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F i n a n c i a l

CPA F u n d s

P r a c t i c i n g

C e r t i f i c a t e

M a n a g e r i a l

C o n t i n u o u s

P r o f e s s i o n a l

D e v e l o p m e n t

C o s t

E X P L O R E

F o r e n s i c

T a x

Curriculum

The Association of International Certified Public Accountants

WWW.CPAPRO.EU | WWW.CPAPRO.PK CPAPRO

CPA Professional

Programme

18 ABBEY HOUSE, STOKE ROAD, SLOUGH, BERKSHIRE, SL2 5AG, UK. P: (44) 77-8696-1247 | X: (44) 17-5372-2180 | F: (44) 17-5372-2181 | PK (9251) 252-1-251 / 252-1-252 | E: [email protected] / [email protected]

PROGRAMME ASSESSMENT & EVALUATION DEPARTMENT

FACILITATED BY: CURRICULUM REVIEW COMMITTEE (CRC)


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PROGRAMME ASSESSMENT & EVALUATION DEPARTMENT

FACILITATED BY: CURRICULUM REVIEW COMMITTEE

About CPA New Curriculum 1: CPA Curriculum Experts Panel Report 3 2: The Course Approach 5 3: Revised Course Subjects and Credit Hours Detail 8 4: Teaching Philosophy & Coding 9 5: Methodology 11 6: Programme Detail & Features 12 7: Compatibility with other Accounting Professional Bodies 13 8: Admission Criteria & Routes 14

About CPA (Old Scheme)

What We Offer? 15

Programmed Arrangement 16

Programme Detail & Credit Hours 17

Guidelines To: 18

Become A Student

Become A CPA

Become a Practising Professional (Practicing Certificate)

Distance Learning

About Our Qualified CPAs 20 CPA Units Detail

01: Financial Accounting 22 02: Business Law 30 03: Economics & Business Environment 37 04: Business Mathematics & Statistics 42 05: Income Tax 47 06: Cost & Managerial Accounting 54 07: Business Communication & Report Writing 61 08: Audit & Assurance 64 09: Financial & Corporate Reporting 73 10: Corporate Law 84 11: Financial Strategy 90 12: Corporate Governance 97 13: Advanced Taxation 105 14: IT Audit & Control 110 15: Advanced Accounting 116 16: Advanced Audit 123 17: Fraud Audit & Forensic Accounting 130 18: Internal Audit Role in Risk & Control 138 19: Advanced Performance Management 145

Advanced Case Studies, Emerging Trends, Articles

Guidelines 154

Structure 155

Flow of Contents 157

Content of Key Chapters 159

Citation Style 163

The Reference List 166

Numbering & Captions 170

Final Remarks 173

CONTENTS

03 05 08 09 11 12 13 14

15 16 17 18

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22 30 37 42 47 54 61 64 73 84 90 97

105 110 116 123 130 138 145

154 155 157 159 163 166 170 173


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CPA Curriculum Experts Panel Report

Overview:

In January 2013, The Association of International Certified Public Accountants Aca-

demic Council suggested The Framework for International CPAs Curriculum which

advised the association CPA Curriculum Review.

Since then, the association Board of Directors has been considering the council’s rec-

ommendations, informed by the consultation with key stakeholders, including subject

experts and regional representatives of the Public Accounting & Finance profession

from UK, Pakistan, Malaysia and UAE.

To design a truly international and comparable curriculum, the course structures of

the most prominent accounting bodies of the world were considered e.g. United King-

dom, Ireland, Australia, USA, Malaysia and Pakistan: -

ACA (ICAEW) The Institute of Chartered Accountants, UK

ACCA (UK) The Association of Chartered Certified Accountants, UK

CMA (CIMA) Chartered Institute of Management Accountants, UK

CPA (Ireland) The Institute of Certified Public Accountants in Ireland

MICPA (Malaysia) Malaysian Institute of Certified Public Accountants

CMA (ICMAP) Institute of Cost and Management Accounts of Pakistan

CA (ICAP) The Institute of Chartered Accounts of Pakistan

CPA (ICPAP) The Institute of Certified Public Accountants of Pakistan

CPA (Australia) Australia

CPA (AICPA) American Institute of Certified Public Accountants, USA

CMA (IMA) The Institute of Management Accountants, USA

CFA (CFAI) CFA Institute, USA

The experts’ notes to the course structures of above mentioned accounting profession-

al bodies are given in excel file (CPA complete structure), which can be downloaded

and viewed separately.


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The New CPA Curriculum Bring To Higher Standards of Learning

The CPA New Curriculum is more demanding and comparable than the existing sylla-

bus. It aligns The Association of International Certified Public Accountants with

IFAC’s standards and other CPA & professional bodies of the world, as shown from the

following table:

By raising standards in the following pillars, the revised curriculum makes it unique,

differentiate and global in nature & course structure to well equip the qualified CPAs

to do more advanced work and excel globally in Public Accounting & Finance field:

Taxation and Laws pillar

Investment and Reporting pillar

Enterprise pillar

Finance pillar

Performance pillar

Audit pillar

For further detail or record your comments on revised curriculum, please write to: [email protected] Attn: Mr. Ahmad Noor MBA (NUST), BA, DCA, CPA, CFA Controller Examination Army Public College of Management Sciences (APCOMS)


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The Course Approach

Some professional bodies are more focusing on financial accounting and finance field

while the other’s focal point is towards management accounting and performance pil-

lar. Whereas some more concentrate on taxation and auditing things, and some feel

that decision making and financial investment is much more important that’s why

they are producing financial accountants, management accounts, public accountants,

financial analysts and taxations experts etc. Therefore, we tried our level best that the

student of our CPA Programme should have the diverse knowledge of all major areas

and the employer will have more pleasure to hire our qualified accountants.

In CPA New Curriculum the approach is based on cognitive and constructivist learn-

ing process. The detail is given in later parts. However, CPA Curriculum introduced

knowledge management or our valued members through two sub-approaches:

In Knowledge pillars or Vertical approach, their performance is monitored

through important knowledge areas in which they will have to be excelling

in real marketplace.

The Foundation or Level based learning or Horizontal approach, which can

be termed as Traditional approach, takes the trainee students in a natural

flow from basics and operational level learning to managerial and strategic

level skills development to achieve required competency level.

The members are required to pass 5 stages / awards to qualify the superior designa-

tion of CPA:

Foundation in Public Accounting

Certificate in Public Accounting

Diploma in Public Accounting

Advanced Diploma in Public Accounting

Competency Level Test

Award of Certified Public Accountant


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Contd: The Course Approach

We have designed the unique educational product having six following pillars. It is our

programme differentiation and gives our qualified CPAs a comparative advantage in

the real marketplace, (complete course lists of Old and New Syllabus is given in the

following pages)

Taxation and Laws pillar

Investment and Reporting pillar

Enterprise pillar

Finance pillar

Performance pillar

Audit pillar


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Contd: The Course Approach

The course is also divided into five levels: -

Foundation level

Operational level

Management level

Strategic level

Competence level


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Revised Course Subjects and Credit Hours Detail


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Teaching Philosophy & Coding

To equip our qualified CPAs with creative problem solving skills and to be more pro-

ductive in novelty business situations, we introduced two different approaches in re-

vised CPA programme, i.e., Vertical approach and Horizontal approach.

While working with cognitive and constructivist learning, we empower our members

with dynamic and innovative theories. To be more flexible with their tough study

schedule, we support them with different options in reaching Competency level, i.e., to

earn a quality CPA designation.

Through course vertical and horizontal course coding, they better judge their weak

learning areas through Knowledge pillars and Foundation bases.

In Knowledge pillars or Vertical approach, their performance is monitored through im-

portant knowledge areas in which they will have to be excelling in real marketplace.

The following codes are assigned to aid or before deciding the entry level after evaluat-

ing their prior learning:

Taxation and Laws pillar … ”TL” 1, 2, 3 …

Investment and Reporting pillar … “IR” 1, 2, 3 …

Enterprise pillar … ”E” 1, 2, 3 …

Finance pillar … ”F” 1, 2, 3 …

Performance pillar … ”P” 1, 2, 3 …

Audit pillar … ”A” 1, 2, 3 …

Competency pillar … A, B, C

(This approach is useful for working executives or students who have prior knowledge

in Accounting & Finance field or who have learnt basics in prerequisite courses)


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Contd: Teaching Philosophy & Coding

The Foundation or Level based learning or Horizontal approach, which can be termed

as Traditional approach, takes the trainee students in a natural flow from basics and

operational level learning to managerial and strategic level skills development to

achieve required competency level. The following codes are assigned to assess the stu-

dents’ performance and to design the teaching material:

Foundation level … “F” 1, 2, 3 …

Operational level … “C” 1, 2, 3 …

Management level … “D” 1, 2, 3 …

Strategic level … “P” 1, 2, 3 …

Competence level … A, B, C

(This approach is adopted for fresh graduates / entrants who have less or no prior

knowledge in Accounting & Finance field or who have not learnt basics in prerequi-

sites courses)


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Methodology

The CPA course contents designed after specific and phenomenal reviews, the pro-

gramme philosophy and teaching approach used in this program differs from other

professional bodies with the similar curriculum. It follows the following methodology:

An extensive foundation based learning coupled with knowledge pillars to

cover the all possible dimensions of accountancy field. In this stage the

student is expected to learn the multi-dimensional boundaries of

knowledge. The student’s entry level is carefully evaluated under standard

APL and CTF procedures.

An explicit and specific strategy level under foundation based learning (and

in some part of competency level) to cover the market-required creative

problem solving skills. The knowledge base is organized through industry

research, analysis and development. In this stage the student is required

to learn industry practice, tools, techniques and alternative course of ac-

tions to use the learnt knowledge in preceding levels.

In applied stage of competency level the student is required to submit a

Publishable Article followed by a Personal Presentation / Online Inter-

view to describe new original research in Accounting & Finance industry.

At this level the student is expected to have mastered in required

knowledge areas, tools, techniques, and desired alternative course of ac-

tions in a real-life practical situation. This level introduced first time in

Public Accounting & Finance field to promote R&D and develop real-life

case-studies to teach the following learners.

A CPD/CPE (Continuous Professional Development / Continuous Profes-

sional Education) requirement to be eligible for a COP (Certificate of Prac-

tice) and to ensure the member’s learnt Knowledge, Skill and Application

competencies. Through this learning process, professional ethics aimed at

inculcating in the student an ethical approach in his/her professional in-

teractions and a sense of personal, corporate and social responsibilities.

The qualified members’ professional conduct is monitored through various

direct and indirect approaches. To maintain their current knowledge and

provide them with up-to-date and new courses/trainings, the association’s

CRC continuously working to design & conduct Seminars, Trainings, Work-

shops, and Short Courses like Forensic Accounting & Auditing & Emerg-

ing Trends in Islamic Finance.


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Programme Detail & Features


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Compatibility with other Accounting Professional Bodies

In the era of globalization, we cannot operate in isolated way so that it is necessary

that we must be familiar with the activities of our competitors and the market demand

and their expectations. Other accounting professional bodies are preparing account-

ant and we are too then what is the difference? Yes, we are offering enterprise, fi-

nance, performance, audit, taxation, laws, reporting, and investment pillars simulta-

neously and yet we are different by offering other value added courses which give us

competitive advantage. The compatibility map is drawn as follows:


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Admission Criteria & Routes


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About CPA (Old Scheme)

What we offer?

The Association offers internationally recognized certificates / courses in accountancy

and audit field. The certificates offered by the association are well reputed, extensive

skills developers and produce experts in accountancy and audit field.

Certification Types:

PAC (Public Accounting Certificate)

PAC is designed for the early birds in this field of accountancy. This certifi-

cate gives them confidence and boost their level of professionalism in this

field of accountancy and secure their future.

PPA (Professional Public Accountant)

PPA is designed for middle experts / professionals who want to polish their

level of expertise in this field of accountancy. This certificate minimizes

their route to become a CPA.

CPA (Certificate Public Accountant)

CPA is well renowned name for the professional accountant. CPA means an

expert in accounts / finance / audit / taxation / law and other business

fields. They play a vital role in any organization’s strategic success factors.

CPA is designed for the final touch professionals after PAC / PPA / experi-

ence.


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Contd: About CPA (Old Scheme)

Program Arrangement

With a focus on both domestic and global business issues, the CPA Program provides

the technical expertise today, to create the strategic business leaders of tomorrow. The

CPA Program is now more accessible to more people and offers a truly global account-

ing designation for strategic thinkers.

CPA responds strongly to employer demands by providing you with skills that deliver

value. Rather than simply providing CPAs with a technical focus, the CPA Program

equips you with an understanding of the dynamic issues facing organizations in a

global marketplace.


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Program Detail & Credit Hours


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To become a Student

To become a student-member of the association, you will have to match the following

criteria:

CPA (PAC Route)

Completed 12 years education or possess accredited equivalence.

Possess 05 years professional experience, before/during/after qualification

2. CPA (PPA Route):

Completed 14 years education or accredited equivalence

Possess 03 years professional experience, before/during/after qualification

2. CPA (Professional Route):

Completed 16 (or 14) years education or equivalent

Have two 02 years professional experience, before/during/after qualifica-

tion

Hold a professional designation (qualified or part-qualified), e.g., CA, CMA,

CPA, CCA, CIA, CGA from a recognized professional body

To become a CPA

A student who successfully completes the following is awarded the CPA® designation:

Pass the FOLLOWING levels / subjects or have claimed credit under Ac-

credited Prior Learning (APL) or Credit Transfer Facility (CTF) …

PAC Route: 3 levels / 9 subjects after passing 4 levels / 20 subjects

of PAC award

PPA Route: 2 levels / 6 subjects after passing 4 levels / 18 subjects

of PPA award

CPA Professional Route: 6 levels / 20 subjects

2. Satisfy the experience requirement, and

3. Adhere to the code of ethics and standard professional conduct.


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To become a Practicing Professional (Practicing Certificate)

After receiving the CPA designation, a member can apply for Practicing Certificate up-

on fulfillment of the following conditions:

Application on prescribed form to mention the potential working area of

professional interest,

Maintain the CPA designation in good standings,

Satisfy the 03 years CPD (Continuous Professional Development) require-

ment, and

Personal Indemnity Insurance (PII), if any, required under applied working

area.

Flexible & Distance Learning

The Association of International CPAs allows maximum flexibility to participants to

pace out and manage their studies even with their full-time professional routines.

Distance learning

Self-Study Program

Coaching classes available

Customized Reference Books

Syllabus Guides to aid self-study

Mentoring, counseling and support material available


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About Our Qualified CPAs

Our qualified Certified Public Accountants (CPA) are innovative and strategic thinkers

who are well respected for their integrity and commitment to excellence. They are ded-

icated to each client and work to satisfy their business and financial needs. Our Certi-

fied Public Accountants (CPAs) act as advisers to individuals, businesses, financial

institutions, nonprofit organizations and government agencies on a wide range of fi-

nancial matters. Today, many individuals and businesses turn to CPAs for help with

tax preparation, personal financial planning, auditing services, and advice on develop-

ing effective accounting systems.

Our qualified CPAs are no longer just number crunchers and tax preparers. They are

business and financial strategists who help chart the paths of businesses and individ-

uals. Individuals turn to their CPAs for tax and financial planning services, invest-

ment advice, estate planning, and more.

Businesses are tapping our CPAs to not only manage finances and taxes, but also to

determine profitable new product lines, help diversify investments, and provide a vari-

ety of other consulting and business services.

Our members have to fulfill the following requirements to use the CPA designation:

Complete a 14 years university degree or a duly recognized postgraduate

academic qualification

Complete the CPA Professional 150 Credit Hours’ Programme of five Learn-

ing Levels or five Knowledge Pillars, OR have completed under old-scheme

the 120+ Credit Hours of six levels study or 20 subjects PLUS article com-

pletion in final level

Complete three years of professional experience in finance, accounting or

business related field

Ensure the competency level set by the association

Comply to a strict code of ethics and professional conduct

Undergo CPD activities duly approved by the association each year


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CPA Professional Programme Syllabus

Financial Accounting

Level – One: Foundation – I Code: PF-101

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Aim

The aim of this subject is to

ensure that students

understand the role, function

and basic principles of

financial accounting and

master the rules of double-

entry bookkeeping. They also

develop the ability to prepare,

analyze and report on

financial statements for basic

reporting entities in

accordance with current

generally accepted

accounting principles (GAAP)

and International Financial

Reporting Standards (IFRSs).

To develop knowledge and

understanding of the

underlying principles and

concepts relating to financial

accounting and technical

proficiency in the use of

double-entry accounting

techniques including the

preparation of basic financial

statements for single entities

and simple groups. The syllabus

also introduces basic

techniques of interpretation of

financial statements.

Learning Objectives:

On successful completion of this subject

students should be able to:

A). Identify the users of financial accounts and

explain their requirements.

B). Discuss and explain accountancy concepts

and principles.

C). Apply the principles and procedures of

double entry bookkeeping.

D). Prepare and present financial statements for

sole traders, limited companies, partnerships

and other organizations in accordance with

current standards.

E). Discuss, explain and apply the accounting

treatment of non-current assets, current

assets, events after the reporting period and

F). Prepare a trial balance (including identifying

and correcting error

G). Prepare basic financial statements for

incorporated and unincorporated entities.

H). Prepare simple consolidated financial

statements Interpretation of financial

statements

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Section 01

Accounting Framework

Terminology, concepts, conventions.

The purpose of accounting information and its

communication.

