Syllabuses Icab

SYLLABUSES ON PROFESSIONAL EXAMINATIONS Professional Examination I (PE I) Paper

I : Accounting Full paper

Section

I Half paper

Financial

Accounting 03 hours

and

Cost

100 marks :

Financial

Accounting 1.50 hours 50 marks

Objectives This course is designed to impart knowledge about the impact of nature of special business transactions and also of organisation structure on accounting. This course also covers accounting of financial institutions and public utilities. Specification Grid Syllabus Contents Weightage (Indicative grouping of areas) (Indicative %) Joint Venture Accounts, Consignment Accounts, Branch 25% and Departmental Accounts Hire-Purchase and Installment Accounting, Lease 25% Accounting, Royalty Accounts, Accounting for Garments Enterprises Integrated Accounting System as practiced in Industrial 25% Enterprises in Bangladesh, Accounting for NGO’s and enterprises in Export Processing Zones, Accounting for Not-for-profit Organizations Accounts of Banks, Accounts of Insurance Companies 25% Accounting for Public Utilities Concerns 100% Contents 01.

Joint Venture Accounts: Difference between Joint Venture and Consignment, Accounting for Joint Venture, No. separate books of Joint Venture, Joint Venture Account, Memorandum Joint Venture Account, Separate Books for Joint Venture, Joint Bank Account, Joint Venture Account, Joint Venture Investment Account, Interest Calculation, Account Current.

02.

Consignment Accounts: Difference between sales and consignment, Account sales, Accounting treatment in consignor’s books, Valuation of unsold stock, Treatment of commission, bad debt and Del Credere Commission, treatment of loss of goods on consignment, Stock

deficiencies, insured and uninsured stock losses-goods on consignment at selling price, treatment of discount on bill of exchange, accounting treatment in consignee’s book. 03.

Branch and Departmental Accounts: Distinction between Branches and Departments, Branch selling only for cash, Branch selling both for cash and credit, Goods invoiced at selling price, Branch maintaining independent Accounts, Foreign branches, Departmental Accounts.

04.

Hire-Purchase and Installment Accounting: Hire-Purchase: Definition, Accounting treatment in the books of buyer and seller, Treatment of repossession. Installment: Hire-purchase versus Installment, Determination of Installments Accounting, treatment for installment both in purchaser’s and seller’s books.

05.

Lease Accounting: Concept of Lease, Economics of Leasing, Accounting for Lease, Accounting by Lessor : Opening Leases, Direct Financial Lease and sale type Leases, Accounting by Leases : Opening Lease, Capital Lease, Sales & Lease back [IAS 17].

06.

Royalty Accounts: Introduction, Minimum Rent or Deed Rent, Shortworkings, Journal Entries, Ledger Accounts, Records in the book of Landlords, Treatment in final accounts.

07.

Accounting for Garments Enterprises: Finalisation of accounts of garments enterprises with special references to currency translation and back-to-back L/C. [IAS 15, IAS 21].

08.

Integrated Accounting System Enterprises in Bangladesh.

09.

Accounting for NGO’s and enterprises in Export Processing Zones.

10.

Accounting for Not-for-profit Organisations: Accounting Procedures, Receipts and Payments Account. Income & Expenditure Account, Balance Sheet.

11.

Accounts of Banks: Provisions of the Banking Companies Act, 1991 relating to Accounts and Audit-Book-keeping : Principal and subsidiary books, Ledgers, General and Subsidiary, Internal control & checks, Designing a system of accounting for bank, important items of a Balance Sheet, Full particulars of Book debts. Auditors Report, prescribed forms of Profit & Loss Account and Balance Sheet of a bank, Financial powers of managing directors and directors, Reserve fund and cash reserve, Restrictions on loans and advances, Maintenance of liquid assets [IAS 30].

12.

Accounts of Insurance Companies: Provisions of the Insurance Act of 1938 relating to investment, loans, management, investigation, commission---rebates etc.

as

practised

in

Industrial

Preparation of Revenue Account and Balance Sheets for life Insurance and General Insurance. Insurance Claim Settlement. 13.

Accounting for Public Utilities Concerns: Accounting for Railways, Electricity, Telephone, WASA & Gas Distribution Authority. Treatment of Replacement and Renewals under Double Accounts System.

Schedule of recommended text & books

# Hanif & Mukherjee – Modern Accounting # Jain & Narang – Advanced Accounting # Haried – Advanced Accounting # Insurance Act, 1938 # Banking Companies Act, 1991

Section

II

***

:

Cost

Accounting

1.50 hours Half paper marks

50

Objective The course is designed to acquaint students 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 covers job order, process costing and standard cost systems. It is programmed to equip candidates with fundamentals of accounting for material. Labour and manufacturing expenses: and understanding of the importance of the role of the cost accounting in planning and controlling the wide range of organisational and manufacturing costs. Specification Grid Syllabus Contents Weightage (Indicative grouping of areas) (Indicative %) Introduction, Cost Terminology and Cost Flows 15% Costing and Control of Materials, Costing and Control of 20% Labour, Costing and Control of Manufacturing Overhead Allocating Costs to departments, Activity-Based Costing 20% (ABC) Job-Order Costing, Process Costing 25% Costing for Joint Products and By-Products 20% Operation Costing and Back flash Costing 100% Contents 01.

Introduction: Cost Accounting Defined; Comparison of Cost Accounting and Financial Accounting; The Role of Cost Accounting; Cost Data for Management Purposes; Methods and technique of Cost Accounting; Characteristics of an Ideal Cost Accounting System; Applications of Cost Accounting; Modern Trends in Cost Accounting.

02.

Cost Terminology and Cost Flows: Cost object; Cost; Expense and Loss; Cost Categories, Cost associated with Time of Incurrence, Cost Reactions to Changes in Activity, Cost Classifications on Financial Statements; Components of Product Cost; Accumulation of Product Costs; Cost of Goods Manufactured and Sold.

03.

Costing and Control of Materials: Classification of Materials; Accounting for Materials; Pricing the Issue of Materials; Periodic Inventory system and Perpetual Inventory System; Planning Material Requirement; Ordering Cost; Holding Cost and EOQ; Effect of quantity Discounts on EOQ; Safety Stock and Reorder Point.

Maximum and Minimum Stock Levels; JIT and Material Control; Material Requirement Planning (MRP); ABC Analysis. 04.

Costing and Control of Labour: Productivity and Labour Costs; Costs included in Labour; Accounting for labour; Time-keeping, Computation of Total Payroll and Allocation of Payroll costs: Jourrnalizing Labour Costs; Special Problems Relating to Accounting for labour; Labour Cost Control, Labour Turnover and Control of Labour Turnover.

05.

Costing and Control of Manufacturing Overhead: Manufacturing Overhead Costs, Actual vs. Normal Costing of Manufacturing Overhead; Production Capacity, Predetermined Overhead Rates; Departmental vs. Plantwide Overhead Rates; Separate Variable and Fixed Overhead Application Rates; Separating Mixed Costs- High-low Method and Least Squares Regression Analysis; Using Flexible Budgets in Setting Predetermined Overhead Rates; Disposition of Underapplied and Overhead; Causes of Underapplied Overhead.

06.

Allocating Costs to departments: Cost Allocation through Cost Pools; Allocation of Service Department Costs; Reasons for Service Department Cost Allocations, Methods of Service Department Cost Allocation-Direct Method, Step Method, Algebraic Method and Reciprocal Method.

07. Activity-Based Costing (ABC): Methods; Identifying Activities that Use Resources; Cost Drivers and choosing Cost Drivers, Assigning Costs Using Activity, Based Costing, Benefits of ABC, Criticism of ABC. 08.

