. b. c. d. Managing the audit clients, including compiling and reviewing information on clients throughout the year. Managing the audit relationship including negotiating the fee for services and discussion of administration and results of audit Confidentiality. Independence.
10. International Standards on Auditing Assurance, & Related Services, and International Auditing Practice Statements
Students will be required to apply the standards and statements mentioned below to meet the learning outcomes of Syllabus contents in paragraphs 1 to 9 above. a. b. c. Detailed knowledge of International Standards on Auditing sufficient knowledge of International Standards on Review Engagements general awareness of International Auditing Practice Statements, International Standards on Assurance Engagements and International Standards on Related Services
11. Professional and ethical considerations

Knowledge of ICAP Ordinance and Bye-Laws and Code of Ethics, adherence thereto and its implementation and enforcement including but not limiting to the following: a. Rules of p rofes sional conduct i. integrity, objectivity and independence ii. professional duty of confidence iii. changes in professional appointments iv. books, documents and papers v. corporate financial advice vi. conflicts of interest b. Prof ess ional res pons ibilit y and liab ility fraud and error professional liability (including negligence) iii. misconduct iv. expectation gap v. professional indemnity insurance vi. insider dealing i. ii.
88
Final Examination
Advanced Auditing
12. Case studies

Case studies will be based on the whole subject and knowledge acquired during practical training. The candidates should be able to : a. b. Select and apply analytical techniques and methods from the syllabus according to the requirements of a particular case. Prepare recommendations for action in response to the case.
Recommended Reading
PAPER F 20: Advanced Auditing

Book Name & Author
1. International Standards on Auditing, International Auditing Practice Statements, International Standards on Review Engagement, International Standard Standards on Assurance Engagement, International Standards on Related Services Issued by IAASB & IAPC, and is published by ICAP as Handbook. Code of Ethics for Chartered Accountants issued and included in Handbook given at (1) above. Companies Ordinance, 1984 by Government of Pakistan. Advanced Auditing by Dr. Khawaja Amjad Saeed.
About the Book

The book covers all topics of syllabus except for Laws and Regulations related to auditing practice applicable in Pakistan. It contains detailed material including background, rationale and practical examples of each subject of the syllabus.
2.
Part B of the Code covers the related topics of syllabus. The book contains provisions related to appointment, removal, report etc. of auditor of limited companies. The book contains important material useful to deal with various issues of audit and related services.
3.
4.

1. 2. 3. 4. Advanced Auditing Study Text and Revision Series by AT Foulks Lynch Pakistan. Advanced Auditing Study Text and Revision Series by Professional Business Publications (PBP). Selected Opinions, Technical Releases (Auditing). Relevant issues of Members Information and Education Series issued by ICAP.
89

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Contents

The Institute of Chartered Accountants of Pakistan

LAYOUT OF THE BOOKLET Syllabus

Indicative Grid Syllabus Content Area

2. Practical Use of Grammar

The Institute of Chartered Accountants of Pakistan

d. Writing Mechanics Capitals, Abbreviations

3. Composition and Comprehension

PAPER A 1: Functional English

About the Book

Word Power Made Easy by Norman Lewis.

These are very useful books on grammar and comprehension.

Supplementary Study Material

The Institute of Chartered Accountants of Pakistan

Indicative Grid Syllabus Content Area

The Institute of Chartered Accountants of Pakistan

4. Matrix and Determinants

6. Methods of Least Square and Regression

7. Probability and Probability Distribution

8. Sampling and Decision Making

PAPER A 2: Quantitative Methods

About the Book

Supplementary Study Material

The Institute of Chartered Accountants of Pakistan

Introduction to Economics & Finance

Indicative Grid Syllabus Content Area

The Institute of Chartered Accountants of Pakistan

Introduction to Economics & Finance

Capital Role of the money and capital markets.

The Institute of Chartered Accountants of Pakistan

Introduction to Economics & Finance

PAPER B 3: Introduction to Economics and Finance

About the Book

Supplementary Study Material

The Institute of Chartered Accountants of Pakistan

Introduction to Financial Accounting

Indicative Grid Syllabus Content Area

The Institute of Chartered Accountants of Pakistan

Introduction to Financial Accounting

v. vi. vii. viii. ix.

Marketing channels; Q Sole Distributors; Q Wholesalers and; Q Retailers.

2. Financial accounting practices

The Institute of Chartered Accountants of Pakistan

Introduction to Financial Accounting

3. Receipt and payment accounts and accounts from incomplete records

4. Other specialized areas

(Note: Cost Ac co un ting t ec hniqu es will no t be te ste d at th is sta ge )

The Institute of Chartered Accountants of Pakistan

Introduction to Financial Accounting

PAPER B 4: Introduction to Financial Accounting

About the Book

Supplementary Study Material

The Institute of Chartered Accountants of Pakistan

Indicative Grid Syllabus Content Area

5. Sale of Goods Act 1930

2. Contract Act 1872

6. Trust Act 1920

3. Partnership Act 1932

7. Carriage of Goods by Sea Act 1925

4. Negotiable Instruments Act 1881

Clear your mind of cant

Indicative Grid Syllabus Content Area