The users of financial accounts, statements and their

requirements Nature, principles and scope of

financial accounting and its limitations.

The accounting profession and the role of the

accountant.

The ethics and independence of the accounting

profession.

The regulatory environment.

The nature, role and significance of IASs, IFRSs and

GAAP

Section 02

The scope and purpose of,

financial statements

for external reporting

Define financial reporting – recording, analyzing and

summarizing financial data

Identify and define types of business entity – sole

trader, partnership, limited liability company

Recognize the legal differences between a sole

trader, partnership and a limited liability company.

Identify the advantages and disadvantages of

operating as a limited liability company, sole trader or

partnership

Understand the nature, principles and scope of

financial reporting

Identify the users of financial statements and state

and differentiate between their information needs

Section 03

The main elements of financial

reports & Regulatory

framework

Understand and identify the purpose of each of the

main financial statements

Define and identify assets, liabilities, equity, revenue

and expenses.[

Understand the role of the regulatory system

including the roles of the IFRS Foundation (IFRSF), the

International Accounting Standards Board (IASB), the

IFRS Advisory Council (IFRS AC) and the IFRS

Interpretations Committee (IFRS IC)

Understand the role of International Financial

Reporting Standards

Explain what is meant by governance specifically in

the context of the preparation of financial statements

Describe the duties and responsibilities of directors

and other parties covering the preparation of the






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Section 04

The qualitative characteristics

of financial information

Define, understand and apply accounting concepts

and qualitative characteristics:

i) Fair presentation

ii) Going concern

iii) Accruals

iv) Consistency

v) Materiality

vi) Relevance

vii) Reliability

viii)Faithful representation

ix) Substance over form

x) Neutrality

xi) Prudence

xii) Completeness

xiii) Comparability

xiv) Understandability

xv) Business entity concept

Understand the balance between qualitative

characteristics

Section 05

Book keeping

Principles and procedures.

Original entry,

double-entry,

supporting records,

Bank accounts and reconciliation statements.

Cash accounts,

control accounts,

trial balance,

adjusting journal entries

Allocation of expenditure and income between

capital and revenue, and the treatment of reserves,

provisions, accrued expenditure and payments in

advance.

Double-entry book-keeping principles including

the maintenance of accounting records

Outline the contents and purpose of different

types of business documentation, including:

quotation, sales order, purchase order, goods

received note, goods dispatched note, invoice,

statement, credit note, debit note, remittance

advice, receipt

Understand and apply the concept of double entry





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accounting and the duality concept.

Understand and apply the accounting equation.

Understand how the accounting system contributes

to providing useful accounting information and

complies with organizational policies and deadlines

Identify the main types of business transactions e.g.

sales, purchases, payments, receipts.

Identify the main types of ledger accounts and books

of prime entry, and understand their nature and

function

Understand and illustrate the uses of journals and the

posting of journal entries into ledger accounts

Identify correct journals from given narrative

Illustrate how to balance and close a ledger

account.

Section 06

Recording transaction and

events

Sales and purchases

Cash

Inventory

Tangible non-current assets

Depreciation

Intangible non-current assets and amortization

Receivables and payables

Provisions and contingencies

Capital structure and finance costs

Understand the capital structure of a limited

liability company including:

i) Ordinary shares

ii) Preference shares (redeemable and

irredeemable)

iii) Loan notes.

Record movements in the share capital and

share premium accounts

Identify and record the other reserves which may

appear in the company statement of financial

position.

Define a bonus (capitalization) issue and its

advantages and disadvantages

Define a rights issue and its advantages and

disadvantages

Record and show the effects of a bonus

(capitalization) issue in the statement of financial

position

Record and show the effects of a rights issue in

the statement of financial position





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Record dividends in ledger accounts and the


Calculate and record finance costs in ledger

accounts and the financial statements

Identify the components of the statement of changes

in equity.

Section 07

Trial Balance

Trial balance

a) Identify the purpose of a trial balance.

b) Extract ledger balances into a trial balance.

c) Prepare extracts of an opening trial balance.

d) Identify and understand the limitations of a trial

balance.

Correction of errors

a) Identify the types of error which may occur in

bookkeeping systems.

b) Identify errors which would be highlighted by the

extraction of a trial balance.

c) Prepare journal entries to correct errors.

d) Calculate and understand the impact of errors on

the income statement, statement of comprehensive

income and statement of financial position

Control accounts and reconciliations

a) Understand the purpose of control accounts for

accounts receivable and accounts payable.

b) Understand how control accounts relate to the

double-entry system.

c) Prepare ledger control accounts from given

information.

d) Perform control account reconciliations for

accounts receivable and accounts payable.

e) Identify errors which would be highlighted by

performing control account reconciliation.

f) Identify and correct errors in control accounts and

ledger accounts.

Section 08

Bank reconciliations

Understand the purpose of bank reconciliations.

Identify the main reasons for differences between the

cash book and the bank statement.

Correct cash book errors and/or omissions.

Prepare bank reconciliation statements.

Derive bank statement and cash book balances from

given information.

Identify the bank balance to be reported in the final

accounts





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Section 09

Suspense accounts

Understand the purpose of a suspense account

Identify errors leading to the creation of a suspense

account

Record entries in a suspense account.

Make journal entries to clear a suspense account

Section 10

Basic Financial Statements

Preparation

a) Recognize how the accounting equation,

accounting treatments as stipulated within sections D,

E and examinable documents and business entity

convention underlie the statement of financial

position

b) Understand the nature of reserves.

c) Identify and report reserves in a company

statement of financial position

d) Prepare a statement of financial position or

extracts as applicable from given information using

accounting treatments as stipulated within sections D,

E and examinable documents.

e) Understand why the heading retained earnings

appears in a company statement of financial position

a) Prepare an income statement and statement of

comprehensive income or extracts as applicable

from given information using accounting treatments

as stipulated within section D, E and examinable

documents.

b) Understand how accounting concepts apply to

revenue and expenses.

c) Calculate revenue, cost of sales, gross profit, profit

for the year, and total comprehensive income from

given information

d) Disclose items of income and expenditure in the

income statement.

e) Record income tax in the income statement of a

company including the under and overprovision of

tax in the prior year.

f) Understand the interrelationship between the

statement of financial position, income statement

and statement of comprehensive income.

g) Identify items requiring separate disclosure on the

face of the income statement

a) Explain the purpose of disclosure notes

b) Draft the following disclosure notes

i) Non current assets including tangible and in

tangible assets

ii) Provisions

iii) Events after the reporting period





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iv) Inventory

Events after the reporting period

a) Define an event after the reporting period in

accordance with International Financial Reporting

Standards.

b) Classify events as adjusting or non-adjusting.[S]

c) Distinguish between how adjusting and non-

adjusting events are reported in the financial

statements

Statements of cash flows

a) Differentiate between profit and cash flow.

b) Understand the need for management to control

cash flow.

c) Recognize the benefits and drawbacks to users of

the financial statements of a statement of cash flows.

d) Classify the effect of transactions on cash flows.

e) Calculate the figures needed for the statement of

cash flows including:

i) Cash flows from operating activities

ii) Cash flows from investing activities

iii) Cash flows from financing activities

Calculate the cash flow from operating activities

using the indirect and direct method

Incomplete records

a) Understand and apply techniques used in

incomplete record situations:

i) Use of accounting equation

ii) Use of ledger accounts to calculate missing figures

iii) Use of cash and/or bank summaries

iv) Use of profit percentages to calculate missing

figures.

Section 11

Interpretation of Financial

Statements

Describe how the interpretation and analysis of

financial statements is used in a business

environment.

Explain the purpose of interpretation of ratios

Calculate key accounting ratios

i) Profitability

ii) Liquidity

iii) Efficiency

iv) Position

Explain the interrelationships between ratios[

Calculate and interpret the relationship between the

elements of the financial statements with regard to

profitability, liquidity efficient use of resources and

financial position.





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Draw valid conclusions from the information

contained within the financial statements and

present these to the appropriate user of the financial

statements.

Section 12

Preparation of Financial

Statements for different forms

of Business

Limited companies in a form suitable for publication

or internal use

A). Unlimited companies

B). Sole Traders- including incomplete record

situations.

C). Partnerships

D). Companies

Allotments, issue of shares.

Preparation of limited company accounts to

include statements of comprehensive

income and statements of financial position

in accordance with standard international

accounting practice.

Preparation of accounts in relation to:

– Clubs or Societies

– Branch Accounts

Accounting for Joint ventures: Accounting treatment

when separate books of accounts are maintained,

and when separate books are not maintained;

Memorandum recording methods.

Nature and operation of the consignment;

accounting for the completed and incomplete

consignments including losses (normal and abnormal

both) and stock valuations

Recommended Study Text

Wood F and Sangster A / Business Accounting

Vols 1 and 2 12th ed / Pearson 2012 / ISBN

0273759280

Connolly / International Financial Accounting

and Reporting 3rd ed. / CAI 2011 / ISBN

9781907214646

An Introduction to Accountancy by

.N.Maheshwari/S.K Maheshwari

Accounting. The Basis for Business Decisions by Meigs

and Meigs



Business Law


30


Aim


enable students to become

familiar with the principles and

practice of business law and

case law relating to the role

and work of an accountant.

They will also explore the

ethical standards necessary for

a career in professional

accountancy and develop

the ability to identify when the

engagement of a legal expert

is required.


skills in the understanding of

the general legal framework,

and of specific legal areas

relating to business,

recognizing the need to seek

further specialist legal advice

where necessary.




A). Explain the principles and applications of the

law of torts and the sale of goods and supply

of services legislation.

B). Identify and describe aspects of law relating

to negotiable instruments.

C). Demonstrate the application of elements of

company and partnership law in relation to

how business entities and partnerships are

formed and structured, and describe their

commercial relationships.

D). Identify the essential elements of the legal

system, including the main sources of law

E). Recognize and apply the appropriate legal

rules relating to the law of obligations

F). Explain and apply the law relating to

employment relationships

G). Distinguish between alternative forms and

constitutions of business organizations

H). Recognize and compare types of capital

and the financing of companies

I). Describe and explain how companies are

managed, administered and regulated

J). Recognize the legal implications relating to

companies in difficulty or in crisis


Business Law


31


Section 01

Elements of the legal system

The sources of law; common law and equity, judicial

precedent and case law, statute law, the

Constitution

Court structure

a) Define law and distinguish types of law.

b) Explain the structure and operation of the courts

and tribunals systems.

Explain what is meant by case law and precedent

within the context of the hierarchy of the courts.

b) Explain legislation and evaluate delegated

legislation.

c) Illustrate the rules and presumptions used by the

courts in interpreting statutes.

Identify the concept of human rights as expressed in

the Human Rights Act 1998

b) Explain the impact of human rights law on statutory

interpretation.

c) Explain the impact of human rights law on the

common law.

The legal system in operation – doctrine of separation

of powers, basic institutions of the State, the

requirements of natural and Constitutional justice,

structure of the courts, civil and criminal divisions,

solicitor/barrister relationship, functions of the

Attorney General and the Director of Public

Prosecutions, interpretation of statutes

Section 02

Law of Obligations

a) Analyze the nature of a simple contract.

b) Explain the meaning of offer and distinguish it from

invitations to treat.

c) Explain the meaning and consequence of

acceptance.

d) Explain the need for consideration.

e) Analyze the doctrine of privity.

a) Distinguish terms from mere representations.

b) Define the various contractual terms.

c) Explain the effect of exclusion clauses and

evaluate their control

Breach of contract and remedies

a) Explain the meaning and effect of breach of

contract.

b) Explain the rules relating to the award of damages.

c) Analyze the equitable remedies for breach of

contract.

a) Explain the meaning of tort.

b) Identify examples of torts including ‘passing off’

and negligence.


Business Law


32


c) Explain the duty of care and its breach.

d) Explain the meaning of causality and remoteness

of damage.

e) Discuss defences to actions in negligence

Types of tort – defamation, nuisance, negligence,

professional negligence, conversion, passing off, data

protection legislation, product liability and the

defective products legislation. Remedies

Explain and analyze the duty of care of accountants

and auditors

Section 03

Employment Law

a) Distinguish between employees and the self-

employed.

b) Explain the nature of the contract of employment

and give examples of the main duties placed on the

parties to such a contract

a) Distinguish between wrongful and unfair dismissal

including constructive dismissal.

b) Explain what is meant by redundancy.

c) Discuss the remedies available to those who have

been subject to unfair dismissal or redundancy.

Section 04

Contract

Formation of a contract –

Agreement, including offer (versus invitation to treat)

and acceptance, intention to create legal relations,

consideration, evidentiary requirements, third party

rights, including privity of contract and assignment.

Content of a contract – what is a term, distinction

between terms and mere representations, sources of

terms, the parol evidence rule, classification of terms,

exclusion clauses.

Misrepresentation, mistake, illegality, duress, undue

influence, unconscionable bargains, capacity.

Employment contracts – contract for / of services.

Rights and duties of employers and employees

Performance, discharge and remedies for breach of

contract

Section 05

Formation of Business

Organizations

a) Define the role of the agent and give examples of

such relationships paying particular regard to partners

and company directors.

b) Explain how the agency relationship is established]

c) Define the authority of the agent.

d) Explain the potential liability of both principal and

agent.[

Demonstrate a knowledge of the legislation


Business Law


33


governing the partnership, both unlimited and limited.

b) Discuss how partnerships are established.

c) Explain the authority of partners in relation to

partnership activity.

d) Analyze the liability of various partners for

partnership debts.

e) Explain the way in which partnerships can be

brought to an end and partners’ subsequent rights

and liabilities

a) Distinguish between sole traders, partnerships and

companies.

b) Explain the meaning and effect of limited liability

Analyze different types of companies, especially

private and public companies.

d) Illustrate the effect of separate personality.

e) Recognize instances where separate personality

will be ignored.

Explain the role and duties of company promoters

Explain the meaning of, and the rules relating to, pre-

incorporation contracts

Describe the procedure for registering companies,

both public and private

Describe the statutory books, records and returns that

companies must keep or make

Analyze the effect of a company’s constitutional

documents

Describe the contents of model articles of association

Explain how articles of association can be changed

Explain the controls over the names that companies

may or may not use

Section 06

Sale of Goods and Supply of

services

Defining and distinguishing sales contracts..

Credit sales, hire purchase and lease.

Terms of the contract.

The duties of the parties.

Remedies.

Product guarantees, after sales services and product

liability.

Passing of property.

Passing of risk.

Title conflicts.

Contracts for the supply of services.

Relevant legislation


Business Law


34


Section 07

Financing of Companies

Examine the different meanings of capital.

b) Explain allotment of shares and distinguish

between rights issue and bonus issue of shares.

c) Illustrate the difference between various classes of

shares.

d) Explain the procedure for altering class rights

Explain the meaning of debenture.

c) Distinguish loan capital from share capital and

explain the different rights held by shareholders and

debenture holders.

d) Explain the concept of a company charge and

distinguish between fixed and floating charges.

e) Describe the need and the procedure for

registering company charges.

Capital maintenance and dividend law

a) Explain the doctrine of capital maintenance and

capital reduction.

b) Explain the nature of treasury shares.

c) Examine the effect of issuing shares at either a

discount, or at a premium.

d) Explain the rules governing the distribution of

dividends in both private and public companies

Section 08

Management, administration

Company directors

a) Explain the role of directors in the operation of a

company.

b) Discuss the ways in which directors are appointed,

can lose their office or be subject to a disqualification

order.

c) Distinguish between types of directors, such as

executive/ non-executive directors or de jure and de

facto directors.

d) Distinguish between the powers of the board of

directors, the managing director/chief executive and

individual directors to bind their company.

e) Explain the duties that directors owe to their

companies.

Discuss the appointment procedure relating to, and

the duties and powers of, a company secretary.

Discuss the appointment procedure relating to, and

the duties, powers and rights of company auditors

and their subsequent removal or resignation

Distinguish between types of meetings: ordinary

general meetings and annual general meetings.


Business Law


35


b) Explain the procedure for calling such meetings.

c) Detail the procedure for conducting company

meetings.

d) Distinguish between types of resolutions: ordinary,

special, and written.

Section 09

Legal implications to

companies

Explain the meaning of and procedure involved in

voluntary liquidation.

Explain the meaning of, the grounds for, and the

procedure involved in compulsory liquidation.

Explain the order in which company debts will be

paid off.

Explain administration as a general alternative to

winding up.

Explain in particular the way in which administrators

may be appointed, the effects of such

appointment, and the powers and duties of

administrators

Section 10

Negotiable Instruments

Negotiable Instruments.

Bills of Exchange.

Cheques

Promissory Notes

Bank Drafts

Section 11

Governance and Ethical Issues

Explain the idea of corporate governance.

Recognize and explain the extra-legal codes of

corporate governance.

Identify and explain the legal regulation of corporate

governance.

Recognize the nature and legal control over insider

dealing and market abuse.

Recognize the nature and legal control over money

laundering.

Recognize the nature and legal control over bribery.

Discuss potential criminal activity in the operation,

management and winding up of companies.

Distinguish between fraudulent and wrongful trading.


Business Law


36



Keenan / Essentials of Irish Business Law 6th

edition 2012 / Gill and Macmillan / ISBN

9780717152612.

Byrne & McCutcheon / Irish Legal System, 5th

edition / Tottel / ISBN/ISSN 1845922786.

Keane / Company Law, 4th edition / Tottel,

ISBN 1845922980.