Job-Order Costing: Job-Order Costing; Job Cost Sheet; Accounting for Materials and Labour in Job-Order System; Factory Overhead Application; Spoiled Units, Defective Units, Scrap and Waste in Job Order Cost System.

09.

Process Costing: Process vs. Job-Order Costing; Determination of Equivalent Units; Cost of Production Report; Weighted Average and FIFO Process Costing Methods; EUP Calculations and Cost Assignments.

10.

Costing for Joint Products and By-Products: Joint Products and ByProducts, Allocating Joint Costs-Physical Measure of Allocation and Monetary Measure of Allocation, Accounting for By-Products.

11.

Operation Costing and Back flush Costing

Schedule of recommended text & books # Polimeni, Fabozzi and Adelberg – Cost Accounting (3rd Edn.) # Barfeld, Ralborn & Dalton – Cost Accounting -Traditions & Innovations (1st Edn.) # L.Gayle Rayburn – Cost Accounting -Using A Cost Management Approach (4th Edn.) # Michael Maher – Cost Accounting -Creating Value for Management (5th Edn.) # Barfeld, Ralborn & Kinney – Cost Accounting -Traditions & Innovations (3rd Edn.)

Paper

II Full paper

Aim: -

***

:

Taxation-1 03 hours 100 marks

The aim is to examine: The basic principal of income tax and the rules relating thereto; The application of those principles and rules in practical situations; The basic principles and rules relating to value added tax (VAT0 and application of those principles and rules in practical situations.

Specification Grid Syllabus Contents Weightage (Indicative grouping of areas) (Indicative %) Income tax 65% Preliminary (Chapter-I): Definitions, Administration (Chapter-II): Income tax authorities and their Powers (Chapter-XIV), Taxes Appellate Tribunal(Chapter-III) including Taxes Appellate Tribunal (Procedure) Rules-1985, Charge of income tax (Chapter-IV), Computation of income (Chapter-V), Exemption and allowances (Chapter-VI), Payment of tax before assessment (Chapter-VII), Return and Statement (Chapter-VIII), Assessment (Chapter-IX), Liability in special cases (Chapter-X), Special provisions relating to avoidance of tax(Chapter XI), Requirement of furnishing Certain Information(Chapter XII), Imposition of penalty (Chapter–XV), Recovery of tax (Chapter –XVI), Double Taxation relief (Chapter-XVII), including tax-treaties, Refunds (Chapter-XVIII), Appeal and reference(Chapter-XIX), Protection of Information(Chapter-XX), Offenses and Prosecution(XXI), Miscellaneous (Chapter-XXII) and Schedules. The First Schedule: PART A- Approved Superannuation funds, PART B- Recognised Provident Funds & PART C – Approved Gratuity Funds. The Second Schedule: Rates of income tax in some special cases. The Third Schedule: Computation of Depreciation Allowance, The Fourth Schedule: Computation of profits and gains of Insurance Business. The Fifth Schedule: PART A – Computation of the profits or gains from the exploration and production of petroleum (including natural gas) and the determination of the tax thereon and PART B – Computation of profits and gains from the exploration and extraction of mineral deposits (other than oil and natural gas) in Bangladesh. The Sixth Schedule: PART A – Exclusions from total income PART B – Exemptions and allowances for assessees being resident. The Seventh Schedule: Computation of relief from Income tax by way of credit in respect of Foreign tax. Value Added Tax (VAT): 35% Fair knowledge with respect to principles and practices of VAT including practical problems 100% Statutes/Rules/legal references: 1. Income tax (IT): a. Income Tax Ordinance (No.XXXVI) of 1984 – including updated amendments made by the annual FO/FA thereto: IT Manual: Part-I : Sections: 01 – 187 : Schedules: 01 – 7 b. Income Tax Rules (SRO No.39-L/85 of 14 January 1985) 1984 – including updated amendments made thereto: Rules: 01-67 c. Various Notifications/SROs and Orders made from time to time there under. 2. Value Added Tax (VAT): a. VAT Act (No.22) of 1991 – including updated amendments made by the annual FO/FA thereto: Sections 01-73 and Schedules 1-3 thereto b. VAT Rules 1991: SRO No.178 – Law/91/3-Mushak of 12 June 1991 – including updated amendments made thereto: Rules 01-43 and Forms: Mushak: 01-29 c. Various Notifications/SROs and Orders made from time to time there under. 3. Customs Act (No.IV) of 1969 – updated: Import-duty (ID), Supplementary-duty (SD) under VAT law and Infrastructure Development Sur-charge (IDSC) under Finance Act (No.15) of 1997. 4. Court Fees Act (No.VII) of 1870 – dated

5. 6. 7.

Stamps Act (No.II) of 1899 – updated Registration Act (No.XVI) of 1908 – updated Motor Vehicles Tax: Motor Vehicles Tax Act (Bengal Act No.I) of 1932 – updated Motor Vehicles Ordinance (No.LV) of 1983 – updated 8. Travel Tax: Finance Act (No.XXIII) of 1980 – updated & Finance Ordinance (No.XLV) of 1986 – updated Paper III : Auditing & Business Law 03 hours Full paper 100 marks Section

I

:

Auditing 1.5 hours Half paper

50 marks

Objectives As an induction into the professional examinations, the syllabus is intended to enable candidates to equip and familiarize themselves with a professional approach needed for conducting an adequate and effective audit and reporting on the financial statements of an entity. The examination is designed to assess the candidate’s understanding and application of the objective, basic principles, procedures and practices involved in the audit of usual practical client situations. The whole of the Auditing syllabus from Foundation Examination III (aggregating 200 marks) should be viewed in totality as a continuous process for learning and application of the candidate’s knowledgeability and understanding thereof in practical audit situations. Candidates are expected to have cumulative knowledge of the subject matters covered in the Auditing Syllabi of earlier examinations. Specification Grid Syllabus Contents (Indicative grouping of areas) Audit Principles and Procedures: Position of an Auditor Principles of Auditing

Contents 6.

-

Audit Principles and Procedures: Audit Administration Audit Strategy Audit Methodology Accounting System and Internal Control Planning Controlling Documentation Review of Financial Audit Evidence • Stages of an Audit • Tests of Control

Weightage (Indicative %) 40% 30% 30% 100%

-

-

• Substantive Procedures • Review Techniques • Formulation of Audit Opinion • Internal Control System : Meaning, Objectives and Types of Internal Control Basic Principles Governing Accounting Systems and Related Internal Controls Significance of an adequate and effective system of Internal Control Essential Characteristics of an Internal Control System • Plan of Organisation • Management Supervision • Authorisation Procedures • Recording Procedures • Custody Procedures Risk Assessment and Internal Control Internal Meaning, Nature and Scope of Audit Objectives of Audit Need for and purpose of audit Primary and secondary objectives and advantages of audit Essential Features (Characteristics) of Audit Reviewing Testing Comparing Reporting Functions Types and Classes of Audit Statutory and Non-Statutory audit Internal and External audit General and Independent audit Compliance and Comprehensive audit.

02.

Position of an Auditor Audit appointment and Engagement letters Companies Act (1994) Provisions regarding: Appointment and Removal of Auditor Rights and powers of Auditor Responsibilities and duties of Auditor Qualification and Disqualification of Auditor Remuneration of Auditor Financial and Accounting Responsibilities of Directors

03.