Economics & Business Environment


37


Aim


introduce students to the

nature and scope of

economics and related

business planning, with a focus

on the practical application of

theoretical concepts. Students

will examine how national and

international factors impact

upon wealth creation and

business development.

The key objectives of

economic policy will be

considered, while the uses of

analytical techniques and

mathematical approaches for

business planning will also be

explored


ensure that students have a

solid foundation in economics

contributing to the

development of a competent

and well-rounded\ member of

the profession. This subject

embraces knowledge of the

sources, interpretations and

limitations of

economic/business statistics


On successful completion of this subject,


A). Demonstrate a knowledge and

understanding of micro and macro

economic theory and related applications.

B). Compare different market structures and

circumstances, and describe the main

features and implications of each.

C). Identify the external factors, issues and

agencies which influence and help

determine the outcome of economic and

business policies.

D). Explain how marketing and sales activities

contribute to the attainment of strategic

organizational objectives.

E). Illustrate how analytical techniques and

mathematical approaches may be used in

economic policy and business decision

making.

F). Present, interpret and explain economic and

business data.




38


Section 01

Basic Concepts of Economics

The Fundamentals of Economics & Economic

Organizations

Utility, Wealth, Production, Capital

Central Problems of an Economy

Production Possibility Curve ( or Transformation Curve)

Equilibrium

Theory of Production ( meaning , factors, laws of

production- law of variable proportion, laws of returns

to scale)

Cost of Production ( concept of costs, short-run and

long-run costs, average and marginal costs, total,

fixed

Theory of Demand ( meaning, determinants of

demand, law of demand, elasticity of demand-

price, income and cross elasticity) and Supply (

meaning , determinants, law of supply and elasticity

of supply)

Section 02

Nature and Scope of

Economics

Development of economic theory and practice.

Economic principles and concepts.

Language of economics.

Supply, demand and price determination.

Market systems and the allocation of scarce

resources.

Market structures, including – Perfect Competition,

Imperfect Competition, Oligopoly, Monopoly.

Elasticity’s of supply and demand.

Concept of equilibrium.

Long-run and short-run cost factors.

Economies and diseconomies of scale

Pricing strategies in various markets




39


Section 03

Macroeconomic Theory and

Practice

The macroeconomic environment.

Government policies, objectives and instruments

National Income Accounting.

Determination of GDP and GNP.

National income multiplier and the accelerator

Unemployment, inflation, recession and growth.

Keynesian theory and subsequent developments.

Aggregate demand and the circular flow of income.

Fiscal and monetary policies and practices. Servicing

the national debt.

Monetary systems and currencies.

Exchange rates, interest rates, credit control and

availability. The role of Central Banks, the World Bank,

IMF and other agencies.

International trade and comparative advantage.

Balance of trade and balance of payments

UK economic institutions and policies.

Economic growth and welfare.

Current macroeconomic issues

Section 04

The Firm in the Marketplace

The concept of profit maximization-

The conditions for long-run profit maximization-

The conditions for short-run profit maximization-

An understanding of the various forms of market

structures –

Perfect Competition, Monopolistic (Imperfect)

Competition and Monopoly-

Long-run price/output determination for each of the

above forms of market structure-

Economic efficiency in respect of each of these forms

of market structure

Section 05

Growth Strategies of Firms

Horizontal growth

Vertical growth

Diversified growth

Growth by merger

Alternative theories of the firm-Principal

agent theory




40


Section 06

National Income

Gross National Product

Net National Product

Measurement of National Income

Economic growth and fluctuations

Consumptions,

Savings and Investment

Section 07

Business Planning and Analysis

The growth and development of the organisation.

National and international business environments

Strategic and tactical planning.

Sources of finance for business development

Decision making, profit maximization and other

considerations.

Goal and target setting

Marketing and sales concepts, roles and functions

Market planning and analysis,

Influences on consumer behaviour.

The marketing mix

Services marketing

Environmental, cultural and technological factors in

marketing and sales

Quantitative and qualitative research

Sales techniques and influences

Ethical behaviour in marketing and selling.

Analytical techniques

Moving averages and regression analysis

Measures of central tendency and dispersion.

Mean, median, mode, and standard deviation.

Probability, sampling, statistical inference and

hypothesis testing.

Graphical and pictorial presentation of economic

and related data. The compilation, interpretation and

use of bar charts, histograms, pie charts, frequency

distributions, graphs and tables.




41


Section 08

Government and the Macro

economy

Objectives of national economic policy

Interaction of objectives-Policy instruments

Economic cycles

Budget strategies

Fiscal stabilisers

Economic implications of direct and indirect forms of

taxation

Section 08

Global Economics

Law of comparative advantage-

Terms of trade-

Restrictions to free international trade-

Fixed versus floating exchange rates-

Balance of payments-

The global market environment-

Economic benefits to a firm from a global strategy


Turley, Moloney and O’Toole / Principles of

Economics /(Gill & Macmillan 4th ed. 2011 /

ISBN: 9780717149889.

Francis / Business Mathematics and Statistics /

Cengage 6th ed. Revised/ ISBN

9781844801282.

Brassington and Pettitt / Essentials of

Marketing / Pearson / 3rd ed. 2012 / ISBN13:

9780273727644 / ISBN10: 0273727648.


Business Mathematics & Statistics


42


Aim

To provide the students with

the basic knowledge of

mathematics and statistics to

enable them to:

Use and interpret

mathematical and statistical

methods, and present the

results of quantitative nature, in

a suitable form for taking

business decisions.


On completion of this course, students should

be able to:

A). describe and demonstrate the use of

mathematical and statistical techniques,

B). understand the proper use of formulae and

ratios,

C). describe reasonableness in the

computation of answer,

D). understand and apply techniques for

summarizing and analyzing data,

E). describe and demonstrate the use of

probability, in case of involvement of risk

and uncertainty,

F). describe and apply financial mathematical

techniques, and

G). describe and demonstrate forecasting

techniques.




43


Section 01

Preliminaries

Factorization

Equations

Inequalities,

Absolute Value Relationship

,Quadratic Equation and Nature of Roots

Mid-Points,

Two Point Formula

Distance Formula,

Rectangular Coordinate System

Section 02

Mathematical Functions

Functions,

Domain Range Relationship,

Restricted Domain and Range,

Value of the Function,

Graph Representation of the Functions,

Type of Functions (Constant, Linear, Rational,

Combinations, Composite, Polynomial, etc.),

Applications of the Linear Functions, Break-Even

Models

Section 03

Differentiation

The Limit and Introduction

Average rate of change

Concepts of derivative and differentiation

Basic Rules of Differentiation

Instantaneous-rate of change

Partial Derivatives and Mixed Partial Derivatives

Section 04

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




44


solution

alternative optimum solution,

unbounded solutions and redundant constraints

Section 05

Mathematics of Finance

Simple interest

present and future values

discounting notes; bank discount

Compound interest and annuities

sinking funds, present value

perpetuities

effective rate of interest

Section 06

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

Section 07

Regression Analysis

Scatter graphs,.

Simple Linear Regression

least squares method

Co-efficient of determination

correlation co-efficient

rank correlation,

Use of linear regression equation in forecasting

Section 08

Probability

Meaning of probability

nature of probability distributions

discrete and continuous variables

expected values

Standard Normal Distribution




45


confidence intervals, z-score and associated

diagrams

Use and application of probability distributions

Section 09

Sampling and Decision Making

Sampling Methods

Simple random, stratified, cluster

systematic sampling, Interval estimation for large and

small samples

confidence levels, standard error

estimate of sample size

Hypothesis testing

Null and Alternative hypothesis; description of Type I

and Type II errors

Section 10

Decision-Making

Probability Sampling

Sampling Distribution of Mean),

Estimation (Confident Innerves) for single

population mean,

Test of hypothesis (t & z test) for single population

mean,

Chi-Squire Test,

Concept of Sample Size

Hypothesis testing

Null and Alternative hypothesis; description of Type I

and Type II errors

Section 11

Statistical Forecasting

Linear Correlation Coefficient

Coefficient of Determination

Linear regression model

Least square methods, semi-average, moving

average,

Index Number (Simple and Weighted).




46


Section 12

Network Analysis

Critical Path Analysis (CPM)

Gantt Charts

Analysis of network

crashing program evaluation and network analysis

activity-on-arrow and activity-on mode diagrams,

probabilities network

Section 13

Linear Programming

Optimization by linear programming using

graphical and simplex methods

Sensitivity Analysis.

Linear and non-Linear Optimisation


Quantitative Methods for Business Decisions by

Curwin and Slater

Applied Mathematics for Business By Frank S. Budnik

Quantitative Techniques by T lucy


Income Tax

Level – II: Foundation – II Code: FP-201

47


Aim


skills relating to the tax system

as applicable to individuals,

single companies, and groups

of companies


On successful completion of this paper candidates

should be able to:

A). Explain the operation and scope of the tax

system

B). Explain and compute the income tax

liabilities of individuals

C). Explain and compute the corporation tax

liabilities of individual companies and groups

of companies

D). Explain and compute the chargeable gains

arising on companies and individuals

E). Explain and compute the inheritance tax

liabilities of individuals

F). Explain and compute the effect of national

insurance contributions on employees,

employers and the self employed

G). Explain and compute the effects of value

added tax on incorporated and

unincorporated businesses

H). Identify and explain the obligations of tax

payers and/or their agents and the

implications of non-compliance


Income Tax


48


Section 01

Purpose and administration of

Taxation

Tax legislation.

Tax administration

Direct and Indirect taxation.

Registration and collection, of various taxes,

assessments and appeals

Residence and Domicile

The role of the accountant: position as tax agent

including rights to attend appeal hearings; duties to

the client, the profession and the State.

Section 02

Tax System

The overall function and purpose of taxation

in a modern economy

Describe the purpose (economic, social etc) of

taxation in a modern economy

Identify the different types of capital and

revenue tax

Explain the difference between direct and

indirect taxation

Principal sources of revenue law and practice

Describe the overall structure of the UK tax

system

State the different sources of revenue law

Appreciate the interaction of the UK tax system

with that of other tax jurisdictions

Explain the difference between tax avoidance

and tax evasion

Explain the need for an ethical and professional

Approach

Section 03

The scope of Income Tax

Charge to income tax, Residence and Domicile

• Taxation of individuals and partnerships.

• System of Self Assessment.

• Tax bands, tax credits and relief.

• Tax treatment of single, widowed, married,

separated and divorced persons

Income from employment

Recognize the factors that determine

whether an engagement is treated as

employment or self-employment

Recognize the basis of assessment for

employment income

Compute the income assessable


Income Tax


49


Recognize the allowable deductions,

including travelling expenses

Discuss the use of the statutory approved

mileage allowances.

Explain the PAYE system

Identify P11D employees.

Compute the amount of benefits assessable.

Explain the purpose of a dispensation from

HM

Revenue & Customs

Explain how charitable giving can be made

through a payroll deduction scheme

Income from self-employment

Recognize the basis of assessment for self-

employment income

Describe and apply the badges of trade

Recognize the expenditure that is allowable in

calculating the tax-adjusted trading profit

Recognize the relief that can be obtained for

pre-trading expenditure

Compute the assessable profits on commencement

and on cessation

Change of accounting date

Recognize the factors that will influence the

choice of accounting date

State the conditions that must be met for a

change of accounting date to be valid

Compute the assessable profits on a change of

accounting date.

Retirement annuity contracts including PRSAs and

AVCs

High income earner restriction

Define plant and machinery for capital allowances

purposes

Compute writing down allowances, first year

allowances and the annual investment allowance

Compute capital allowances for motor cars

Compute balancing allowances and balancing

charges

Recognize the treatment of short life assets

Explain the treatment of assets included in the special

rate pool

Understand how trading losses can be carried

forward

Explain how trading losses can be carried forward

following the incorporation of a business

Understand how trading losses can be claimed


Income Tax


50


Section 05

The comprehensive

computation of taxable

income and income tax

liability

Prepare a basic income tax computation involving

different types of income

Calculate the amount of personal allowance

available generally, and for people aged 65 and

above.

Compute the amount of income tax payable

Explain the treatment of interest paid for a qualifying

purpose

Gift and donations

Property owned jointly by a married couple, or by a

couple in a civil partnership

against total income and chargeable gains

Explain and compute the relief for trading losses in

the early years of a trade

Explain and compute terminal loss relief

Partnerships and limited liability partnerships

Explain how a partnership is assessed to tax.

Compute the assessable profits for each partner

following a change in the profit sharing ratio

Compute the assessable profits for each partner

following a change in the membership of the

partnership

Describe the alternative loss relief claims that are

available to partners

Explain the loss relief restriction that applies to the

partners of a limited liability partnership.

Section 04

Property and Investment

Income

Compute property business profits

Explain the treatment of furnished holiday lettings

Describe rent-a-room relief

Compute the amount assessable when a premium is

received for the grant of a short lease

Understand how relief for a property business

loss is given

Compute the tax payable on savings income

Compute the tax payable on dividend income

Explain the treatment of individual savings accounts

(ISAs) and other tax exempt investments


Income Tax


51


Section 06

Corporate Taxation

Basic principles and administration.

Computations including capital allowances, capital

gains, treatment of distributions

Losses excluding terminal loss relief

‘period of account’,

‘accounting period’, and ‘financial year

Recognize when an accounting period starts and

when an accounting period finishes

how the residence of a company is determined

Recognize the expenditure that is allowable

in calculating the tax-adjusted trading profit

Explain how relief can be obtained for

pretrading

expenditure

Compute capital allowances

Compute property business profits

Explain the treatment of interest paid and

received under the loan relationship rules

Explain the treatment of qualifying charitable

donations

Understand how trading losses can be

carried forward

Understand how trading losses can be

claimed against income of the current or

previous accounting periods.

taxable total profits

Compute the corporation tax liability and apply

marginal relief

Explain the implications of receiving franked

investment income

Define an associated company and recognize the

effect of being an associated company for

corporation tax purposes

Define a 75% group, and recognize the reliefs that are

available to members of such a group

Define a 75% capital gains group, and recognize the

reliefs that are available to members of such a group

Compare the UK tax treatment of an overseas

branch to an overseas subsidiary

Calculate double taxation relief

Explain the election for the exemption of profits

from overseas branches

Explain the basic principles of the transfer pricing rule


Income Tax


52


Section 07

The scope of the taxation of

capital gains

Principles and scope.

Basis of Assessment.

Exemptions and reliefs to include; PPR, Transfer of

business to company, retirement.

Chattels and marginal relief.

Basic computations of gains and losses, including

indexation

Share transactions to include bonus and rights issues

Part disposals--Development land – gains, losses,

Indexation

Gains and losses on the disposal of movable and

immovable property

The computation of capital gains tax payable by

Individuals

Explain and apply entrepreneurs’ relief as it

applies to individuals.

Explain and apply rollover relief as it applies

to individuals and companies

Explain and apply holdover relief for the gift

of

business assets

Explain and apply the incorporation relief

that is available upon the transfer of a

business to a company

Section 07

Inheritance Tax

Describe the scope of inheritance tax

Identify and explain the persons chargeable.

State, explain and apply the meaning of transfer of

value, chargeable transfer and potentially exempt

transfer

Demonstrate the diminution in value principle.

Demonstrate the seven year accumulation principle

taking into account changes in the level of the nil

rate band

The liabilities arising on chargeable lifetime transfers

and on the death of an individual.

The use of exemptions in deferring and minimizing

inheritance tax liabilities

Payment of inheritance tax


Income Tax


53


Section 08

VAT & Double Taxation

Legislative requirements and procedures.

Cash and invoice basis.

Two-thirds and package rule.

Zero and exempt.

Non-deductible inputs.

intra community trade

Imports and exports

A basic knowledge is required insofar as it relates to

an individual’s Investment income, with particular

emphasis on the Irish/UK Tax Treaty


Management Accounting By W. Seal, R. H. Garrison

& E. W. Noreen

Management and Cost Accounting By C. Dury

Management and Costing Accounting By C. T.

Horngren / A. Bhimani, S. M. Datar & G.

Foster


Cost & Management Accounting


54


Aim

The aim of this subject is to ensure

that students develop a

knowledge and understanding of

the various cost accounting

principles, concepts and

techniques appropriate for

planning, decision-making and

control and the ability to apply

these techniques in the

generation of management

accounting reports




A). Explain the relative strengths and weaknesses

of alternative cost accumulation methods

and discuss the value of management

accounting information.

B). Calculate unit costs, applying overhead

using both absorption costing and activity

based costing principles.

C). Apportion and allocate costs to units of

production in job, batch and process costing

systems, for the purpose of stock valuation

and profit measurement.

D). Identify and explain cost behaviour patterns

and apply cost-volume profit analysis.

E). Define and use relevant costs in a range of

decision-making situations.

F). Prepare and present budgets for planning,

control and decision making.

G). Compute, interpret and investigate

variances.

H). Demonstrate communication skills, including

the ability to present quantitative and

qualitative information, together with

analysis, argument and commentary, in a

form appropriate to the intended audience.

I). Compare actual costs with standard costs

and analyse any variances

J). Explain and apply performance

measurements and monitor business

performance.




55


Section 01

Introduction to Cost

Accounting

Objectives and scope of cost accounting

Cost centres and cost units

Cost classification for stock valuation, profit

measurement, decision making and control

Coding systems

Elements of cost

Cost behaviour pattern, separating the components

of semi-variable costs

Installation of a costing system

Relationship of cost accounting, financial

accounting, management accounting and financial

management

Section 02

Management Accounting

Describe the purpose and role of cost and

management accounting within an organisation

Compare and contrast financial accounting with

cost and management accounting`

Outline the managerial processes of planning,

decision making and control.