Principles of Auditing Elementary knowledge of : Accounting and Auditing Standards General (Basic) Principles Governing an Audit Ethical Guidelines and Technical Standards General Understanding of: Financial Statements and Accounting Policies Accounting Concepts and Consideration of : Going Concern-Consistency-Accruals Prudence-Substance over Form-Materiality Audit Conceptualization of : Auditor’s Reasonableness Professional Judgement Audit’s Duty of Care

-

Audit Materiality Audit Independence True and Fair View Audit Opinion

Schedule of recommended text & books Bank Audit Guide – ICAB Publication Insurance Audit Guide – ICAB Publication Modern Auditing & Assurance Services – Gill Modern Auditing – Gill Information System Auditing & Assurance – Hall Auditing : Integrated Concepts and Procedures – Taylor Modern Auditing – Boynton Principles & Practice of Auditing – Pagare, Dinkar Contemporary Auditing – Kamal Gupta Auditing Principles and Procedures – Dr. Khawaja Amjad Saeed Members Handbook, ICAB IFAC Handbook of Auditing & Ethics Pronouncements IFAC Code of Ethics for Professional Accountants IFAC Handbook of Technical Pronouncements – International Information Technology Guidelines IFAC Handbook of Technical Pronouncements – International Public Sector Accounting Standards Section

II Law 1.5 hours Half paper

:

Business 50 marks

Objectives The object of study of Business Law by the students who are preparing themselves for the profession of chartered accountants, should be to make themselves familiar with the different aspects and provisions of Commercial Laws which they may come across in discharging their professional responsibilities. Specification Grid Syllabus Contents Weightage (Indicative grouping of areas) (Indicative %) The Law of contract in detail, including contract of indemnity, 30% Guarantee, Bailment, pledge and Law of agency Different types of business concern-proprietorship partnership 40% and Limited Companies and Corporations created by Law, a Comparative study only and not a detail study Sale of Goods Act, 1930- Salient Features and provisions, the 30% Law relating to insolvency including Bankruptcy, Negotiable Instruments Act 1882, the Arbitration Act 1940 100% Contents 01. 02. 03. 04. 05. 06.

The Law of Contract in detail, including Contract of Indemnity, Guarantee, Bailment, Pledge and Law of agency. Different types of business concern-Proprietorship, Partnership, Limited Companies and Corporations created by Law-a-comparative study only and not a detailed study. The Sale of Goods Act, 1930-Salient features and provisions The Laws relating to Insolvency including Bankruptcy The Negotiable Instruments Act, 1882 The Arbitration Act, 1940

Schedule of recommended text & books # Sale of goods Act, 1930- Salient Features and Provisions # Laws relating to Insolvency including Bankruptcy # Negotiable Instruments Act, 1882 # Arbitration Act, 1940 Paper

IV Technology 03 hours Full paper

:

Information 100 marks

Objectives To assess (a) understanding of basic and current concepts of Information Technology and financial knowledge of a modern personal computer and popular productivity software software package, (b) both benefits and relevance of application of Information Technology in modern business keeping in view the demands of business/ management and the current trend in Information Technology. (Business Information Systems include Management Information System. Decision Support System, Enterprise Resource Planning and others needed for achieving the objectives of that particular business). Terminology: Information Technology (IT) refers to the total system of hardware and software in a standalone or connected environment as the technology today for manipulation of information for its various users. Personal Computer (PC) is a desktop, tower based or notebook micro computer which is mainly used a standalone PC or as a workstation connected to bigger to another computer system. Software packages are application software sold normally off the shelf as a package often called shrink wrapped software. Specification Grid Syllabus Contents Weightage (Indicative grouping of areas) (Indicative %) Brief history of Computers 5% Basic Concepts and essential terminologies 15% Basic Networking and Communication concepts 15% Elements of data processing 15% Security 5% Modern trends in Information Technology 10% Effective Business Information System with use of Information 15% Technology where relevant Computerised Financial/Accounting System 15% Establishment of Standards and Controls in general in 5% Computerized Business Systems 100% Contents 6. i. 02.

Brief history of Computers History of computers, generations of computers; evolution of Personal Computers.

Basic Concepts and essential terminologies

i. ii. 6. iv.

Types of computers (digital, analog and hybrid) and distinctions between them Computer hardware Software Operating systems-single user (MSDOS/Windows 95), multiuser (Unix) and networking (Netware, Windows NT) v. Utility Softwares vi. Tools languages-High level (procedural and Visual and Object oriented)/low level and fourth generation languages (4 GLs) vii. Application softwares (Accounting Packages, Office ’97 and other productivity softwares) viii. Input / Output devices ix. Physical constituent parts of Personal Computer x. Main memory, cache memory, video memory, buffers, virtual memory xi. External storage-hard discs, floppy discs, tapes, Data, CD’s and VCD’s xii. Configuration of a Personal Computer

03.

Basic Networking and Communication concepts i. Local area networking ii. Server based and peer to peer networking 6. Modems and data transmission speeds iv. Wide area networking v. Client server computing vi. Distinction between a dumb terminal and an PC or intelligent terminal vii. Internet basics-e-mail, world wide web, browsing

04.

Elements of data processing i. Bits and Bytes, field ii. Data representation-Binary, BCD, Octal, Hexadecimal, ASCII 6. Data and Information iv. Databases, Files/Tables, database files structure or scheme Records, fields v. Relational Data Base Management Systems (RDBMs) vi. Word processing, Spreadsheets, groupware (Lotus Notes) 6. Batch processing, Online processing, Real time processing viii. Distributed (distributed server) versus pecialized database ix. Basic appreciation of nature procedural languages (i.e. COBOL, BAISC) and object oriented programming system in visual environment (visual BASIC, Visual C++).

05.

Security i. Backups and restore ii. Importance of disaster recovery policy and procedures iii. Passwords and other security (physical and data) features in modern computer system iv. Audit trail and evidences in accounting packages

06.

Modern trends in Information Technology Appreciation of current trends in computing introduced commercially in the last year or so ii. Appreciation of what is likely to come in IT in the near future that will significantly impact businesses i.

07.

Effective Business Information System with use of Information Technology where relevant i. Understanding of types of information required by management of manufacturing, trading, service and other business, for planning, pecialize, directing, coordinating, controlling and decision-making; ii. Ability to peciali business information needs according to their purpose, quality, quantity, frequency, consistency and form of presentation, document them using

descriptions, system flow charts, pecialize system design (system analysis and design) and communicating same to programme developers and IT experts for eventual pecializedn of such information system; iii. Basic appreciation of programme logic by way of flow charts and pseudo code for effective communication with software developers; iv. Understanding of system development stages i.e. need identification feasibility study, design prototyping (if necessary), programme development, testing and debugging, parallel run, data conversion and change-over process (if relevant), going live, post implementation evaluation and recommendations for future revisions and enhancements according to changed business needs, overall project management and control. 08.

Computerised Financial/Accounting System Ability to outline a pecialized accounting system using manual and/or pecialized (packages and/or bespoke softwares) elements which will meet identified needs and which is appropriate with the resources and objectives of the business; ii. Appreciation of financial audit risks introduced in pecialized financial/accounting systems; iii. Appreciation of integration of accounting systems with other systems for establishment of overall management information system in the pecialized; iv. Ability to evaluate accounting packages or softwares so developed for financial audit trails; v. Recommendation of security (physical and data) features consistent with aims and objectives of a given pecialized; vi. Internal controls for computerized accounting systems for small, medium and large pecialized and their implementation for completeness, accuracy and validity of information. i.

6.

Establishment of Standards and Controls in general in Computerized Business Systems i. Appreciation of accepted standards for analysis, design, software development through proper documentation and other procedures; ii. Controls in a computing environment i.e. organizational, personnel, access, change, security, task division, routine audit of computer systems in addition to financial audits, disaster recovery procedures as deemed necessary for a particular pecialized; iii. Controls and security in a networked environment and controls in a modern Internet system by way of encryption methodologies, firewalls, etc.

10.

Questions of equal marks may be set to both tests the depth of understanding and to cover as wide an area of the syllabus as possible

Schedule of recommended text & books For Section: 1, 2 & 4 # Peter Norton – Introduction to Computers # Hutchinson & Sawer – Computers & Information Systems # Pressman – Software Engineering # Ghezzi – Fundamentals of Software Engineering For Section: 3 # Tananburn – Computer Network # Minasi – The complete Network & Maintenance Guide # Jaisal – Networking Technology

For Section: 5, 7 & 8 # Awad – System Analysis & Design # Obrien – Management Information System # Lawdon – Management Information System # Gupta – Management Information System For Section: 6 # BPB Publication – Internet Complete # Jaisal – Networking Technology

Professional Examination II (PE II) Paper

I Accounting Full paper

:

Advanced

Financial 03 hours 100 marks

Objectives This course is designed to cover both micro and macro level accounting. At micro level, emphasis is given on company accounts including mergers, acquisitions and insolvency. At macro level, the course will cover governmental and national income accounting. Specification Grid Syllabus Contents Weightage (Indicative grouping of areas) (Indicative %) Company Accounts 30% Accounting for Construction Contracts, Accounting for Taxes on Income, Accounting for Research & 20% Development Costs 20% Merger & Reorganisation, Group of Companies, 15% Insolvency Accounts 15% Government Accounting National Income Accounting 100% Contents 6.

Company Accounts: Preparation of final accounts in accordance with statutory and accounting standards-Revenue recognition: recognition at point of sales-before delivery-after delivery-Revenue recognition for special sales transactions-Franchise. Provisions and Reserves-TaxationDirectors’ emoluments-Fixed Assets and Depreciation.

Issue of Prospectus, shares and debentures-Redemption of debentures-Dividend payments-Issue of Bonus Shares & Right Shares-Shares Split-Disclosure requirements as per the Companies Act 1994 and the Securities & Exchange Commission Act 1993. Preparation of Final Accounts. 02.

Accounting for Construction Contracts: [IAS 11]: Types of contracts-Accounting treatments of construction contract, costs and revenue-The basis of pecialized revenue on construction costs-Percentage of completion method-Completed contract method-Accounting for construction contracts-Disclosure [IAS 11]

03.

Accounting for Construction Contracts: [IAS 12]: Tax payable Method-Deferral Method-Liability Method-Tax Losses-Financial Presentation [IAS 12]

04.

Accounting for Research & Development Cost: [IAS 9]: Research and Development-Costs of Research and Development ActivitiesAccounting Treatment of Research and Development Costs-Disclosure.

05.

Merger & Reorganisation: [IAS 22]: Accounting for Business Purchase-Amalgamation-Absorption and Reconstruction.

06.

Financial Statements of Group of Companies: Accounting for Holding Companies [IAS 27]: Need for consolidation of Financial Statements-Scope of consolidated Financial Statements-Consolidation procedures-Consolidated Profit & Loss Account-Consolidated Balance Sheet. Accounting for Investment in Associates: [IAS 28]: The Equity Method-The Cost Method-Choice of Accounting Method in Consolidated Financial Statements.

07.

Accounting relating to Insolvency: Individual and Partnership firms

6.

Government Accounting: Nature and scope of Government Accounting; Summary of differences to commercial accounting; Government Accounting in developing countries-general observations. The frame-work and structure of government accounting in Bangladesh; Comptroller and Auditor General’s powers and duties; public accounts of central and local government; System of accounts; Finance and revenue accounts; Period accounts; Budgets; Annual Development Programme; public sector corporations and other government enterprises; Taxation and other revenue. The theory of government accounting: Planning and budgeting.

Account classification; Performance budgeting; Planning-Programming-budgetingsystems; Public Enterprise accounting; Pricing in the public sector, Taxation and government accounting. 6.

National Income (Social) Accounting: Nature and purpose of National Income Accounts; Comparison of system of National Accounts used in countries with market economies and system of material product balances used in countries with centrally planned economies. Definition of national product; Limitations of GNP Measure; Nature of consumption and investment. Double entry accounting in National Income Accounts; Source of data; Matrix presentation; input-output tables; National income accounts at constant prices; Treatment of capital gains and losses, value added, inter temporal adjustments; form, content and presentation of National Income Accounts, problem of National Income Accounting in Bangladesh.

Schedule of recommended text & books # Hay, L.E - Accounting for Government and Non- profit Entities # Ministry of Finance Government of Bangladesh – Introduction to Government Accounting # Patwary , S.U – Financial Administration in Bangladesh # Hanif and Mukherjee – Modern Accounting # Jain and Narang – Advanced Accounting # Douglas – Government and Non- profit Accounting # Harid, et.al – Advanced Accounting # Taylor – Consolidated Financial Statements # Backerman - An Introduction to National Income Analysis # Eddy and Goyal- National Income and Social Accounting Paper Auditing

II Full paper

Objectives

:

Advanced 03 hours 100 marks

As an advanced level Professional Examination, the Syllabus is intended to enable candidates to consolidate their knowledge and professional competence to conduct an adequate, effective audit on the financial information on a given situation. The examination is designed to assess the candidate’s skill and understanding in the application of the principles, methodologies and practices involved in general and pecialized audit situations. In answering examination questions, candidates are expected to have relevant developments of the contents of applicable International Standards on Auditing based on subject matters covered. The whole of the Auditing Syllabi from Foundation Exam to Professional Exam III (aggregating 200 marks) should be viewed in totality as a continuous process for learning and application of the candidate’s knowledgeability and understanding thereof in practical audit situations. Candidates are expected to have cumulative knowledge of the subject matters covered in the Auditing Syllabi of earlier examinations. Specification Grid Syllabus Contents (Indicative grouping of areas) Introduction, Objectives and Status of Audit Audit Principles and Methodologies Professional Ethics, Audit Independence and Concepts EDP, Group Accounts and Non-Financial Audit Specialised Audits and Reports

Weightage (Indicative %) 10% 30% 20% 20% 20% 100%

Contents 6. • • • • • • •

Introduction, Objectives and Status of Audit Development of Auditing Meaning, Nature and Features of an Audit Objective of an Audit Types and Classes of Audit Terms of Audit Engagement Legal and Professional Considerations Auditors’ and Directors’ Responsibilities Regarding Statements

Legal Position of an Auditor Companies Act 1994 Securities & Exchange Rules 1987 Other Laws and Regulations Accounting and Auditing Standards Meaning Objectives and Significance Standard Setting/Adoption Process IASC & IFAC (IAPC)/ACAB 02. • • • • • • • •

Audit Principles and Methodologies Audit Administration Audit Methodology Audit Strategy Stages of an Audit Tests of Control Substantive Procedures Review Techniques Formulation of Audit Opinion