Explain the difference between strategic, tactical

and operational planning

Distinguish between data and information

Identify and explain the attributes of good

information

Explain the limitations of management information in

providing guidance for managerial decision-making.

The nature and scope of management accounting,

the relationship between management accounting

and financial accounting

Cost classifications

The role of the Management Accountant in a

modern business environment, including the

recognition of possible ethical issues that may arise




56


Section 03

Cost Accumulation Systems

Accounting for materials

Stock valuation approaches (FIFO, LIFO and AVCO)

EOQ and JIT concepts,

Accounting for labour: remuneration methods,

incentive schemes, productivity, labour turnover and

labour performance

Section 04

Costing

Material Costing

Preparation of Income Statement,

Preparation of Cost of Goods Sold Statement

Cost Control Methods

Describe the different procedures and documents

necessary for the ordering, receiving and issuing of

materials from inventory

Describe the control procedures used to monitor

physical and ‘book’ inventory and to minimize

discrepancies and losses

Interpret the entries and balances in the material

inventory account

Identify, explain and calculate the costs of ordering

and holding inventory (including buffer inventory)

Calculate and interpret optimal reorder quantities

Calculate and interpret optimal reorder quantities

when discounts apply

Produce calculations to minimize inventory costs

when inventory is gradually replenished

Describe and apply appropriate methods for

establishing reorder levels where demand in the lead

time is constant

Calculate the value of closing inventory and material

issues using LIFO, FIFO and average methods

Labour Costing

Direct and indirect labour

Productivity and efficiency

Remuneration methods

Straight piece rate and differential piece rate,

Incentive wage plan

Group bonus

Time sheet and job cards

Overtime and idle time, Payroll

Labour turnover rate.

FOH Costing

Classification and collection of overhead

Predetermined overhead applied rate

Factory overhead cost: planned, applied and actual,




57


over and under applied factory overhead and its

disposal,

Departmentalization of overhead, Allocation,

apportionment and reapportionment of overhead

costs

Repeated distribution and algebraic method for

reciprocal

Service department costs.

Section 05

Cost Classification

Explain and illustrate production and

nonproduction costs.

Describe the different elements of non production costs- administrative, selling, distribution and finance

Describe the different elements of production cost- materials, labour and overheads

Explain the importance of the distinction between production and non production costs when valuing output and inventories

Explain and illustrate with examples classifications used in the analysis of the product/service costs including by function, direct and indirect. fixed and variable, stepped fixed and semi variable costs

Explain and illustrate the use of codes in categorizing transaction

Describe and illustrate, graphically, different types of cost behaviour

Use high/low analysis to separate the fixed and variable elements of total costs including situations involving semi variable and stepped fixed costs and changes in the variable cost per unit

Explain the structure of linear functions and equations

Explain and illustrate the concept of cost objects, cost units and cost centres

Distinguish between cost, profit, investment and revenue centres

Describe the differing needs for information of cost, profit, investment and revenue centre managers




58


Section 06

Standard costing

Basic concept of standard costing

Preparation of standard cost,

types of production capacities,

Material price and usage variances,

Labour rate and efficiency variances,

Variable overhead expenditure and efficiency

variances

Fixed overhead budget and volume variances

Section 07

Break Even Analysis and

Marginal Costing

Marginal cost and contribution margin,

Contribution margin to sales ratio,

Break-even in units and value

Margin of safety ratio

Breakeven graph

Section 08

Cost Behaviour

Fixed, variable, semi variable and step fixed cost,

Linear, curvilinear and step functions, relevant range,.

Factors influencing cost behaviour.

Methods of segregation of cost into fixed and

variable, high low method, scatter graph method,

regression analysis and correlation,

Learning curve and cost function

Section 09

Cost Volume Profit Analysis

Break-even analysis, Break-even graph and profit

graph,

Multi-product CVP analysis

Operational leverage, the economist’s and

accountant’s CVP model

Assumptions of CVP analysis

Effect of changes in cost and revenue

Section 10

Information for Planning and

Control

The role of budgeting, including alternative

budgeting systems,

Behavioural and motivational issues in the budgetary

process,

Functional and subsidiary, Standard costing,

role and procedures for standard setting including

different types of Standards




59


Variance analysis: the calculation and interpretation

of basic sales/cost variances, Reconciliation reports,

The inter-relationship and possible causes of

variances, (fixed overhead capacity and efficiency

variances are not examinable.)

Section 11

Pricing Decisions

Economic theory of pricing

Optimal sales price using differential calculus

Difficulties with applying economic theory

Cost based or cost plus pricing

Pricing policies, Pricing for target rate of return

Pricing strategies for new products: skimming and

penetration pricing

Section 12

Information for Decision

Making

Cost behaviour patterns and identification of

fixed/variable elements in a cost using High/Low

method,

scatter-graphs and regression analysis,

Break-even analysis and the importance of

contribution,

Break-even chart preparation and interpretation,

Calculation of break-even point,

margin of safety and target profit

Limitations of Cost-Volume Profit Analysis,

Relevant costing principles, including committed,

sunk and opportunity costs, Relevant costs in decision

making,

Decision making with a single limiting

factor/constraint, Qualitative factors relevant to

specific

Section 13

ABC Costing, JIT & TQM

Activity based costing for control and decision

making purposes

Basic concepts and application of TQM and JIT




60


Section 14

Management Control System

Responsibility accounting;

Decentralized divisional control;

transfer prices;

residual income and ROI as tools of control;

centralized control and budgetary systems;

evaluation of performance;

performance budgeting

Reporting on performance at different levels

Section 15

Absorption & Marginal Costing

Explain the importance of, and apply, the

concept of contribution

Demonstrate and discuss the effect of

absorption and marginal costing on inventory

valuation and profit determination

Calculate profit or loss under absorption and

marginal costing

Reconcile the profits or losses calculated

under absorption and marginal costing

Describe the advantages and disadvantages

of absorption and marginal costing


Management Accounting By W. Seal, R. H. Garrison

& E. W. Noreen

Management and Cost Accounting By C. Dury

Management and Costing Accounting By C. T.

Horngren / A. Bhimani, S. M. Datar & G.

Foster

Drury, C., Cost and Management Accounting –

An Introduction, 7th ed. / Cengage 2011 /

ISBN: 97814032138


Business Communication & Report Writing


61


Aim

This course is designed to

introduce students to the key

concepts of business

communication and their

application. The course is

designed to provide the

students with theoretical and

practical knowledge of verbal

and non-verbal presentation

and communication skills.


On the completion of this course, the students will be

able to:

A). Understand and communicate in

professional manner

B). Read comprehension and make judgment

C). Draft letters and use official communication

tools

D). Write and present reports

E). Listening and speaking skills will be polished

F). Attend and present effective meeting

professional

Section 01

Vocabulary

Phrases,

Synonyms, Antonyms

Idioms, Frequently Confused Words, Frequently

misused Words,

Common Vocabulary, and One Word Substitute`

Articles a, an and the

Section 02

Grammar and Usage

Parts of Speech,

Basic Grammar,

Sentences and Structures

sentence based on function and structure,

Active and Passive Voice, Direct and Indirect

Speech,

Use of Punctuation, Phrases, Idioms

Section 03

Composition and

Comprehension

Letter writing,

Précis writing,

Essay writing,

Comprehension




62


Section 04

Business Communication

Effective communication in business

definition, characteristics, process, forms, channels

and importance, different kinds of communication; its

features, elements, concepts;

verbal and non-verbal communication; process of

preparing effective business messages;

Planning steps; basic organizational plans; beginnings

and endings communication principles;

Styles of communication; 7C’ s of communication,

Gestures; manners; presentations and follow-up or

feedback

Interviewing skills, listening skills,

organizing and conducting meetings, business group

discussions,

communication within and outside the organization,

structure of the organization

open communication climate, communication

barriers,

interpersonal communication, intercultural

communication, ethical communication,

legal aspects of communication, and the role of

technology in communication

Business Terminologies

Bull, Bearish, and other similar terminologies of

Business Field

Section 05

Business Letters

Informal letters;

business or formal letters

; direct request inquiries claims and requests for

adjustments; requests regarding routine business or

public causes; invitations;

preparing proposals/feasibilities, documentation,

orders; reservations;

favorable replies; unsolicited favorable messages;

request;

sales letters; evaluating, achievements;

market research; making preliminary career

decisions; resume and job application letter




63


Section 06

Memo Writing & Short Report

Writing

Memorandum writing,

Importance of memo,

Short Memorandum used in Offices,

Memorandum Legal or not

Reports,

Types of Reports,

Importance of report Writing

Short Report Writing,

Why reports are written

Section 07

Presentation skills

Common myths about presentational ability;

difference between speech and presentation;

categories presentations according to their purpose;

analysis of the audience before making a

presentation;

evaluating the appropriateness of the setting and

venue of presentation;

the steps in planning a presentation;

some common symptoms of stage fright and

measures to overcome it; developing an introduction,

a body and a close for a formal presentation; some

do’s and don’ts of verbal and non-verbal

communication;,

selecting, designing and using appropriate visual

aids; handling audience questions effectively;

delivering a short formal presentation on an assigned

topic, interviews, meetings


Effective Business Communication by Herta A. Murphy

Excellence in Business Communication by Join V Thill

Courtland L Bove.s

Model Business Letters by L. Gartside


Audit and Assurance


64


Aim

The aim of this subject is

To introduce students to the

concepts and principles of the

audit process and to develop their

understanding of its application in

the context of the legal,

regulatory and ethical framework

of the profession.

To provide students with a deeper

understanding of audit and

assurance services within a wide

variety of contexts

To apply their knowledge of

professional practice to resolve

compliance and audit issues

occurring in businesses.


On successful completion of this subject, students

should be able to:

A). Interpret and discuss the legal, regulatory

and ethical framework within which the

auditor operates.

B). Differentiate and explain the respective

responsibilities of directors and auditors.

C). Explain the nature, purpose and scope of an

audit and discuss and defend the role of the

auditor.

D). Apply and explain the process relating to the

acceptance and retention of professional

appointments, to include the purpose and

content of engagement letters.

E). Devise an overall audit strategy and develop

an audit plan.

F). Supervise and review the various stages of

the audit process.

G). Outline the nature of internal controls and

the procedures required to evaluate control

risk relating to specific accounting systems, in

order to identify internal controls and

weakness within the systems.

H). Distinguish between Tests of Control and

Substantive Procedures.

I). Design and apply the appropriate audit tests

to include in the audit programme.

J). Carry out analytical procedures and assess

the implications of the outcome


Audit and Assurance


65


Section 01

The Auditor and The Audit

Environment

The Statutory Audit: need, objective, focus, nature

and structure

Public interest, expectations, interrelationships

between auditor, directors (management) and

shareholders and other users of financial statements,

including their respective roles and the auditor’s

duties to these parties.

International Standards on Auditing (ISAs): nature,

formulation, issuance and compliance enforcement.

The audit implications of International Accounting

Standards (IFRS/IAS): understanding and basis for

application.

Directors’ responsibilities versus auditor’s

responsibilities for financial statements and internal

controls

Corporate governance

Distinction between external and internal audit

Section 02

Auditors Legal, Ethical and

Professional Responsibilities

Professional ethical responsibilities:

– CPA Code of Ethics.

– IFAC Code of Ethics.

Statutory responsibilities and rights

Key responsibilities derived from International

Standards on Auditing (ISAs).

Auditor’s responsibility in relation to fraud and for the

entity’s compliance with laws and regulations.

Auditor’s responsibilities defined by case law arising

from alleged negligence (financial statements

misstated) and related exposure and consequences

Pre-appointment procedures: client assessment

(including management integrity) and completion of

engagement letter.

Section 03

Audit Framework and

Regulation

Concept of audit and other assurance engagements

Objective and general principles of external audit

engagements.

Nature and Development of audit and other

assurance engagements.

Concepts of accountability, stewardship and agency


Audit and Assurance


66


Section 04

Audit Planning and Supervision

Materiality: nature (quantitative and qualitative),

determination, impact and use throughout different

phases of the audit

Audit risk and its components (inherent, control and

detection risks): interrelationships, evolutions audit

progresses and impact on nature, timing and extent

of audit work.

Audit strategies (risk-based auditing, tests of control,

substantive procedures, combined procedures, audit

around and through computerized systems) and their

impact on the conduct of the audit.

Knowledge of the entity and its environment:

business, risks, management, and accounting system

Nature, extent and timing of audit procedures in

response to assessed risks of material misstatement,

sufficient and appropriate audit evidence, types of

audit evidence, general audit techniques (enquiry,

observation, inspection, analysis, computation,

confirmation).

Audit planning memo, audit programmes and

working papers

Audit supervision and review

Section 05

The modern audit process

• Process of planning

• Understanding the entity

• Business risk model

• Audit risk model

• Creative accounting

• Analytical procedures

• Materiality

• Responding to assessed risks

Other audit methodologies

Section 06

Audit Execution

Entity’s control environment and control procedures,

objectives, limitations, attributes

Auditor’s and management respective

responsibilities.

Internal control descriptions (flowcharts, narrative

descriptions, walkthroughs) and internal control

assessments (ICEs/ICEQs).

Broad approach to internal controls, components of

internal controls, limitations of internal control


Audit and Assurance


67


Assessing the Risk of Material Misstatement, Internal

Controls assessment and Tests of Control for the

following major systems: sales, purchases, payroll,

cash receipts and disbursements, inventory.

Audit Programmes for Tests of Control

Final Assessment of Control Risk: Management letter

reporting and assessment of impact on audit

strategy.

Section 07

Audit evidence

Risk and assertions

Sufficient appropriate audit evidence

Sources of audit confidence

Audit procedures

Analytical procedures

Provisions and contingencies

Audit of accounting estimates

Related parties

Management representations

Opening balances

Service organizations

Section 08

Performing Audit

Application of specific substantive

procedures to test the following

categories of assertions:

– Assertions relating to classes of

transactions and events;

– Assertions relating to account

balances;

– Assertions relating to presentation and disclosure.

Audit of statements of financial

position, validation procedures,

applied in audit of:

– Tangible fixed assets.

– Inventory.

– Accounts receivable, prepayments & sundry

debtors.

– Investments and market securities.


Audit and Assurance


68


– Bank and cash balances.

– Accounts Payable, accruals & sundry creditors,

provisions for liabilities.

– Debenture loans and bank borrowings.

– Capital and Reserves, Equity

Audit of statements of comprehensive Income

account , validation procedures, applied in audit of:

– Revenues and expenses.

– Sales/purchases.

– Wages and salaries.

– Other statement of comprehensive income

account items.

Misstatements / aggregation /assessment / impact on

audit reporting

Sampling methods: decision to use, judgmental versus

statistical (MUS) sampling methods for controls and

financial statement items, sample selection and

assessment.

Analytical review: nature and use (financial

statements/data) throughout audit.

Going concern -Subsequent events

Accounting estimates.

Commitments and contingencies.

Management representation letters.

Use of experts.

Section 09

Audit Reporting

Reporting on Audited Financial

Key concepts: opinion, true and fair view, materiality,

statutory requirements.

Basic elements of the Auditor’s Report..

Modified Reports, differentiating between

– Matters that do not affect the auditor’s opinion,

and

– Matters that do affect the auditor’s opinion.

Circumstances giving rise to Modified Reports:

– Limitations on Scope

– Disagreements with management.

Auditor’s responsibility before and after the date of

the Auditor’s Report.

Audit of accounting estimates


Audit and Assurance


69


Section 10

Internal Audit

Factors to be taken into account when assessing the

need for internal audit.

Elements of best practice in the structure and

operations of internal audit with reference to

appropriate international codes of corporate

governance.

Differences between external and internal audit

Role of external and internal audit regarding audit

planning and the collection of audit evidence..

Scope of the internal audit function

Scope of internal audit and the limitations of the

internal audit function.

Types of audit report provided in internal audit

assignments.

Responsibilities of internal and external auditors for

the prevention and detection of fraud and error.

Outsourcing the internal audit department

Advantages and disadvantages of outsourcing

internal audit.

Nature and purpose of internal audit assignments

including value for money, IT, best value and

financial.

Nature and purpose of operational internal audit

assignments including procurement, marketing,

treasury and human resources management

Section 11

Planning and Risk Assessment

Need to plan and perform audits with an attitude of

professional skepticism.

Engagement risks affecting the audit of an entity.

Components of audit risk.

Risk based, procedural and other approaches to

audit work.

Importance of risk analysis. Information technology in

risk analysis

Auditors obtain an initial understanding of the entity

and knowledge of its business environment

Concepts of materiality and tolerable error.

Indicative materiality levels from financial information.

Effect of fraud and misstatements on the audit

strategy and extent of audit work

Nature and purpose of analytical procedures in

planning.

Key ratios used in analytical procedures.

Need for planning an audit.

Contents of the overall audit strategy and audit plan.


Audit and Assurance


70


Describe the relationship between the overall audit

strategy and the audit plan.

Develop and document an audit plan.

Difference between interim and final audit.

Need for and the importance of audit

documentation.

Working papers and supporting documentation.

Procedures to ensure safe custody and retention of

working papers.

Extent to which auditors are able to rely on the work

of experts.

Extent to which external auditors are able to rely on

the work of internal audit.

Audit considerations relating to entities using service

organizations.

Why auditors rely on the work of others.

Extent to which reference to the work of others can

be made in audit reports.

Section 12

Internal Control

Explain why an auditor needs to obtain an

understanding of internal control activities relevant to

the audit.

Key components of an internal control system.

Important elements of internal control including the

control environment and management control

activities.

Difference between tests of control and substantive

procedures.

Importance of internal control to auditors.

How auditors identify weaknesses in internal control

systems and how those weaknesses limit the extent of

auditors’ reliance on those systems.

Internal control procedures and control activities.

Computer system controls

Tests of control suitable for inclusion in audit working

papers.

Application controls and general IT controls

Limitations of internal control components in the

context of fraud and error.

Need to modify the audit strategy and audit plan

following the results of tests of control.

Management’s risk assessment process with

reference to internal control components


Audit and Assurance


71


Internal management control.

Importance of internal control and risk management

in corporate governance.

Internal control systems.

Corporate governance and executive management

roles in risk management.

Importance of the elements or components of

internal control systems.

Need for adequate information flows to

management for the purposes of the management

of internal control and risk.

Qualities and characteristics of information required

in internal control and risk management and

monitoring

Section 13

Review

Purpose of a subsequent events review.

Procedures to be undertaken in performing a

subsequent events review.

Significance of the concept of going concern.

Importance of and the need for going concern

reviews.

Respective responsibilities of auditors and

management regarding going concern.

Procedures to be applied in performing going

concern reviews.

Disclosure requirements in relation to going concern

issues

Reporting implications of the findings of going

concern reviews.

Procedure for obtaining management

representations.

Quality and reliability of management

representations as audit evidence.

Circumstances where management representations

are necessary and the matters on which

representations are commonly obtained

Importance of the overall review of evidence

obtained.

Significance of unadjusted differences

Limitations of internal control components in the

context of fraud and error.

Need to modify the audit strategy and audit plan


Audit and Assurance


72


following the results of tests of control.

Management’s risk assessment process with

reference to internal control components

Internal management control.

Importance of internal control and risk management

in corporate governance.

Internal control systems.

Corporate governance and executive management

roles in risk management.

Importance of the elements or components of

internal control systems.

Need for adequate information flows to

management for the purposes of the management

of internal control and risk.

Qualities and characteristics of information required

in internal control and risk management and

monitoring


Modern Auditing, 3rd Edition 2008 / Cosserat and

Rodda/ Wiley/ ISBN 978 0470319734

Guide to Using International Standards on

Auditing in the Audits of Small- and Medium-

Sized Entities /3rd Edition 2011 / IFAC /

ISBN 978-1-60815-099-1

Volume 1:

http://ifac.org/sites/default/files/publications

/files/SMP-ISA-Audit-Guide-Volume-1-

3e_0.pdf

Volume 2:

http://ifac.org/sites/default/files/publications

/files/SMP-ISA-Audit-Guide-Volume-2-

3e_0.pdf


Financial and Corporate Reporting

Level – III: Professional – I Code: PP-301

73


Aim

The aim of this subject is :

To ensure that students

have the technical

knowledge and critical

understanding of how

to account for

transactions and

prepare financial

statements for both

single entities and

groups, in accordance

with international

financial reporting

standards and UK

GAAP.


apply the appropriate

judgment and technical

ability in the preparation

and interpretation of

financial statements for

complex business entities.

to evaluate and

communicate the impact

of current issues and

developments in

corporate reporting to

those who may not have

such theoretical and

technical expertise

Apply knowledge, skills

and exercise professional

judgment in the

application and

evaluation of financial

reporting principles and

practices in a range of

business contexts and

situations


On successful completion of this paper candidates

should be able to:

A). Discuss the professional and ethical duties of

the accountant

B). Evaluate the financial reporting framework

C). Advise on and report the financial

performance of entities

D). Prepare the financial statements of groups of

entities in accordance with relevant

accounting standards

E). Explain reporting issues relating to specialized

entities

F). Discuss the implications of changes in

accounting regulation on financial reporting

G). Appraise the financial performance and

position of entities

H). Evaluate current developments

I). Discuss, explain and apply the methods of

accounting for business combinations; and

Interpret financial statements and prepare

reports tailored to each user group’s

technical knowledge and understanding of

such statements




74


Section 01

The professional and ethical

duty of the accountant

Professional behaviour and compliance with


Appraise and discuss the ethical and

professional issues in advising on corporate

reporting

Assess the relevance and importance of

ethical and professional issues in complying

with accounting standards.

Ethical requirements of corporate reporting and the

consequences of unethical behaviour

Appraise the potential ethical implications of

professional and managerial decisions in the

preparation of corporate reports

Assess the consequences of not upholding

ethical principles in the preparation of

corporate reports.

Social responsibility

Discuss the increased demand for

transparency in corporate reports, and the

emergence of non-financial reporting

standards

Discuss the progress towards a framework for

environmental and sustainability reporting

Section 02

The Financial Reporting

Structure

The applications, strengths and weaknesses of an

accounting framework

Evaluate the “balance sheet” and “fair

value” models adopted by standard setters

Discuss the use of an accounting framework

in underpinning the production of


Assess the success of such a framework in

introducing rigorous and consistent


Critical evaluation of principles and practices

Identify the relationship between accounting

theory and practice

Critically evaluate accounting principles and

practices used in corporate reporting

Legal requirements relating to the preparation of

single entity financial statements

Recognize and apply the laws, regulations,

accounting standards and other requirements to the

preparation of statutory financial statements of an




75


entity, including the circumstances where an entity is

required to prepare and present statutory financial

statements

Section 03

Reporting Financial

Performance of Entities

Performance reporting

Prepare reports relating to corporate

performance for external stakeholders

Discuss the issues relating to the recognition

of revenue

Evaluate proposed changes to reporting

financial performance

Non-current assets

Apply and discuss the timing of the

recognition of non-current assets and the

determination of their carrying amounts

including impairments and revaluations

Apply and discuss the treatment of non-

current assets held for sale

Apply and discuss the accounting treatment

of investment properties including

classification, recognition and measurement

issues


of intangible assets including the criteria for

recognition and measurement subsequent to

acquisition and classification

Discuss and apply the key differences

between UK GAAP and IFRS in accounting

and noncurrent assets including revaluation,

impairment and investment property

Financial Instruments

Apply and discuss the recognition and

Decrecognition of financial assets and

financial liabilities

Apply and discuss the classification of

financial assets and financial liabilities and

their measurement

Apply and discuss the treatment of gains and

losses arising on financial assets and financial

liabilities

Apply and discuss the treatment of

impairments of financial assets

Account for derivative financial instruments,

and simple embedded derivatives

Outline the principles of hedge accounting

and account for fair value hedges and cash

flow hedges including hedge effectiveness.




76


Leases

Apply and discuss the classification of leases

and accounting for leases by lessors and

lessees

Account for and discuss sale and leaseback

transactions


between UK GAAP and IFRS in accounting for

leases.

Segment Reporting

Determine the nature and extent of

reportable segments

Specify and discuss the nature of segment

information to be disclosed



segments.

Employee Benefits


of

short term and long term benefits


of

defined contribution and defined benefit

plans

Account for gains and losses on settlements

and curtailments

Account for the “Asset Ceiling” test and the

reporting of actuarial gains and losses

Discuss the key differences between UK

GAAP and IFRS in accounting for Employee

Benefits

Taxation


measurement of deferred tax liabilities and

deferred tax assets

Determine the recognition of tax expense or

income and its inclusion in the financial

statements



taxation

Provisions, contingencies and events after the

reporting date

Apply and discuss the recognition,

Decrecognition and measurement of

provisions, contingent liabilities and

contingent assets including environmental

provisions

Calculate and discuss restructuring provisions

Apply and discuss the accounting for events




77


after the reporting date

Determine and report going concern issues

arising after the reporting date

Related parties

Determine the parties considered to be

related to an entity

Identify the implications of related party

relationships and the need for disclosure



related parties.

Share based payment


measurement criteria for share-based

payment transactions

Account for modifications, cancellations and

settlements of share based payment

transactions

Reporting requirements of small and medium sized

entities (SMEs)

Outline the principal considerations in

developing a set of accounting standards for

SMEs

Discuss solutions to the problem of differential

financial reporting

Discuss the reasons why the IFRS for SME’s

does not address certain topics

Discuss the accounting treatments not

allowable under the IFRS for SME’s including

the revaluation model for certain assets

Discuss and apply the simplifications

introduced by the IFRS for SME’s including

accounting for goodwill and intangible

assets, financial instruments, defined benefit

schemes, exchange differences and

associates and joint ventures

Discuss the key differences in principle

between IFRS and UK GAAP

Section 04

Financial Statements of Groups

of Accounts

Group accounting including cash flow

statements

Apply the method of accounting for business

combinations including complex group

structures

Apply the principles in determining the cost

of a business combination

Apply the recognition and measurement

criteria for identifiable acquired assets and

liabilities and goodwill including step




78


acquisitions

Apply and discuss the criteria used to identify

a subsidiary and an associate

Determine and apply appropriate

procedures to be used in preparing group


Identify and outline (using relevant legislation,

accounting standards and other applicable

regulation):

the circumstances in which a group is

required to prepare consolidated financial

statements

the circumstances when a group may claim

and exemption from the preparation of

consolidated financial statements

why directors may not wish to consolidate a

subsidiary and where this is permitted

Apply the equity method of accounting for

associates

Outline and apply the key definitions and

accounting methods which relate to interests

in joint arrangements

Prepare and discuss group cash flow

statements



business combinations

Continuing and discontinued interests

Prepare group financial statements where

activities have been discontinued, or have

been acquired or disposed of in the period

Apply and discuss the treatment of a

subsidiary which has been acquired

exclusively with a view to subsequent

disposal.

Changes in group structures

Discuss the reasons behind a group re

organisation

Evaluate and assess the principal terms of a

proposed group re organisation

Foreign transactions and entities

Outline and apply the translation of foreign

currency amounts and transactions into the

functional currency and the presentational

currency

Account for the consolidation of foreign

operations and their disposal




79


Section 05

Specialized Entities and

Specialized transactions

Financial reporting in specialized, not-for profit and

public sector entities

Entity schemes of arrangement and reconstructions

Identify when an entity may no longer be

viewed as a going concern or uncertainty

exists surrounding the going concern status

Identify and outline the circumstances in

which a scheme of arrangement or

reconstruction would be an appropriate

alternative to a company liquidation

Section 06

Implications of changes in

accounting regulation on

financial reporting

The effect of changes in accounting standards on

accounting systems

Apply and discuss the accounting implications of the

first time adoption of a body of new accounting

standards.[

Proposed changes to accounting standards

Identify issues and deficiencies which have led to a

proposed change to an accounting standard

Section 07

Current Reporting

Environmental and social reporting

Convergence between national and international

reporting standards

Current reporting issues

Section 08

Property, plant and equipment

Recognition of P, P & E in financial statements

Measurement of P, P & E.

Depreciation

Decrecognition

Section 09

Intangible assets

Recognition in statement of financial position

Initial measurement

Measurement subsequent to recognition

Decrecognition

Decrecognition of an intangible asset




80


Section 10

Investment property

Definition of investment property

Recognition in statement of financial position

Measurement at recognition

Measurement after recognition

Section 11

Impairment of assets

Identifying an impaired asset

Impairment review procedures

Recognising an impairment loss

Reversal of an impairment loss

Impairment of goodwill

Section 12

Non-current assets held for sale

and discontinued operations

Assets held for sale

Discontinued operations

Section 13

Share-based payment

Introduction

Equity settled share-based payment

Cash settled share-based payment

Share-based payment

transactions with a cash alternative

Section 14

Provisions, contingent liabilities

and contingent assets

Introduction

Provisions

Contingent liabilities and contingent assets




81


Section 15

Consolidated statement of

comprehensive income &

Business combinations

Intra-group items

Non-controlling interests

Dividends

Subsidiary acquired during the reporting period

The acquisition method

Recognition and measurement of assets and liabilities

acquired

Measurement period

Subsequent measurement and accounting

Separate financial statements of a parent

Section 16

Changes in ownership

Acquisition of shares

- business combination achieved in stages

- purchase of additional equity shares after control is

attained

Disposal of shares in a subsidiary

- loss of control

- disposals not resulting in a loss of control

Section 17

Investments in associates and

Joint ventures

Definition of an associate

Accounting for investments in associates

Goodwill arising on the acquisition of shares in an

associate

Upstream and downstream transactions

Reporting periods and accounting policies

Losses of an associate

Types of joint venture

- jointly controlled operations

- jointly controlled assets

- jointly controlled entities

Section 18

Misc. Accounting Issues

Events after the reporting period

Leases

Key definitions and classification of leases

Accounting by lessees

Accounting by lessors

Revenue

Measurement of revenue




82


Section 19

Financial Instruments and

disclosures

Capital instruments, reduction of capital and

distributable profits

Definition of a financial instrument

Financial liabilities and equity instruments

Classification of financial instruments

Recognition and measurement of financial

instruments

Classification and measurement of financial assets

Financial liabilities

Adjusting financial statements

Criteria for a successful business

Stock exchange/investor ratios

Operating segments

Determining reportable segments

Disclosure requirements

Calculation of basic EPS

Changes in ordinary share capital when computing

basic EPS

Diluted EPS

Categories of revenue: sale of goods; rendering of

services; interest, royalties and dividends

Customer loyalty programmes

Accounting for government grants

Initial recognition of grants

Recognition as income

Accounting treatment of government grants

Repayment of government grants

The effects of changes in foreign exchange rates

Identifying an entity’s functional currency

Recording transactions in an entity’s functional

currency

Monetary and non-monetary items

Use of a presentation currency other than an entity’s

functional currency

Translation of a foreign operation

Borrowing costs

Borrowing costs incurred in respect of qualifying

assets

Other borrowing costs




83


Section 25

IAS

11, 12, 14, 17,18, 20, 21, 27, 29, 30, 33, 36, 38, 40

Rules for first time adoption of IFRS

Introduction to IFRS 1

Opening IFRS statement of financial position

Exceptions to the retrospective application of other

IFRSs


Connolly / International Financial Accounting and

Reporting 3rd edition/ CAI 2011/ ISBN 9781907214646

Elliott and Elliott, Financial Accounting and Reporting,

2012 Prentice Hall (15th edition)ISBN 9780273760887

Cotter / Advanced Financial Reporting; A Complete

Guide to IFRS/ 2011/ ISBN 9781447915881

IFRS

IAS published by IASB


Corporate Law


84


Aim

This subject aims


understand the theory and

application of key aspects of

business and commercial law to

business organizations and

recognize issues that require the

advice of a legal professional. In

addition, they must comprehend,

apply and advise on the

regulatory and governance

requirements applicable to

business organizations.

To develop knowledge and skills in

the understanding of the general

legal framework, and of specific

legal areas relating to business,

recognizing the need to seek

further specialist legal advice

where necessary




A). Interpret, discuss and apply aspects of the

law relating to the structuring of business

entities and certain of their commercial

relationships.

B). Discuss the appointment, rights and duties of

receivers, liquidators and examiners and

outline the effects of receiverships,

liquidations or examinerships on key

stakeholders including; shareholders,

directors’ employees and creditors.

C). Distinguish between the different types of

credit and security, their legal consequences

and the formalities applicable to these.

D). Advise on the effects of receiverships,

liquidations or examinerships on key


directors, employees and creditors.

E). Advise on and lead best practice in

governance.

F). Outline and discuss the law of agency, and

distinguish between principal and agent and

their rights and duties.

G). Discuss and apply the main aspects of

employment law and be able to refer to and

interpret relevant sources.

H). Identify, if and when more specialist

knowledge is required and the source of such

expertise.

I). Recognize and compare types of capital

and the financing of companies

J). Describe and explain how companies are

managed, administered and regulated

K). Recognize the legal implications relating to

companies in difficulty or in crisis


Corporate Law


85


Section 01

Essential elements of the legal

system

Court structure

Define law and distinguish types of law

Explain the structure and operation of the

courts and tribunals systems

Sources of law

Explain what is meant by case law and

precedent within the context of the hierarchy

of the courts

Explain legislation and evaluate delegated

legislation

Illustrate the rules and presumptions used by

the courts in interpreting statutes

Human rights

Identify the concept of human rights as

expressed in the Human Rights Act 1998

Explain the impact of human rights law on

statutory interpretation

Explain the impact of human rights law on

the common law

Section 02

The Law of obligations

Formation of contract

Analyze the nature of a simple contract

Explain the meaning of offer and distinguish it

from invitations to treat

Explain the meaning and consequence of

acceptance.

Explain the need for consideration

Analyze the doctrine of privities

Distinguish the presumptions relating to

intention to create legal relations

Content of contracts

Distinguish terms from mere representations

Define the various contractual terms

Explain the effect of exclusion clauses and

evaluate their control

Breach of contract and remedies

Explain the meaning and effect of breach of

contract

Explain the rules relating to the award of damages

Analyze the equitable remedies for breach of

contract

The law of torts

Explain the meaning of torts

Identify examples of torts including ‘passing


Corporate Law


86


off’ and negligence

Explain the duty of care and its breach

Explain the meaning of causality and

remoteness of damage

Discuss defences to actions in negligence

Explain and analyze the duty of care of accountants

and auditors

Section 03

Law of Employment

Contract of employment

Distinguish between employees and the self-

employed.

Explain the nature of the contract of

employment and give examples of the main

duties placed on the parties to such a

contract

Dismissal and redundancy

Distinguish between wrongful and unfair

dismissal including constructive dismissal

Explain what is meant by redundancy

Discuss the remedies available to those who

have been subject to unfair dismissal or

redundancy

Contract of employment, contract of service and

contract for services.