Financial

•

Accounting and Internal Control Systems Meaning, Objectives & Basic Principles Governing Accounting System and Related Internal Controls Types, Characteristics and Significance of an Internal Control System Risk Assessment and Internal Controls Internal Check Internal Audit Internal Control Memorandum, ICQ & ICE Evaluation of Controls and Impact on Audit Work Letter of Weakness Planning an Audit - Meaning, Objectives and Basic Principles of Planning - Knowledge of Client’s Business - 1st year Audit Engagement - Planning Considerations and Memorandum - Interim and Final Audit - Audit Risk and Materiality levels - Audit Risk and Materiality levels - Audit Plans and Programmes - Budgeting and Staffing - Reliance on Internal Audit Multi Location Engagements Controlling an Audit - Meaning, Objectives and Basic Principle of Controlling - Audit Control Procedures - Delegation and Supervision of Work - Review of Working Papers, Notes and Queries Time and Costs Monitoring Quality Control - Principles and Purpose of Quality Control - Appropriate Skills and Competence - Establishment and Monitoring of Procedures - Quality Control Reviews Documentation of Audit work - Meaning, Objectives and Basic Principle of Documentation - Recording of work done - Types and purpose of working papers - Evidence of reviews, conclusions and actions - Evaluation of significant matters Audit Evidence - Meaning, Objectives and Basic Principle of Audit Evidence - Nature and Sources - Existence - Ownership - Sufficiency - Relevance - Reliability Audit Techniques and Procedures - Inspection, Enquiry and Observations - Computation and Appraisal - Management Representations

-

Sampling Techniques Substantive Testing Analytical Review Depth Checking Directional and Rotational Testing Use of CAATs Reliance on other Auditors and Experts

Audit Verification Procedures-Final Audit - Nature, Objectives and Procedures of Verification - Basic Verification Techniques & Methodologies - Compliance Procedures, Substantive Procedures & Art - Cut off Procedures, Attendance at Stock taking and Circularization of Debtors & Creditors, etc. - Vouching and Verification Procedures in respect of relevant Balance Sheet and Profit & Loss A/c Items Audit Conclusion and Reporting (Auditor’s Report on) - Overall Review of Financial Statements and Audit Work - Post-Audit Reviews - Considerations for Formulation of True and Fair View Audit opinion - Basic Elements of Auditor’s Report - Events and Circumstances - Types of Audit Opinion - Unqualified Audit Opinion (with illustrations) - Qualifications in Auditor’s Report (with illustrations) - Qualified Opinion - Disclaimer Opinion - Adverse Opinion 03.

Professional Ethics, Audit Independence and Concepts Professional Ethics Bangladesh C.A. Bye-laws, 1973 IFAC Guidelines on Professional Ethics - Audit Independence - Audit Concepts Auditor’s Reasonableness and Professional Judgements Truth and Fairness of Financial Statements Going Concern Audit Materiality Related Party Transactions Audit Sampling Management Representations Subsequent Events & Contingencies -

04.

EDP, Group Accounts and Non-Financial Audit • EDP Audit Auditing in Computer Information System (CIS) Environment Internal Controls in a CIS Environment Computer Assisted Audit Techniques (CAAT) • Group Accounts Audit • Joint Audits • Non-Financial Audit Management (Operations) Audit Performance Audit Social Audit Environment Audit

05.

Specialised Audits and Reports Audit of: • Banks • Insurance Companies • Other Financial Institutions (e.g. Investment/Merchant Bank & Finance Cos.) • Charities, Trusts and Co-operatives, Provident and Pension Funds • Educational Institutions and Friendly Societies • Public Sector Corporations and Projects • Value of Money Audit • Cost Audit • Investigations • Prospectus and Profit Forecast • Audit of Accounting Estimates • Examination of Prospective Financial Statements • Audit of Small Businesses • Review Engagements • Reports of Proprietorship and Partnership • Accountants’ Report • Other Information in Documents Containing Audited Financial Statements • Auditor’s Report on Special purpose Audit Engagement Schedule of recommended text & books Bank Audit Guide – ICAB Publication Insurance Audit Guide – ICAB Publication Modern Auditing & Assurance Services – Gill Modern Auditing – Gill Information System Auditing & Assurance – Hall Auditing : Integrated Concepts and Procedures – Taylor Modern Auditing – Boynton Principles & Practice of Auditing – Pagare, Dinkar Contemporary Auditing – Kamal Gupta Auditing Principles and Procedures – Dr. Khawaja Amjad Saeed Members Handbook, ICAB IFAC Handbook of Auditing & Ethics Pronouncements IFAC Code of Ethics for Professional Accountants IFAC Handbook of Technical Pronouncements – International Information Technology Guidelines IFAC Handbook of Technical Pronouncements – International Public Sector Accounting Standards

Paper Practices

III

:

Corporate

Full paper Specification Grid Syllabus Contents (Indicative grouping of areas) Companies Act 1994 Other Laws, Rules and Regulations Secretarial Practices

Contents

Laws and 03 hours 100 marks Weightage (Indicative %) 40% 25% 35% 100%

6.

Provisions of the Companies Act 1994

02.

Other Laws, Rules and Regulations (a) The Insurance Act 1938; (b) The Bank Company’s Act 1991; I Laws relating to Securities & Exchange (d) Laws relating to Finance and Leasing Companies

03.

Secretarial Practices (a) Procedure for incorporation of a Company. Expert knowledge of various clauses in the Memorandum and Articles of Association and documents to be prepared and submitted; (b) Filing Requirements, knowledge of the forms and information to be filled including the timeframe. Laws on disclosure of accounting and other information of publicly held companies; I Maintenance of statutory books and registers under relevant statutes. Laws on providing copies of maintained or filed records to members and outsiders by the Company and the Registrar; (d) Holding of Company meetings, Preparation of notice, agenda and minutes of meetings of directors and members including filing requirements, where applicable; (e) Knowledge of provision relating to capital, shares and debentures, Flotation of corporate securities and prospectus, including provisions on underwriting, brokerage, discount and premium on shares, bonus and right shares, application, allotment, transfer and transmission of shares, stock exchange listing and filing.

Schedule of recommended text & books # Insurance Act, 1938 # Bank Company’s Act, 1991 # Laws relating to Securities and Exchange # Laws relating to Finance and Leasing Companies Paper

IV Accounting hours Full paper

:

Management 03 100 marks

Specification Grid Syllabus Contents Weightage (Indicative grouping of areas) (Indicative %) 1.Introduction 5% 2. Variable Costing &Cost- Volume, Pricing, Relevant 20% Costing 5% 3. Managing Quality and Time 35% 4. Standard Costing, Revenue Variances and budgeting Process: (i) The Basic Framework of Budgeting (ii) Master Budget (iii) Flexible Budget 20% (iv) Other Aspects of Budgeting 5. (i) Responsibility Accounting and Transfer Pricing in Decentralised Organisation 15% (ii) Performance Evaluation 6. (i) Quantitative Models for Planning and Control (ii) Economics of Information

100% 6.

02.

Introduction: Management Accounting Defined; Relationship between Management Accounting and Financial Accounting; Relationship between Management Accounting and Cost Accounting; Role of Management Accounting; Characteristics of Management Accounting Information; Changing Business Environment; JIT, TQM, Process Reengineering, Automation; Theory of Constraints (TOM), Benchmarking and Continuous Improvement, Creating Value in Organisation; Ethics of Management Accountant Professionals.

Variable Costing and Cost-Volume-Profit Analysis: Variable Costing for Decision Making; Variable Costing vs. Absorption Costing, Income Statement; Reconciliation of Absorption Costing with Variable Costing; Income Advantages and Disadvantages of Variable Costing and Absorption Costing. Uses of CVP Analysis: Break-Even Point and shut-down Point: Underlying Assumptions of Break-Even analysis; Graphical Approach of CVP Analysis; Incremental Analysis for Short-Run Changes; Margin of Safety; Operating Leverage; CVP Analysis in a Multiproduct Environment; ABC’s Effects on CVP.