• Formation of the contract.

• Terms of the contract.

• Rights of the employee.

• Duties and rights of the employer.

• Termination, unfair and wrongful dismissal,

redundancy.

• Maternity leave, Paternity leave, Adoptive leave,

Parental leave, Force majeure leave – rights and

entitlements

Section 04

Business Organizations &

Company formation

Define the role of the agent and give

examples of such relationships paying

particular regard to partners and company

directors

Explain how the agency relationship is

established

Define the authority of the agent.

Explain the potential liability of both principal

and agent

Demonstrate a knowledge of the legislation

governing the partnership, both unlimited

and limited


Corporate Law


87


Discuss how partnerships are established

Explain the authority of partners in relation to

partnership activity.

Analyze the liability of various partners for

partnership debts

Explain the way in which partnerships can be

brought to an end and partners’ subsequent

rights and liabilities.

Limited Companies

Explain the role and duties of company promoters.

Explain the meaning of, and the rules relating to, pre-

incorporation contracts

Describe the procedure for registering companies,

both public and private

Describe the statutory books, records and returns that

companies must keep or make

Analyze the effect of a company’s constitutional

documents

Describe the contents of model articles of association

Explain how articles of association can be changed

Explain the controls over the names that companies

may or may not use

How a company is formed, types of company that

may be formed, memorandum of association, articles

of association, alteration for the Constitutional

Documents, the promoters and pre-incorporation

contracts.

Separate legal personality of the company, lifting the

veil of incorporation, the ultra vires rule, liability of a

company in respect to unauthorized or irregular

transactions in both tort and criminal law,

Section 05

Sources of Finance

Share capital

Examine the different meanings of capital

Explain allotment of shares and distinguish

between rights issue and bonus issue of

shares

Illustrate the difference between various

classes of shares

Explain the procedure for altering class rights.

Loan capital

Define companies’ borrowing powers

Explain the meaning of debenture

Distinguish loan capital from share capital

and explain the different rights held by

shareholders and debenture holders.

Explain the concept of a company charge

and distinguish between fixed and floating


Corporate Law


88


charges

Describe the need and the procedure for

registering company charges

Capital maintenance and dividend law

Explain the doctrine of capital maintenance

and capital reduction

Explain the nature of treasury shares

Examine the effect of issuing shares at either

a discount, or at a premium

Explain the rules governing the distribution of

dividends in both private and public

companies

Section 06

Management, Administration

and Regulation of Companies

Explain the role of directors in the operation

of a company

Discuss the ways in which directors are

appointed, can lose their office or be subject

to a disqualification order.

Distinguish between types of directors, such

as executive/ non-executive directors or de

jure and de facto directors

Distinguish between the powers of the board

of directors, the managing director/chief

executive and individual directors to bind

their company

Explain the duties that directors owe to their

companies.

Demonstrate an understanding of the way in

which statute law has attempted to control

directors

Other company officers

Discuss the appointment procedure relating

to, and the duties and powers of, a company

secretary

Discuss the appointment procedure relating

to, and the duties, powers and rights of

company auditors and their subsequent

removal or resignation.

Company meetings and resolutions

Distinguish between types of meetings:

ordinary general meetings and annual

general meetings

Explain the procedure for calling such

meetings

Detail the procedure for conducting

company meetings.

Distinguish between types of resolutions:

ordinary, special, and written.


Corporate Law


89


Section 07

Insolvency

Explain the meaning of and procedure involved in

voluntary liquidation

Explain the meaning of, the grounds for, and the

procedure involved in compulsory liquidation.

Explain the order in which company debts will be

paid off

Section 08

Examinership, Receivership

and Liquidation

Charges and crystallisation of

charges

Protection of investors and creditors.

Appointment, rights and duties and powers of an

Examiner.

Examinership process, report, schemes of

arrangement.

Appointment, rights, duties and powers of a Receiver.

Appointment, rights and duties of a Liquidator

Types of winding up, compulsory winding up,

voluntary winding up - the distinction between

members and creditors voluntary liquidations.

Effects of examinerships, receiverships or liquidations

on shareholders, directors and employees - as well as

potential liability.

Order of payment of debts and charges on

liquidation.

Accounts of an Examiner, Receiver and Liquidator


Keane / Company Law, 4th revised edition / Tottel

2007 / ISBN 9781845922986

Courtney / The Law of Private Companies, 2nd edition

/ Tottel 2002 / ISBN/ISSN 1854752650

Cahill / Company Law and Enforcement / Tottel 2008

/ ISBN 9781845921057.

White / Commercial Law / Wiley and Sons 2ed

2012 / ISBN 9781858006321


Financial Strategy


90


Aim


develop students’ critical

understanding of the key

responsibilities and financing

decisions facing today’s strategic

financial manager. Students

should be able to develop

detailed business plans, to assess

potential financial risks, and to

advise on suitable risk

management strategies for

entrepreneurial activities and

established organizations.



should be able to:

A). Evaluate the financial objectives of an

organisation, explain how they are

determined and interrelate with the non-

financial objectives and stakeholder interests.

B). Discuss the legal regulations, and the

professional and ethical considerations

facing financial managers.

C). Value shares / businesses in the context of a

proposed merger, acquisition or

management buyout.

D). Analyze reasons for and advise on actions to

prevent corporate failure.

E). Evaluate and advise as to the optimum

capital gearing structure, term structure and

dividend policy for an organisation.

F). Advise as to appropriate exchange risk and

interest rate risk management strategies, and

discuss the use of derivatives in long-term risk

management.

G). Discuss the relevance of portfolio theory and

the Capital Asset Pricing Model to financial

managers.

H). Prepare a business plan for an organisation

given prescribed information.

I). Evaluate the financial management of an

organisation over a period of time and/or

relative to competitors / industry norms.


Financial Strategy


91


Section 01

The strategy Process

Levels of strategy and planning

Setting mission, aims, goals & objectives

Matching strategy and structure

The competitive environment

Ethical, political & social considerations

Strategic Management and Operational

Management

Perspectives on Strategy

Deliberate and emergent strategy

The Marketing Dimension: – Marketing management

concepts– Analyzing marketing opportunities-Market

segmentation– The marketing mix– Strategic planning

and marketing management– Marketplace models

Section 02

The Strategic Position

Environmental Analysis: – The macro environment–

Industry/Sector analysis– Market analysis–

Opportunities and threats

Assessing Strategic Capability: – Critical success

factors– Assessing resources– Identifying core

competencies– Benchmarking– Assessing strengths

and weaknesses

Measuring Stakeholder Expectations: – Corporate

governance. – Stakeholder analysis. – Identifying

stakeholder expectations – Business ethics– Cultural

considerations

Section 03

Strategy Implementation

Structure and Processes:– Organisation structure–

Planning and control systems(incl. ERP, Balanced

Scorecard)– Market mechanisms– Social/cultural

process.

Managing Key Enablers:– People– H.R. management–

Organizational behaviour– Leadership: – Culture

change– Knowledge creation– Information and

Technology– Knowledge management

Managing the Change Process– Change

management– Analyzing the change situation– The

nature of change– Changing organizational culture. –

Organizational communications.


Financial Strategy


92


Section 04

Financial Environment

Aims and objectives of profit seeking and non-profit

seeking organizations

the inter-relationship between financial management

management accounting and financial accounting

Interests and influence of key stakeholder groups

Ethics and corporate governance issues in

Managerial Finance

Section 05

Sources of Finance

Equity / debt financing and associated risks,

Short, medium and long-term finance,

The nature and importance of internally generated

funds,

Determinants of capital structure

The nature and role of capital markets, - types of

share capital including: rights issues, convertibles,

warrants, etc,.

Sources of government finance, including: grants,

national aid schemes, tax incentives etc., Venture

capital financing; nature, benefits and risks

Section 06

Working Capital Management

Effective working capital management strategies

and corporate survival,

Cash budgets/cash flow forecasts,

The operating cycle,

Debtor and creditor management techniques

including: credit evaluation, terms of credit,

settlement discounts, debt collection techniques,

factoring and invoice discounting

Inventory management techniques, including EOQ

and JIT, Overtrading - symptoms, causes and

remedies

Section 07

Business Valuations

Methods of valuing a business, including:

– Asset bases.

– Earnings bases.

– Discounted cash flow.

– Dividend yield.

– Dividend growth.


Financial Strategy


93


Section 08

Cost of Capital

Cost of equity, dividend growth and Capital Asset

Pricing Model (CAPM)

Cost of redeemable and irredeemable debt,

WACC – Calculation, application and interpretation,

Systematic and unsystematic risk,

Portfolio diversification,

Portfolio theory and its application in practical

financial management

Dividend decisions

Calculation and interpretation the risk and return of a

two-asset portfolio

Section 09

Formulation of Financial

Strategy

The financial and non-financial objectives of different

organizations.

The three key decisions of financial management

and their links.

Benefits of matching characteristics of investment

and financing in the longer term, and in short-term

hedging strategies.

Considerations in the formulation of dividend policy

and dividend decisions, including meeting the cash

needs of the business.

External constraints on financial

Developing financial strategy in the context of

regulatory requirements and international operations.

The financial objectives of an organisation and

economic forces affecting its financial plans

Assessing attainment of financial objectives.

Use of financial analysis in the external assessment

Analysis of sensitivity to changes in expected values in

the above models and forecasts

The lender’s assessment of creditworthiness

Section 10

Strategic Financial Decisions

Identifying financing requirements (both in respect of

domestic and international operations) and the

impacts of different types of finance on models and

forecasts of performance and position.

Working capital management strategies.

Types and features of domestic and international

long-term finance: share capital (ordinary and

preference shares, warrants), long-term debt (bank

borrowing and forms of securitised debt, e.g.

convertibles) and finance leases, and methods of


Financial Strategy


94


issuing securities.

The operation of stock exchanges (e.g. how share

prices are determined, what causes share prices to

rise or fall, and the efficient market hypothesis).

The impact of changing capital structure on the

market value of a company.

The capital asset pricing model (CAPM): calculation

of the cost of equity using the dividend growth model

(knowledge of methods of calculating and

estimating dividend growth will be expected), the

ability to gear and un-gear betas and comparison to

the arbitrage pricing model.

The ideas of diversifiable risk (unsystematic risk) and

systematic risk.

The cost of redeemable and irredeemable debt,

including the tax shield on debt.

The weighted average cost of capital (WACC):

calculation, interpretation and uses.

The lease or buy decision (with both operating and

finance leases)

Criteria for selecting sources of finance, including

finance for international investments.

The effect of financing decisions on balance sheet

structure and on ratios of interest to investors and

other financiers.

Section 11

Corporate Failure

The symptoms and causes of corporate failure.

Avoidance of corporate failure

The nature, scope and elements of working capital

and the importance of effective working capital

management to corporate survival.

Overtrading- symptoms, causes and remedies

Section 12

Investment Decisions and

Project Control

Identification of a project’s relevant costs (e.g.

infrastructure, marketing and human resource

development needs), benefits and risks

Linking investments with customer requirements and

product/service design

Linking investment in IS/IT with strategic, operational

and control needs (particularly where risks and

benefits are difficult to quantify).

Calculation of a project’s net present value and

internal rate of return, including techniques for

dealing with cash flows denominated in a foreign

currency and use of the weighted average cost of

capital.

The modified internal rate of return based on a


Financial Strategy


95


project’s “terminal value” (reflecting an assumed

reinvestment rate).

The effects of taxation (including foreign direct and

withholding taxes), potential changes in economic

factors (inflation, interest and exchange rates) and

potential restrictions on remittances on these

calculations.

Recognizing risk using the certainty equivalent

method (when given a risk free rate and certainty

equivalent values).

Adjusted present value

Valuation bases for assets (e.g. historic cost,

replacement cost and realisable value), earnings

(e.g. price/earnings multiples and earnings yield) and

cash flows (e.g. discounted cash flow, dividend yield

and the dividend growth model).

The strengths and weaknesses of each valuation

method and when each is most suitable, e.g. by

reference to type of investee organisation (service,

capital intensive etc).

Forms of intangible asset (including intellectual

property rights, brands etc). and methods of

valuation.

Application of the efficient market hypothesis to

business valuations

Selection of an appropriate cost of capital for use in

valuation

Capital investment real options (i.e. to make follow-

on investment, abandon or wait)

Single period capital rationing for divisible and non-

divisible projects.

Recognition of the interests of different stakeholder

groups in mergers, acquisitions and company

valuations

The reasons for merger or acquisitions

Forms of consideration and terms for acquisitions (e.g.

cash, shares, convertibles and earn-out

arrangements), and their financial effects.

The post-merger or post-acquisition integration

process (e.g. management transfer and merger of

systems)

The function/role of management buy-outs and

venture capitalists

Types of exit strategy and their implications.

The reasons for (e.g. strategic change, opportunity

cost of investment) and mechanisms of demerger or

divestment


Financial Strategy


96


Project implementation and control in the

conceptual stage, the development stage, the

construction stage and initial

manufacturing/operating stage

Post completion audit of investment projects

Section 13

Financial Analysis and Business

Planning

Preparation of long-term business plans from

prescribed information.

Appraise capital investment options using NPV, IRR

and Payback criteria.

Evaluation of a business plan from the perspective of

an equity investor or provider of debt funding.

Assessment of an organization’s current financial

position

Section 14

Financial Risk Management

The key financial risks facing an Organisation

Currency risk - transaction, translation and economic

exposure.

The workings of the foreign exchange markets.

The relationship between foreign exchange rates and

interest rates in different countries

Forward Exchange Contract and Money Market

hedges

Other forms of exchange rate risk management

including, netting, leading and lagging, currency

swaps, currency futures and currency options

Exchange risk management Strategies

Interest rate options, swaps, forwards, futures and

swap options.

Interest rate risk management strategy


Corporate Financial Strategy y Ruth Bender

Strategic Management – Text and Cases by Dess,

Eisner and Lumpkin

Financial Management & Policy by James

C. Van Horne

Exploring Corporate Strategy / Johnson G., Scholes K

Arnold / Corporate Financial Management 5th

Edition/ Pearson 2012 / ISBN 9780273758839


Corporate Governance

Level – III: Professional – I Code: FP-503

97


Aim

This subject aims to ensure that

students must comprehend,

apply and advise on the

regulatory and governance

requirements applicable to

business organizations.

To apply relevant knowledge,

skills and exercise professional

judgment in carrying out the

role of the accountant relating

to governance, internal

control, compliance and the

management of risk within an

organisation, in the context of

an overall ethical framework


A). On successful completion of this paper,

candidates

B). should be able to:

C). Define governance and explain its function in

the effective management and control of

organizations and of the resources for which

they are accountable

D). Evaluate the Professional Accountant’s role in

internal control, review and compliance

E). Explain the role of the accountant in

identifying and assessing risk

F). Explain and evaluate the role of the

accountant in controlling and mitigating risk

G). Demonstrate the application of professional

values and judgment through an ethical

framework that is in the best interests of

society and the profession, in compliance

with relevant professional codes, laws and

regulations

H). Advise on the effects of receiverships,

liquidations or examiner ships on key


directors, employees and creditors

I). Advise on and lead best practice in

governance

J). Discuss and apply the main aspects of

employment law and be able to refer to and

interpret relevant sources




98


Section 01

The scope of governance

Define and explain the meaning of

corporate governance

Explain, and analyze the issues raised by the

development of the joint stock company as

the dominant form of business organisation

and the separation of ownership and control

over business activity

Analyze the purposes and objectives of


Explain, and apply in context of corporate

governance, the key underpinning concepts

of

i) fairness

ii) openness/transparency

iii) independence

iv) probity/honesty

v) responsibility

vi) accountability

vii) reputation

viii)judgment

ix) integrity

Explain and assess the major areas of

organizational life affected by issues in


Compare, and distinguish between public,

private and non-governmental organizations

(NGO) sectors with regard to the issues raised

by, and scope of, governance

Explain and evaluate the roles, interests and

claims of, the internal parties involved in


Explain and evaluate the roles, interests and

claims of, the external parties involved in


Analyze and discuss the role and influence of

institutional investors in corporate

governance systems and structures, for

example the roles and influences of pension

funds, insurance companies and mutual

funds




99


Section 02

Agency relationships and

theories

Define and explore agency theory

Define and explain the key concepts in agency

theory

i) Agents

ii) Principals

iii) Agency

iv) Agency costs

v) Accountability

vi) Fiduciary responsibilities

vii) Stakeholders

Explain and explore the nature of the principal agent

relationship in the context of corporate governance

Analyze and critically evaluate the nature of

agency accountability in agency relationships

Explain and analyze the following other

theories used to explain aspects of the agency

relationship

i) Transaction costs theory

ii) Stakeholder theory

Section 03

The board of directors

Explain and evaluate the roles and responsibilities of

boards of directors

Describe, distinguish between and evaluate the

cases for and against, unitary and two-tier board

structures

Describe the characteristics, board composition and

types of, directors (including defining executive and

non-executive directors

Describe and assess the purposes, roles and

responsibilities of NEDs

Describe and analyze the general principles of legal

and regulatory frameworks within which directors

operate on corporate boards

i) legal rights and responsibilities,

ii) time-limited appointments

iii) retirement by rotation,

iv) service contracts,

v) removal, vi) disqualification

vii) conflict and disclosure of interests

viii)insider dealing/trading

Define, explore and compare the roles of the chief

executive officer and company chairman

Describe and assess the importance and execution




100


of, induction and continuing professional

development of directors on boards of directors

Explain and analyze the frameworks for assessing the

performance of boards and individual directors

(including NEDs) on boards

Explain the meanings of ‘diversity’ and critically

evaluate issues of diversity on boards of directors

Section 04

Board committees

Explain and assess the importance, roles and

accountabilities of, board committees in corporate

governance

Explain and evaluate the role and purpose of the

following committees in effective corporate

governance

i) Remuneration committees

ii) Nominations committees

iii) Risk committees.