03.

Pricing: Major influence on Pricing: Short-Run Pricing Decisions; LongRun Pricing Decision; Cost Analysis for Pricing; ABC Costing and Pricing Target Costing; Social Responsibility and Pricing.

04.

Relevant Costing: Concept of Relevance; Sunk Cost; Relevant Cost; Relevant Costs for Specific Decisions; Make-or-Buy Decisions; ‘Scarce Resource Decisions’; Sales Mix Decisions; “Special Order Decisions’; Product Line Decision, Further Processing Decision.

05.

Managing Quality and Time: Quality: Production View of Quality and Customer View of Quality; Benchmarking; Total Quality Management (TQM), Quality Costs; Control Costs and Failure Costs; Identifying Quality Problems; Time in a Competitive Environment; New Product Development Time and Operational Measures of Time.

06.

Standard Costing: Development of Standard Cost System; Considerations in Establishing Standards; Setting Standards for Material, Labour and Manufacturing Overhead; Variance Computations for Materials, Labour and Manufacturing Overhead; Mix and Yield Variances for Materials and Labour; Disposition of Variances; Analysis of Material, Labour and Overhead Variances.

07.

Revenue Variances: Sales Price Variance; Sales Volume Variance; Sales Mix Variance; Sales Quantity Variance; Market Size and Market Size Variances.

08.

Budgeting Process (i) Basic Framework of Budgeting: Budgeting; Advantages of Budgets; Planning and Control; Budgets and Standards; Principles of Budgeting-Relation to Organisational Structure and Environment, Budget Revisions, Budget Committee, Budget Period, Bottom-up Budgeting Approach. (ii)

Master Budget: Master Budget Interrelationships; Sales Forecasts; Production-Related Budgets; Marketing and Administrative Budgets, Cash Budgets; Budgeted Income Statement, Budgeted Statement of Financial Position.

(iii)

Flexible Budget: Static Budgets and Flexible Budgets; Limitations of Performance Evaluation with Static Budgets; Preparation of a Flexible Budget.

(iv)

Other Aspects of Budgeting: Behavioural Aspects of Budgeting; Zero Base Budgeting; Using ABC in Budgeting; Performance Budget and Performance Reports.

6.

Responsibility Accounting and Transfer Pricing in Decentralised Organisation: Decentralisation; Responsibility Accounting System; Types of Responsibility Centres; Transfer Pricing, Purposes of Transfer Pricing; Transfer Pricing Bases-Cost-Based Transfer Prices, Market-based Transfer Prices; Negotiated Transfer Prices, Dual Transfer Pricing; Transfer Prices in Multinational Setting; Behavioural Implications of Transfer Pricing.

6.

Performance Evaluation: Designing a system of Performance Measurement; Traditional Financial Performance Measures-Divisional Profits, Cash Flow, Return on Investment, Residual Income; Limitations of Traditional Measures; Performance Measures in World-Class Companies-Non-Financial Measures, Throughout and Multiple Performance Measures; Activity-Based Management and Performance Evaluation; Performance Evaluation in Multinational Settings.

6.

Quantitative Models for Planning and Control: Programme Evaluation Review Technique; PERT-Cost Analysis; Decision Tree Analysis, Linear Programming Model; Optimal Solution under LP with Graph.

6.

Economics of Information: Cost Data and Information Economics; Opportunity Loss Concept; Expected Value of Information; Other Considerations in Information Evaluation; Management Uses of Information Economics.

Schedule of recommended text & books # Barfield, Raiborn and Kinney - Cost Accounting : Traditions and Innovations (3rd Edn.) # L . Gayle Rayburn - Cost Accounting : Using a Cost Management Approach (5th Edn.) # Michael Maher- Cost Accounting : Creating Value for Management # Ray H. Garrison and Erlc W. Noreen – Managerial Accounting (8th Edn.) # Deakin and Maher - Cost Accounting (3rd Edn.)

Professional Examination III (PE III) Paper

I

: Issues Full paper

Section

Financial

Professional 100 marks

I Reporting 03 hours Half paper

Reporting and 03 hours :

Financial 50 marks

Objectives: The course is designed to evaluate various legal provisions influencing financial reporting by Companies. The course covers all Accounting Standards and their critical evaluation.

Specification Grid Syllabus Contents Weightage (Indicative grouping of areas) (Indicative %) Limited Company’s Financial Statements, Group 25% Accounts, Accounts of Bank and Insurance Companies Other Financial Reporting Issues, Reporting of Unusual 35% Events, Special Types of Liabilities, Fund Flow & Cash Flow Statements, Framework for preparation and Presentation of Financial Statements International Accounting Standards as adopted in 20% Bangladesh, Developments of International Standards and Current issues Analysis and Interpretation of Financial Statements, Financial 20% Reporting by Multinationals, Disclosure of Accounting Information to Trade Union Leaders 100% Contents 01.

Limited Company’s Financial Statements: Contents of Annual Reports : Board of Directors-Financial History-Year at a glance-Statement of Value Added-Chairman’s Statement-Report of Board of Directors-Auditor’s Report-Profit & Loss Account-Balance Sheet-Cash Flow Statement-Notes to Accounts. Explanation and critical evaluation of: Provisions of the Companies Act, 1994 : Sections 182, 183, 184, 185, 189 and 191. Provisions of the Securities and Exchange Rules, 1987.

04.

6.

Group Accounts: Consolidated Balance Sheet and Profit and Loss Account – Notes to Accounts. Provisions of the Companies Act, 1994 : Sections 186, 187 and 188.

6.

Accounts of Bank and Insurance Companies: Profit & Loss Account and Balance Sheet of Banks & Insurance Companies. Provisions of the Companies Act, 1994 : Section 192. The Insurance Act, 1938 : Sections 6, 7, 8, 9, 10, 11, 12. The Bank Company’s Act, 1991 : Section 32-44.

Other Financial Reporting Issues: Limited Companies: Organisation and Shareholder’s Equity : Ordinary Shares & Preferred Shares--- Their Characteristics-Role of underwriters-Share Pricing, Market Value; Book Value and Market Price. Reporting of Unusual Events [IAS 6] : Developing predictive information-Reporting Unusual events-Continuing operation-Discontinuing operation-Earning per share-Fully diluted & earnings per share. Special Types of Liabilities: Debentures and Bonds Payable-Accounting for bonds---The Concept of Present value etc. Lease obligations-Capital Leases-Deferred Income Taxes. 6.

06.

Fund Flow & Cash Flow Statements [IAS 6] : Distinction between Fund Flow Statement and Cash Flow Statement. Preparation of Fund Flow Statement. Preparation of Cash Flow Statement.

Framework for preparation and Presentation of Financial Statements: Objectives of Financial Statements – Underlying AssumptionsQualitative Characteristics of Financial Statements-True and Fair ViewElements of Financial Statements-Recognition of Elements of Financial

Statements-Measurement of Elements of Financial Statements-Concept of Capital and Capital Maintenance. 6.

08.

International Accounting Standards as adopted in Bangladesh: Standards relating to disclosure of accounting policies-Valuation and presentation of inventories-Consolidated financial statementsDepreciation Accounting-Information to be disclosed in Financial Statements-Statement of Changes in Financial Position-Unusual and Prior Period items and Changes in Accounting Policies-Contingencies and errors occurring after Balance Sheet date-Reporting Financial Information by Segments-Property, Plant and Equipment-Accounting for Leases- Accounting for Investments in Associates-Financial Reporting in Hyperinflationary situations-Disclosures in Financial Statements of Banks and Similar Financial Institutions [Corporation with SSAP and FAS].

Recent Developments of International Accounting Standards and Current Accounting Issues. 6.

Analysis and Interpretation of Financial Statements: Demand and Supply of Financial Statement Information-Techniques of Financial Statement Analysis-Cross-sectional Analysis of Financial Statement Information-Time series Analysis-Forecasting Financial Statement Information-Capital Markets and Information Efficiency-Asset Pricing and Financial Statement Information- Capital Markets and Corporate Information Releases-Debt Rating and Financial-Distress Analysis and Financial Information-Loan Decisions and Financial Information.

6.

Financial Reporting by Multi-nationals: Financial Reporting in a Transnational context-International Joint Venture-Goodwill AccountingSegment Reporting-Foreign Currency Translation-Inflation AccountingInternational Financial Reporting- Financial Reporting by Multi-national Enterprises.

6.

Disclosure of Accounting Information to Trade Union Leaders and to Employees.

Schedule of recommended text & books # Stickney – Financial Reporting # Adams and Roberts – Financial Accounting by Multinationals # Dasgupta – Financial Reporting in India # IASC Publication (IAS) # ICAB Publications (BAS) Section

II Issues 03 hours Half paper

:

Professional 50 marks

Specification Grid Syllabus Contents Weightage (Indicative grouping of areas) (Indicative %) Audit Independence 5% Harmonization of Accounting/Auditing Profession 15% Professional Ethics 5% Non-financial Auditing 10% Computerization of Accounting/Auditing functions 5% CASE STUDY-Simulation of Practical Financial 20%

Reporting and Auditing practice Cost Audit Audit of Group Companies, Associates Joint Audit

Holding/Subsidiaries,

10% 10% 5% 15%

Audit approaches and Methodology in EDP Environment and Internal Control System

100% Contents 1.

2.

3. 4.

5. 6.

Audit Independence ICAB Bye-laws IFAC Guidelines Harmonization of Accounting/Auditing Profession • Globalization of Accounting/Auditing Profession • Future of Accounting/Auditing Profession • Challengers and Opportunities of Accounting/Auditing Profession • Emerging Challenges of New Millennium-Positioning/re-positioning the profession for the New Millennium • WTO-its implication on Accountancy/Auditing Profession • Challenges and Opportunities under WTO/GATS • National vs. International Standards • Implementation of IAS & ISA-Implication of Financial Reporting and Audit Practice in Bangladesh • Roles of IFAC, IASC, IOSCO, WTO, etc. on Accountancy Profession • Mutual Recognition of Accounting Qualifications (AQ) & Cross Boarder Practice of Accountancy Profession-Threats, Challenges, OpportunitiesSWOT Accountant’s roles as (future) Business Managers, Business Analysis and Advisors (proaction) Attainment of IFAC Standards as Benchmark Education-Entry requirements Syllabus Examination Experience CPE (PQE) Professional Ethics • Value from Money-Its applications, benefits and limitations Non-financial Auditing NFA-Types, Objectives, Methods and Stages Management Performance Audit Social Audit Environment Audit Computerization of Accounting/Auditing functions • •

CASE STUDY-Simulation of Practical Financial Reporting and Auditing practice • • • • •

Tea Plantation Upazila/Municipal Corporation Hotels, Construction Firms Stock Brokerage Firm HP and Leasing Companies

• 7.

PSC and SOE (BJMC, BTMC, BSEC Projects Cost Audit

6.

Audit of Group Companies, Holding/Subsidiaries, Associates

• •

Legal and Accounting considerations Administrative Considerations

6.

Joint Audit

•

Using the work of another Auditor [ISA 5]

6.

Audit approaches and Methodology in EDP Environment and Internal Control System Audit and EDP Environment Computer Audit Auditing of Computerised Accounting System [ISA 6, 16, 20, 29] Auditing around and through Computer Audit trail, Loss recovery

• • • • •

Schedule of recommended text & books Bank Audit Guide – ICAB Publication Insurance Audit Guide – ICAB Publication Modern Auditing & Assurance Services – Gill Modern Auditing – Gill Information System Auditing & Assurance – Hall Auditing : Integrated Concepts and Procedures – Taylor Modern Auditing – Boynton Principles & Practice of Auditing – Pagare, Dinkar Contemporary Auditing – Kamal Gupta Auditing Principles and Procedures – Dr. Khawaja Amjad Saeed Members Handbook, ICAB IFAC Handbook of Auditing & Ethics Pronouncements IFAC Code of Ethics for Professional Accountants IFAC Handbook of Technical Pronouncements – International Information Technology Guidelines IFAC Handbook of Technical Pronouncements – International Public Sector Accounting Standards Paper II 03 hours

II Full paper

Taxation 100 marks

Aim: The aim is to examine:: The areas of taxation, duties, fees etc; The ability to recognize and advise on the more usual practical problems. Specification Grid Syllabus Contents Weightage (Indicative grouping of areas) (Indicative %) Income Tax: 60% Expert knowledge of law and practice of Income-Tax including practical problems and interpretation of statute/rules/regulations

Other Taxes: Value Added Tax (VAT0 and Gift tax including practical problems Customs: Import duty etc., Court fees, Stamp-duty, Registration fee, Motor vehicles tax and Travel tax

25% 15% 100%

Statutes/Rules/legal references: 1.

2.

3. 4. 5. 6. 7. 8.

Income tax (IT): a. Income Tax Ordinance (No.XXXVI) of 1984 – including updated amendments made by the annual FO/FA thereto: IT Manual: Part-I : Sections: 01 – 187 : Schedules: 01 – 7 b. Income Tax Rules (SRO No.39-L/85 of 14 January 1985) 1984 – including updated amendments made thereto: Rules: 01-67 c. Various Notifications/SROs and Orders made from time to time there under. Value Added Tax (VAT): a. VAT Act (No.22) of 1991 – including updated amendments made by the annual FO/FA thereto: Sections 01-73 and Schedules 1-3 thereto b. VAT Rules 1991: SRO No.178 – Law/91/3-Mushak of 12 June 1991 – including updated amendments made thereto: Rules 01-43 and Forms: Mushak: 01-29 c. Various Notifications/SROs and Orders made from time to time there under. Customs Act (No.IV) of 1969 – updated: Import-duty (ID), Supplementary-duty (SD) under VAT law and Infrastructure Development Sur-charge (IDSC) under Finance Act (No.15) of 1997. Court Fees Act (No.VII) of 1870 – dated Stamps Act (No.II) of 1899 – updated Registration Act (No.XVI) of 1908 – updated Motor Vehicles Tax: Motor Vehicles Tax Act (Bengal Act No.I) of 1932 – updated Motor Vehicles Ordinance (No.LV) of 1983 - updated Travel Tax: Finance Act (No.XXIII) of 1980 – updated & Finance Ordinance (No.XLV) of 1986 – updated

*** Paper Management

III Full paper

:

Financial 03 hours 100 marks

Objectives The course is designed to provide a sound understanding of the conceptual principles and practical application of modern analysis of financial decisions and of the relations between sources of finance and financial management. The candidates are expected to have complete understanding for the preparations, evaluation and implementation of practical business plans and reports on strategic and operational business decisions.

The paper is designed to cover theory and practice of financial management with special reference to Bangladesh and real life situations (including case studies) may be tested in the examination. Specification Grid Syllabus Contents Weightage (Indicative grouping of areas) (Indicative %) Role and Objective of Financial Management, Financial 10% Markets and Institutes, Essential Concepts in Financial Management Valuation of Securities 5% Portfolio Theory and Capital Asset Pricing Model 10% Source of Finance 5% Capital Budgeting 20% Working Capital Management 10% Cost of Capital, Capital Structure and Leverage 10% Dividend Policy 10% Introduction of Derivatives and Option Theory 5% Mergers and Acquisition, Foreign Exchange Management 15% 100%

Contents 01.