iv) Audit committees

Section 05

Directors’ remuneration

Describe and assess the general principles of

remuneration.

i) purposes

ii) components

iii) links to strategy

iv) links to labour market conditions

Explain and assess the effect of various components

of remuneration packages on directors’ behaviour

i) basic salary

ii) performance related

iii) shares and share options

iv) loyalty bonuses

v) benefits in kind

vi) pension benefits

Explain and analyze the legal, ethical, competitive

and regulatory issues associated with directors’

remuneration

Section 06

Different approaches to


Describe and compare the essentials of ‘rules’

‘principles’ based approaches to corporate

governance. Includes discussion of ‘comply or

explain

Describe and analyze the different models of business

ownership that influence different governance

regimes (e.g. family firms versus joint stock company-

based models)




101


Describe and critically evaluate the reasons behind

the development and use of codes of practice in

corporate governance (acknowledging national

differences and convergence)

Explain and briefly explore the development of

corporate governance codes in principles-based

jurisdictions.

i) impetus and background

ii) major corporate governance codes

iii) effects of

Explain and explore the Sarbanes-Oxley Act

(2002) as an example of a rules-based

approach to corporate governance

OECD

Section 07

Corporate governance and

corporate social responsibility

Explain and explore social responsibility in the context

of corporate governance

Discuss and critically assess the concept of

stakeholders and stake holding in organizations and

how this can affect strategy and corporate

governance

Analyze and evaluate issues of ‘ownership,’

‘property’ and the responsibilities of ownership in the

context of shareholding

Explain the concept of the organisation as a

corporate citizen of society with rights and

responsibilities

Section 08

Governance: reporting and

disclosure

Explain and assess the general principles of disclosure

and communication with shareholders

Explain and analyze ‘best practice’ corporate

governance disclosure requirements

Define and distinguish between mandatory and

voluntary disclosure of corporate information in the

normal reporting cycle

Explain and explore the nature of, and reasons and

motivations for, voluntary disclosure in a principles-




102


based reporting environment

Explain and analyze the purposes of the annual

general meeting and extraordinary general meetings

for information exchange between board and

shareholders

Proxy voting

Section 09

Internal Control and Review

Define and explain internal management control

Explain and explore the importance of internal

control and risk management in corporate

governance

Define and distinguish between mandatory and

voluntary disclosure of corporate information in the

normal reporting cycle

Describe the objectives of internal control

systems

Identify and assess the importance of the elements or

components of internal control systems.

Explain, and discuss the importance of, auditor

independence in all client-auditor situations

Explain, and assess the nature and sources of risks to,

auditor independence. Assess the hazard of auditor

capture

Explain and evaluate the importance of compliance

and the role of the internal audit function in internal

control

Describe and analyze the work of the internal audit

committee in overseeing the internal audit function

Section 10

The Theory and Practice of


The Concept of Corporation

Corporate Governance Mechanism

CG Systems

What is Good CG

Obligation to society at large

Obligation to Investors

Obligation to Employees,

Obligation to Customers

Managerial Obligation




103


Section 11

Corporate Governance and

Other Stakeholders

CG and Employees

Customers

Institutional investors

Creditors

Community

Government

Section 12

Business Ethics and Corporate

Governance

Importance and need of Business Ethics

Roots of Unethical Behaviour

Some Unethical issues

CG Issues,

How Ethics can make CG more meaningful?

Section 12

Corporate Governance in

Developing and Transition

Economies

Problems faced by developing and transitional

economies

CG Models

CG Challenges in Developing economies

Section 13

The Corporation in a Global

Society

The emergence of CG issues in UK

Efforts to initiate CG in the country

Pioneers in Good Governance Practices

The future of CG in UK




104



Keane / Company Law, 4th revised edition / Tottel

2007 / ISBN 9781845922986.

Governance Risk and Ethics / BPP Manual ACCA P1 /

ISBN 9781445377674

Corporate Governance by A C Fernando


Advanced Taxation

Level – IV: Professional – II Code: PP-402

105


Aim

To apply relevant knowledge -


judgment in providing relevant

information and advice to

individuals and businesses on

the impact of the major taxes

on financial decisions and

situations.

The aim of this subject is to ensure

that students understand and can

apply the principles and practice

of advanced taxation, and are

able to identify and resolve

practical taxation problems.

Students are expected to interpret

and apply relevant case law and

to advise on the most tax efficient

structures.



should be able to:

Apply the computational rules for Income Tax

in the preparation of Income Tax returns and

advise on appropriate tax planning

measures, including the use of available

reliefs and allowances.

Apply the computational rules for

Corporation Tax in the preparation of

Corporation Tax returns and advise on

appropriate tax planning measures including

the use of available reliefs.

Apply the computational rules for Capital

Gains Tax in the preparation of Capital Gains

Tax returns and advice on appropriate tax

planning measures including the use of

available reliefs.

Explain and advise on the requirements of a

Revenue Audit so as to enable client /

employer compliance.

Explain the operation of the VAT system,

apply the computational rules for VAT and

provide appropriate advice.

Explain the operation of Capital Acquisition

Tax, apply the computational rules for

Capital Acquisition Tax and provide

appropriate advice.

Explain the principles of Stamp Duties and

calculate any duty tax payable having

optimized the use of any available reliefs

Identify and evaluate the impact of relevant

taxes on various situations and courses of

action, including the interaction of taxes

Provide advice on minimizing and/or

deferring tax liabilities by the use of standard

tax planning measures

Communicate with clients, HM Revenue and

Customs and other professionals


Advanced Taxation


106


Section 01

Knowledge and understanding

of the UK tax system

Income and income tax liabilities in situations

involving further overseas aspects and in relation to

trusts, and the application of exemptions and reliefs

Residence and domicile.

Tax Based Incentives.

Withholding Taxes.

Charges.

Exemptions.

Anti-Avoidance.

Employment and Investment Incentive

Scheme, Film Relief and Seed Capital Relief.

Employee incentive schemes including profit

sharing schemes,

Special Assignee relief programme

Foreign Earnings deduction

The scope of income tax

Income from employment

Income from self employment

Property and investment income

The use of exemptions and reliefs in deferring

and minimizing income tax

liabilities

Corporation tax liabilities in situations involving further

overseas and group aspects and in relation to special

types of company, and the application of

exemptions and reliefs.

Adjustments to the accounting profits for tax

purposes, claiming capital allowances, and the

impact of changes to accounting periods

• Close companies, including definitions, meaning of

participator and effect of close company status.

Distributions, including meaning of distribution, classes

of distribution and their calculation and dividend

withholding tax.

• Groups, including annual payments and losses for

Groups / Consortia.

• Corporation Tax Reliefs, including tax incentives,

R&D Tax Credits, Holding Company Regime.

• Company Residence, Double Taxation Relief, and

treatment of branches.

• Exemption for start-up companies..

Inheritance tax


Advanced Taxation


107


Section 02

Capital acquisition Tax

Chargeable gains and capital gains tax liabilities in

situations involving further overseas aspects and in

relation to closely related persons and trusts, and the

application of additional exemptions and reliefs.

• Principles of CAT including territorial scope.

• General exemptions including significant buildings

and works of art.

• Agricultural Relief.

• Business Property Relief.

• The use and taxing of Discretionary Trusts.

• Anti-avoidance.

Section 03

The importance of taxation to

personal and corporate

financial management

The principles underlying personal financial

management

How an individual’s personal financial objectives may

differ depending on their circumstances and

expectations

The common forms of personal finance and

investment products in a given set of circumstances,

including ethical considerations.

How a business’ financial objectives may differ

depending on its circumstances and the business

environment

How taxation can affect the financial decisions made

by businesses and by individuals.

Other considerations, personal and commercial,

which might affect a financial decision

Section 04

The impact of relevant taxes

on various situations and

courses of action

Taxes applicable to a given situation or course of

action and their impact

Alternative ways of achieving personal or business

outcomes may lead to different tax consequences

Tax advantages and/or disadvantages of alternative

courses of action

Statutory obligations imposed in a given situation,

including any time limits for action and the

implications of non-compliance


Advanced Taxation


108


Section 05

Minimizing and/or deferring tax

liabilities by the use of

standard tax planning

measures

Types of investment and other expenditure that will

result in a reduction in tax liabilities for an individual

and/or a business.

Legitimate tax planning measures, by which the tax

liabilities arising from a particular situation or course of

action can be mitigated.

The appropriateness of such investment, expenditure

or measures, given a particular taxpayer’s

circumstances or stated objectives

The mitigation of tax in the manner recommended,

by reference to numerical analysis and/or reasoned

argument

Ethical and professional issues arising from the giving

of tax planning advice

Current issues in taxation

Section 06

Communicating with clients,

HM Revenue and Customs and

other professionals

Communication of advice, recommendations and

information in the required format

Presentation of written information, in language

appropriate to the purpose of the communication

and the intended recipient

Conclusions reached with relevant supporting

computations

Assumptions made or limitations in the analysis

provided, together with any inadequacies in the

information available and/or additional information

required providing a fuller analysis.

Other non-tax factors that should be considered.

Section 07

Capital Gain Tax

Computation of Capital Gains Tax liabilities for both

individuals and companies.

• Share Valuations

• The scope of Capital Gains Tax Retirement Relief.

• Transfer of business to company.

• Development land.

• Wasting Assets.

• Interaction with CAT.

• Acquisition by a company of its own shares.

• Principal Private Residence Relief.

• Paper for paper relief.

• Group Transfers.

• Reconstruction relief.

• Clearance Certificates/Withholding tax.

• Anti-avoidance.


Advanced Taxation


109


Section 0

VAT

General principles of VAT.

Supplies of goods.

Supplies of services.

Exemptions.

Amount on which tax is chargeable.

VAT rates, self supplies.

VAT on property.

EU VAT legislation/regulations.

International Transactions.

• Anti-avoidance.

Reading Material

Advanced Audit and Assurance (INT): Key Notes Published

by Get Through Guides Ltd.

Audit & Assurance, Association of Certified Chartered

Accountant, Published by Kaplan.

Audit & Assurance (UK) : Study Text, Published by BPP

Learning Media.

Forensic Accounting and Fraud Investigation for non-

experts, by H Silverstone and M Sheetz, 2nd edition,

Published by Wiley, 2007.

Practical Auditing by Spice & Pegier, H.F.L Publishing Ltd.

Auditing by Culey and Baner South Wastern Publishing co.

Principles of Auditing by Depaula , Isaac Pitman & Sons Ltd

International IASC & Auditing Guideline by IASC IFAC &CLA

Notification, ASC.IFAC. CLA

EDP Auditing conceptual Foundation & Practice by Ron

Weber, Mograw Book co.


IT Audit & Control


110


Aim

This course is designed 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.

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. 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.


IT Audit & Control


111


Section 01

Database and File Organization

The file organisation approach

The database management systems (DBMS

(DBMS) vs. file organisation methods

Types of databases

Database purchase issues

Database design & maintenance issues

Database design principles

Section 02

IS Development

The System Development Life Cycle-

Alternatives to SDLC e.g. Prototyping, RADE- System

development and management considerations-

The impact of building new systems on organizational change

Developing information systems that support an

organization’s business plan

The challenges of building information systems and

management solutions

Section 03

A Foundation for IT Audit and Control

IT environment

Why are Controls and Audit Important

IT Today and Tomorrow

Information Reliability

Integrity and Validity Importance

Control and Audit

A Global Concern

E-Commerce and EFT

Legal Issues Impacting IT

Privacy on the Info Superhighway

Security Privacy and Audit

Section 04

Audit and Review: Its Role in IT

Audit Standards

Importance of Audit Independence

GAAP

GAAS

IT Auditing

What is IT


IT Audit & Control


112


Need for the IT Audit Function

Auditors must have Independence

Auditor: Knowledge, skills and Abilities

Role of IT Auditor

IT Auditor as a Counselor

IT Auditor as Investigator

Section 05

Audit Process in an IT

Environment

Audit Universe

Risk Assessment;

Audit Plan

Developing an Audit Schedule

Audit Budget

Audit Process

Design Audit Procedures

Fieldwork and Implementing Audit Methodology

Validation of Work Performed

Substantive Testing

Documenting results

Communication Strategy

Section 06

Auditing IT using CAAT

Auditor Productivity Tools

Using CAAT in the Audit Process

Flowcharting Techniques

Flowcharting as an Analytical Tool

CAAT for Operational reviews

CAAT for Operational Reviews

Webmetrics

Web metrics as an Audit Tool

Computer Forensics

Section 06

Control Frameworks

Risks and exposures in computer-based information

systems

IT Control Frameworks:

COBIT

ITCG


IT Audit & Control


113


SysTrust

WebTrust

Section 07

Control Objectives

Effectiveness

efficiency

economy of operation

Reliability of financial reporting

Effectiveness of control

IT asset safeguarding

Compliance with applicable laws and regulations

System reliability

Data integrity

Section 08

Layer of Control & Control

environment

Societal Organizational environment Technology

infrastructure Software Business process

External regulatory controls

Board/audit committee governance;

Management philosophy and operating style;

Plans/structure of organization;

Method to communicate the assignment of authority and responsibility;

Management control methods

Section 09

Risk Assessment

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


IT Audit & Control


114


Section 10

IT Project Management

Organizing Projects;

Project Planning

Project Management Body of Knowledge

Auditor’s Role in Project management Process;

Importance of Project Planning and Control in SDLC

Section 11

Software Development and

Implementation

Approaches to Software development

SW Development Process

End-User Development

System Implementation Process

User Acceptance Testing

Auditor’s Role in the Development Process

SDLC

Section 12

Application controls and

Maintenance

Application Risks

End-User Computing Application Risks

EDI Application Risks;

Application Controls

ASLC

Section 13

Change Management

Change Control;

Vulnerabilities in SW Development and Change Control

IT Change Management

Change Management System

Controls Over changes

Emergency Change Process

Organizational Change Management

Audit Involvement


IT Audit & Control


115


Section 14

Information Asset Protection

Information Security Management;

Logical Access Controls

Network Security Controls

Environmental Controls

Physical Security Controls

Auditing Asset Protection

Section 15

Virtual Environment

IT Operation Issues in Network Installation

Types of WANs

Elements of WANS

Tools of Network Monitoring

Feature of Intranets and other networks

Section 16

Virtual Security

Interconnected Systems and E-Commerce

Exploiting the TCP/IP Holes

Recommendation to IT

Auditors; Intranet/ Extranet Security

Wireless Technology


Management Information Systems by Laudon and

Laudon,

A Complete book on Information Technology by Dr. Rajesh Trehan

IT Control and Audit by Sandra Senft, Frederick

Gallegos

Information Systems: The Foundation of E-Business by

Steven Alter

IFAC Guidelines on IT


Advanced Accounting


116


Aim

The aim of this subject is


apply the appropriate

judgment and

technical ability in the

preparation and

interpretation of

financial statements for

complex business entities.

To prepare the students

to appreciate

prevailing financial

regulatory environment

and to apply the

knowledge gained to

practical situations for

arriving at pragmatic solutions

To focus on preparing

analyzing financial

statements and

developing reports

thereon.

To use knowledge and

understanding of more

financial accounting for

prep and interpret

financial statements in

context of practice.




A). Prepare the financial statements of

companies, groups and associated

undertakings, including overseas

B). subsidiary undertakings, in accordance with

International Financial Reporting Standards

(IFRS), company law and UK Law

These include:

– Statements of Comprehensive Income, Statements

of Financial Position, Statements of Changes in Equity,

and – Cash flow Statements.

C). Apply and explain the acquisition method of accounting and related disclosure

requirements in financial statements and

notes.

D). Interpret and apply international financial

reporting standards and interpretations

adopted by the IASB, selecting the

appropriate accounting treatment for

transactions and events.