Role and Objective of Financial Management Introduction: Financial Management Decisions; Objectives of Financial Management; Agency Problems; Financial Objectives of Public Enterprises. 02. Financial Markets and Institutes Financial Markets-Money Markets and Capital Markets, Primary Markets and Secondary Markets, Organized and Over-the Counter Markets; The Efficiency of Financial Markets-Allocative Efficiency, Operational Efficiency, Information Processing Efficiency; Role of Financial Institute in Financial Markets; International Financial Market.

03.

Essential Concepts in Financial Management

The Time Value of Money; Analysis of Risk and Return; Capital Asset Pricing Model; Arbitrage Pricing Theory. 04. Valuation of Securities (i) Characteristics and Valuation of Fixed-Income Securities: Characteristics of Long-Term Debts; Bond Valuation; Characteristics of Preferred Stock; Valuation of Preferred Stock. (ii) Characteristics and Valuation of Common Stock- Characteristics of Common Stock-Valuation of Common Stock; Valuation of Closely Held Firms. 05. Portfolio Theory and Capital Asset Pricing Model Portfolio and Portfolio Management; Market Portfolio; Efficient Portfolio; Selection of Optional Portfolio; Objectives of Portfolio Management; Portfolio Risks-Systematic and non-systematic Risks; Analysis of a Two-Asset Portfolio, Extension to a MultiAsset Portfolio; Risk-free Asset Combined with Risky Securities; Capital Asset Pricing Model; Implication of Capital Asset Pricing Model (CAPM); Criticism of CAPM. 06. Source of Finance (i) Long-term Sources: Ordinary Shares; Preference Shares; Debt FinanceDebentures, Convertible and Warrants. (ii) Lease Financing: Types of Lease-Operating Lease, Finance Lease, Sale and Leaseback, Leverage Lease; Lease or Buy Decisions.

(iii)

Short-term Finance: Trace Credit; Accrued Expenses and Deferred Income; Accounts Receivable Financing Factoring; Factoring; Short-Term Loan. (iv) Financing of Small Business; Venture Capital; Business Angles. 07.

08.

09.

10.

11.

12.

13.

Capital Budgeting (i) Capital Budgeting and Cash Flow Analysis; Basic Framework for Capital Budgeting; Estimating Cash Flow; Problems in Cash Flow Estimation. (ii) Capital Budgeting Decision Criteria: Techniques for Evaluating Investment Projects; Capital Rationing and Capital Budgeting Decisions; Inflation and Capital Budgeting, Mutually Exclusive Investment having unequal Lives. Framework for International Capital Expenditure Decisions. (iii) Capital Budgeting and Risk; Measuring Project Risk; Capital Budgeting and CAPM; Ris Evaluation Approaches Risk Adjusted Discount Rate Approach, Certainty Equivalent Approach, Probability Approach, Decision Tree Approach, Sensitivity Analysis. Working Capital Management Working Capital Policies; Factors Affecting Working Capital of a Firm; Forecasting Working Capital Requirement; Management of Debtors, Inventory and Cash. Cost of Capital, Capital Structure and Leverage (i) Cost of Capital-Component Costs of Capital, Marginal Cost of Capital, Weighted Cost of Capital; Modigliani and Miller’s Views on Cost of Capital; Cost of Capital and Adjusted Cost of Capital. (ii) Capital Structure: Capital Structure and Financial Structure; Theories of Capital Structure-Traditional Approach and MM Approach; Designing Capital Structure. (iii) Leverage: Financial Leverage; Operating Leverage; Combined Leverage; Effects of Financial Planning on Leverage. Dividend Policy Dividend Policy-Constant Payment Ratio, Stable Dividend Residual Dividend Policy; Determinate of Dividend Policy; Scrip Dividend and Stock Dividend; Theory of Dividend Irrelevancy Introduction of Derivatives and Option Theory Types of Options; Simple Option Strategies; Call Options and Future Compared; Factors Affecting Option Values; Application of Option Pricing Theory to Corporate Finance; Swaps. Mergers and Acquisitions Merger and Takeover Activity; Motives for Merging; Takeover Tactics; Financing Acquisition. Foreign Exchange Management Factor Influencing Exchange Rates; Managing Transaction Risk; Currency Future Contracts; Foreign Exchange Risk.

Schedule of recommended text & books # L. J. Gitman -Principales of Managerial Finance (8th Edn.)(Addison Wesley) # R Charles Moyer, James R. Mcguian and William J Kretlow -Contemporary financial Management (8th Edn.)(West) # J.M. Samuels, FM Wilkis and R.E. Brayshaw - Management of Company Finance (6th Edn.) (International Thomson Business Press).

***

Paper Management hours

IV Full paper

:

Strategic 03 100 marks

Objectives The course is designed to test candidates analytical ability in multidisciplinary areas to provide effective information for proactive management decisions in strategic business planning and effective resources allocation. Specification Grid Syllabus Contents (Indicative grouping of areas) Concepts of Strategic Management Strategic Analysis Strategic Formulation Strategy Implementation

Weightage (Indicative %) 15% 25% 30% 30% 100%

Contents 01. Concepts of Strategic Management Strategy and Strategic Management Defined; Importance of Strategic Management; Tasks of Strategic Management; Strategery Managers and their Roles; StrategyMaking Tasks; Factors shaping the Strategy and Ethics. 02.

Strategic Analysis: The Role of Situation Analysis is Strategy-Making; The Methods of Industry and Competitive Analysis; Identifying Dominant Economic Characteristics of Industry, Forces that change Industry, Analyzing Strength of Competitive Forces, Competition Analysis, Pinpointing the Key Factors for Competitive Success. Company Situation Analysis. Evaluating Current Strategy; SWOT Analysis; Strategic Cost Analysis and ActivityCost Chains; Competitive Strength Assessment; Determining Strategic Issues that need to be addressed.

03.

Strategic Formulation: Managing for Competitive Advantage: Competitive Advantages; Market Focus and Competitive Advantages; Strategic Management in different stages of Market Life Cycles. Managing for Customer Value: Managing Strategically at the Functional Level; Kaizen-Continually Improving Customer Value; Strategic developments in Six Critical Functions. Corporate Diversification Strategic: Role of Diversification; Evaluating Benefit of Diversification; Managerial Behavior that Limits Benefits of Diversification; Forms of Diversification, Means of Diversification; Divestments-Neglected side of Diversification.

04.

Strategy Implementation: Translating Strategy in Action and Achieving Integration. Framework for understanding Implementation Issues; Technical aspects of Strategy Implementation; Achieving Integration.

Strategy Implementation—Organisation Structure, Budgets and Support Systems: Dimensions of Structure, Type of Structures-Linkages to Strategy; Linking Budgets with Strategy; Putting Internal Administrative Support Systems in Place-Creating Strategy-Supportive Policies and Procedures, Installing Supporting Systems. Strategy Implementation-Control, Commitment, Culture and Leadership: Strategic Control and Evaluation; Developing an Effective Reward Structure; Developing a Strong Organisational Culture; Exerting Strategic Leadership. Schedule of recommended text & books # Arthur A Thompson, Jr. and A.J Strickland III – Strategic Management: concepts and Cases (Irwin, 7th Edn.) # Gregory G Dess and Alex Miller - Strategic Management

***