E). Analyze and evaluate financial statements

F). Prepare Advanced Partnership Accounts

and amalgamation

G). Valuing business

H). Prepare Royalty, Insurance, and Investment

accounts

I). Calculate Goodwill purchased or not

J). How firms are amalgamated

K). How branches calculate profit/loss


Advanced Accounting


117


Section 01

Legislation & Preparation of

Financial Statements

Company Law relating to the preparation of financial statements

European Communities (Companies Group

Accounts)

Regulations 1992

Statutory financial statements for incorporated

entities,

Consolidated financial statements

Section 02

Analysis , Evaluation and

Interpretation of Financial

Statements

Ratio analysis

Critical appraisal of financial statements

Economic events

Business issues

Accounting choices

Ethical issues

Industry analysis

Non-financial performance measures

Advanced earnings measures

Limitations of ratios and financial statement analysis

Interpretation of financial statements and

preparation of reports thereon

cash flow analysis

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 director report

Needs of various users of financial statements and its

importance

Techniques for analysis

Earnings per share (EPS)


Advanced Accounting


118


Section 03

Accounting for Technical

Statements

Accounting for goods sold subject to reservation of title

Accountants’ reports on profit forecasts

Accounting for the redemption and purchase of own

shares by companies in the Uk and International

Related Party Disclosures

Reporting to third parties

Section 04

Partnership Accounts

Dissolution of partnership firms including piecemeal

distribution of assets

Amalgamation of partnership firms

Conversion into a company and Sale to a company

Section 05

Company Accounts

Accounting for employee stock option plan

Buy back of securities

Equity shares with differential rights

Underwriting of shares and debentures

Redemption of debentures

Advanced problems for business acquisition

Amalgamation and reconstruction

Accounting involved in liquidation of companies

Statement of Affairs (including deficiency/surplus

accounts) and Liquidator’s statement of account of

the winding up

Section 06

Performance management

systems, measurements and control

External considerations and behavioral

aspects

Performance management information

systems

Sources of management information/Management

reports

Performance analysis in not-for-profit

organizations and the public sector


Advanced Accounting


119


Section 07

Business and securities

valuation

Valuation techniques

company valuation: general principles

Valuing acquisitions

Valuing debt

Firms with product options

Unquoted companies

Other types of organizations

Section 08

Accountability Creative

accounting

Corporate governance

Ethics

Whistle-blowing

Corporate social reporting

Environmental accounting

Section 09

Accounting policies,

accounting estimates and errors

Accounting policies

Factors that influence management’s choice of

accounting policies

Changes in accounting estimates

Errors

Section 10

Construction contracts

Definition of a construction contract

Accounting for construction contracts

Presentation in financial statements

Section 11

Departmental Accounts

Adv of dept accounting

Methods of Dept Accounts

Allocation of departmental expenses

Technique of dept accounts

Cost based Transfer price

Market based transfer price

Dual Pricing


Advanced Accounting


120


Section 12

Branch Accounting

Branch Vs Dept Accounts

Types of Branches

Dependent branches

Invoice price

Final Accounts System

Independent Branch

Dual Pricing

Abridged Incorporation

Section 13

Royalty Accounting

Minimum Rent

Short/excess working

Ground rent

Recoupment of short working

Lessee books

Landlord books

Section 14

Insurance claims

Types of claims

Loss of stock policy

Loss of profit policy

Accounting books of insured

Section 15

Investment Accounts

Fixed income bearing securities

Variable income bearing securities

Purpose of investment ledger

Purchase/sale of investment

Adjustments

Section 16

Company Final Accounts

Books of accounts kept by company

Statutory books

Statistical books

Annual accounts and balance sheet

Interpretation

Managerial remuneration

Divisible Profits

Sources of dividends


Advanced Accounting


121


P&L Appropriation Accounts

Section 17

Profit & Loss prior to

incorporation

Methods to calculate

Accounting treatment of pre-incorporation P/L

Section 18

Holding Companies

Types of control

Legal definition and requirement

Holding and subsidiary company

Particulars of B/S

Financial Year

Rights of Holding company

Basic rules of preparing accounts

Section 19

Amalgamation

Forms of amalgamation

Motive for amalgamation

Procedures

Accounting for amalgamation

Types of amalgamation

Calc of purchase consideration

Methods of accounting

Inter-company investments

Section 20

Underwriting of shares and

debentures

Sub underwriters

Underwriting commission

Underwriting agreement

Marked and unmarked application

Full and partial underwriting


Advanced Accounting


122


Section 21

Insolvency Accounts

Expressions

When insolvent?

Procedure of Insolvency

Accounting procedures

Deficiency policy

Insolvency of a partnership firm

Section 22

Valuation of Goodwill and

shares

Goodwill

Types of goodwill

Positive and negative goodwill

Accounting for goodwill

Valuation of non purchased goodwill

Asset backing model

Yield valuation model

Section 23

IAS

11, 12, 14, 17,18, 20, 21, 27, 29, 30, 33, 36, 38, 40

Rules for first time adoption of IFRS

Introduction to IFRS 1

Opening IFRS statement of financial position

Exceptions to the retrospective application of other

IFRSs


Connolly / International Financial Accounting

and Reporting 3rd edition / CAI 2012

Advanced Financial Reporting by Derry Cotter

Elliott and Elliott, Financial Accounting and

Reporting, 2011 Prentice Hall (15th edition)

Modern Accountancy by A hanif & Mukherjee

Advanced Accounting by Simons and karrenbrock

4th edition


Advanced Audit


123


Aim

The aim of this course is to

prepare professional students

who can demonstrate the

knowledge; expertise and

professional competency

approach to understand the

nature and diversity of audit

while accomplishing the audit

of an entity and undertaking

assurance engagements. The

ultimate intension of the

course is to evaluate and

conclude on the assurance

engagement and other audit

and assurance issues in the

context of best practice and

current developments in audit spectrum.


Upon successful completion of this course, students

should be able to:

A). Be acquainted with the legal and regulatory

environment and its impact on audit and

assurance practice

B). Explain, interpret and apply the legal,

regulatory and ethical framework to the role

of the auditor

C). Develop audit strategy, plan audit, assess the

risk of misstatement and meet the audit

objectives

D). Assess and recommend appropriate quality

control policies and procedures in practice

management and recognize the auditor’s

position in relation to the acceptance and

retention of professional appointments

E). Gather evidences, using evaluating

techniques and review going concern

assumptions

F). Draw conclusions, having applied

appropriate professional skill, skepticism and

judgment

G). Report to shareholders, management and

other relevant parties while providing audit

and assurance services

H). Conduct audit of Banks, Insurance

companies and non regular audits

I). Understand the current issues and

developments relating to the provision of

audit related and assurance services


Advanced Audit


124


Section 01

Legal and Regulatory

Framework

An in-depth knowledge of the Companies Acts/ laws

legislation affecting the auditor.

An thoroughly knowledge of standards and other

technical pronouncements issued by the IASB

A detailed awareness of case law decisions and their implications for the auditing process.

Compare and contrast the respective responsibilities

of management and auditors concerning

compliance with laws and regulations in an audit of


Auditors’ considerations of compliance/non -

compliance with laws

A deeply knowledge of other legal liabilities affecting

auditors and accountants in providing audit and

assurance services

Section 02

Ethics for CPA’s

Application of the CPA Code of Ethics.

The fundamental principles of professional ethics

Responsibilities to clients and colleagues.

Conflicts of interests.

Code of confidentiality

Professional liability and indemnity

Making ethical judgments

Misconduct and negligence

Identify, evaluate and respond to threats to compliance with the fundamental principles


Advanced Audit


125


Section 03

Practice Management

Principles and purpose of quality control of audit and other assurance engagements

Elements of system of quality control of a firm

quality control procedures

Responsibilities and practices including:

– Changes in professional appointments.

– Use of lien in fee disputes.

– Advertising and publicity.

– Use of professional designations

Reasons why entities change their auditors/professional accountants

Understand the matters to be considered when a firm

is invited to submit a proposal or fee quote for an

audit or other professional engagement

Identify the information to be included in a Proposal

key issues that underlie the agreement of the scope and terms of an engagement with a client

Understand the matters to be considered and the

procedures that an audit firm/professional

accountant should carry out before accepting a

specified new client/engagement

Section 04

Audit strategy, planning and

assessing the risk of misstatement

Planning the flow of audit work

Audit strategy, planning programme and importance

of supervision:

Review of audit notes and working papers

Principal’s ultimate responsibility

Extent of delegation

Materiality and performance materiality

Business Risks, Audit Risks

Risk of material misstatement

use of analytical procedures in the planning

Planning specific to initial audit engagement


Advanced Audit


126


Section 05

Risk Assessment and Audit

Process

New engagements and Risks

The strategic design and planning of an audit and

knowledge of the client’s business

The review of financial statements to include analysis

and critical assessment

Quality control and recording of the audit.

The evaluation and testing of control procedures and

audit evidence.

Consideration of materiality, audit risk, reliance on

other specialists, events after the reporting period,

contingencies, related parties.

Section 06

Evidence

Audit procedures to obtain sufficient audit evidence from identified sources

Identify and evaluate the audit evidence expected

to be available to

i) support the financial statement assertions and

accounting treatments

ii) Support disclosures made in the notes to the


Apply analytical procedures to financial and

non-financial data

Related parties and related party transactions

Reliance on the work of experts

Section 07

Evaluation and Review

Evaluate the matters (e.g. materiality, risk,

relevant accounting standards, audit evidence)

relating to

i) inventory and construction contracts

ii) standard costing systems

iii) statement of cash flows

iv) changes in accounting policy

v) taxation (including deferred tax)

vi) segmental reporting

vii) non-current assets viii) fair values

ix) leases x) revenue recognition

xi) employee benefits xii) government grants

xiii) related parties xiv) earnings per share

xv) impairment

xvi) provisions, contingent liabilities and

contingent assets

xvii) intangible assets xviii) financial instruments

xix) investment properties xx) share-based payment


Advanced Audit


127


transactions

xxi) business combinations

xxii) assets held for sale and discontinued

operations

xxiii) events after the end of the reporting

period

xxiv) the effects of foreign exchange rates

xxv) Borrowing costs.

Analytical procedures in evaluation and review

audit procedures designed to identify subsequent

events that may require adjustment to, or disclosure

in, the financial statements of a given entity

Going Concern assumptions

Assess the adequacy of disclosures in financial

statements relating to going concern and explain the

implications for the auditor’s report with regard to the

going concern basis

Section 08

Special audit techniques

Selective verification

Statistical sampling

Special audit procedures

Physical verification of assets

Direct confirmation of debtors and creditors

Analytical review procedures

Risk-based auditing

Section 09

Reporting

Reporting on Audited Financial Statements.

Key concepts: opinion, true and fair view, materiality, statutory requirements

Basic elements of the Auditor’s Report

Modified Reports, differentiating between

– Matters that do not affect the auditor’s opinion,

and

– Matters that do affect the auditor’s opinion

Circumstances giving rise to

Modified Reports.

– Limitations on scope.


Advanced Audit


128


– Disagreements with management

Auditor’s responsibility before and after the date of

the Auditor’s Report.

Auditor’s responsibility for other information in documents (e.g. Annual Report) containing audited


Section 10

Audit of Consolidated

Financial Statements, Banks, Insurance Companies

Audit Committee and Corporate Governance

Audit Reports and Certificates for Special Purpose engagements

Certificates under the Payment of Bonus Act,

import/export con troll authorities, etc.; Specific services to non-audit clients

Audit of Banks, Transitional Audits

Audit of Insurance Companies

Audit of Cooperative societies and NPO’s

Section 11

Special Audits and Other Assurance engagements

Relevant audit planning, execution

including internal control implications), reporting and

professional practice considerations concerning:

Group audits, small business audits (including

small business exemption), not-for-profit

audits, first time audits.

Prospectuses and other offering documents:

historical year-end financial statements,

interim financial statements, and future

oriented information.

Other types of historical financial assurance

engagements: financial statements review

engagement (Accountant’s Report),

financial statements compilation

engagements (Compilation Report), audit or

review of specific financial information (e.g.

sales figures for retail park leases), compliance with agreements (e.g. loan

covenants), agreed upon procedures.

Section 12

Other Assignments

Audit-related services, Assurance services

‘prospective financial information’ (PFI)

and distinguish between a ‘forecast’, a

‘projection’, a ‘hypothetical illustration’ and a

‘target’.

Principles of useful PFI


Advanced Audit


129


Compare the content of a report on an examination of PFI with reports made in providing audit-related services.

Forensic audits

Outsourcing, Auditing aspects of insolvency

Section 13

Current Issues and Developments

Discuss the relative advantages of an ethical framework and a rulebook

Identify and assess relevant emerging ethical issues and evaluate the safeguards available.

Discuss IFAC and APB developments

Recent trends in IT and their current and potential impact on auditors

How IT may be used to assist auditors and discuss the problems that may be encountered in automating the audit process

Plan an engagement to provide assurance on performance measures and sustainability indicators

Measuring and reporting on economic, environmental and social performance and give examples of performance measures and sustainability indicators.

Substantive procedures to detect potential misstatements in respect of socio environmental

Matters

Reading Material

The Audit Process, Principles, Practice & Cases 5th edition/Gray and Manson

Auditing by Audrey A Gramling, Karala M.Johnstone

IFAC standards volume

Volume 1:

Volume 2:

‘International Standards on Auditing

(UK and International) (ISAs).

International Standards on Assurance Engagements

International Standards on Review Engagements services.

IFRSs

International Standards on Quality Control


Fraud Audit & Forensic Accounting

Level – V: Final – I Code: FP-501

130


Aim

This subject disseminates the

skills in accounting, auditing,

and investigation in the fraud

cases, preparation of

evidences, reports, affidavits,

giving oral evidence and

support in courts, arbitration,

medication as well as fraud

detection and prevention.

The Forensic Accountants are

specialist in conduct of

inquiries, research, law,

quantitative techniques

Financial auditing, accounting and legal agreements.

This course seeks to highlight

the challenges of fraud and its

detection as well prevention

as recognized now-a-days

across the world. The professionals are required to:

Recognize the characteristics

of organizations in which fraud is likely to occur.

Detect and deter accounting

fraud, using the most recently

developed techniques of investigation.

Conduct an efficient and systematic fraud investigation.

Use the latest methods for

documenting fraud and

preparing evidence and much

more to carry out the audit of the organization.


After completing the course the students will be

able

A). To understand the basic and advanced

concepts of fraud audit and forensic

accounting

B). To learn and understand the red flags

associated with the frauds

C). To evaluate and detect frauds and

fraud schemes

D). To learn and apply the fraud detection

strategies and manage the risk to

acceptable level.

E). To manage the risk of fraud and develop

and apply fraud policy

F). Draft and apply the fraud policy and use

advanced fraud analytics tools to

detect, prevent and deterrence fraud.

G). The way the forensic accountants

investigate fraud and perform the

function of expert witness in court of law

H). To determine the difference between

auditor and forensic accountants

I). Prepare reports and presenting to those

who charged with governance

J). Interview and meeting with fraud

persons

K). How to collect and analyze evidence

L). Applying modern fraud analysis tools

and techniques




131


Section 01

Background of Fraud Audit

and Forensic Accounting

The Fraud Cycle

Forensic Accountant and Audits

Forensic Accountants

Fraud Auditors

Section 02

Forensic Accounting

Definition,

Historical basis

Types key areas Forensic Accounting

Qualification of damages, and loss valuations

Professional Negligence fraud investigation and

family law matters

Forensic Accountants capabilities, minute analysis,

Prompt Investigation

Keen Observat8ion

Diplomatic Communication, creativity

Proficient in corporate and law, sixth Sense

photographic memory, professional, Creditability

Section 03

Fraud Principles and Fraud Schemes

What is Fraud?

Fraud Triangle

Scope of Fraud

Fraud Taxonomies

Fraud Tree

Evolution of Typical fraud

ACFE Fraud Tree

Financial Statement Schemes

Corruption schemes

Asset Misappropriation schemes

Section 04

Forensic Accounting & Traditional Auditing

Error identification and prevention

Fraud identification, regulations

Traditional audit report, audit assertion, evidence

gathering procedures

Audit tests and sampling

Forensic science, criminalists




132


Forensic evidence

Expert testimony claim of custody competitive

investigation

Fraud symptoms, Interviews and interrogation,

Techniques,

Financial Statement

Fraud Schemes and Characteristic,

Section 05

Role of Forensic Accountant

and Responsibilities

Accountant’s Role in Perspective

Role of Company Center

Accountants and Auditors

Fraud versus Error

Reasonable Assurance , Materiality

Independence

Objectivity, Skepticism

Integrity and objectivity , Professional Skepticism

Section 06

Fraud Risk Assessment

What is Fraud Risk?

Consideration for Developing an Effective Fraud Risk Assessment

Executing the Fraud Risk Assessment

Assess the likelihood of Occurrence of the Identified

Risks,

Evaluate which people and department are most likely to commit fraud,

Fraud Risk Index, Responding to residual fraud Risks,

Reporting the results of the fraud risk assessment

Risk Assessment and the audit process,

Fraud Risk Assessment Tools

Section 05

Fraud Prevention

Responsibility for fraud prevention,

Implementing a Corporate Compliance Program

Audit Committees, Due diligence in Hiring, ,

Training Employees,

Periodic Assessment,




133


Procedures to prevent fraud,

Fraud Prevention policy, Ethics Program

Section 06

Fraud Detection

Fraud Detection

Lying a Foundation of Detection

Assessing the Risk of Fraud , ,

Fraud Risk Factors

Information Technology

Interpreting Potential Red Flags

Identifying and Evaluating Risk Factors

Information Gathering and Analytic Procedures

Company data, Company Budgets, Forecasts, or projection

Analytic Techniques

Evaluating Controls

Unpredictable Audit Test

Observation and Inspection

Financial Statement Fraud: Detection Techniques

Revenue Recognition

Corruption

Section 07

Investigation

Auditors are not Forensic Accounting Investigators

Auditors are not Authenticators

Auditors have limited Exposure to Fraud

Auditors are not Guarantors

Historically, Audits may have been Predictable,

Potential Trigger Points of Fraud

Reliance on others

Forensic Accounting investigators cooperation

Internal Audit’s Position and Function

Resource Models

Working Together

Forensic Accounting Investigators’ Cooperation




134


Forensic Accounting Investigators objectives

How should the investigation objective be defined

Who should direct the investigation and why

Ready when needed

Where to find skilled Forensic Accounting

Investigators

Internal Audit

Engaging External Forensic Accounting Investigators

Accounting and Auditing Firms

Investigative Process,

Analyzing Documents,

Interview theory and application

Covert examination

, Sources of Information,

Accessing information online,

Data analysis and reporting tools

Section 08

Forensic Techniques

Benefits and Pitfalls

Effective Data Mining

Assessing Data Quality and Format

Data Clearing

Eliminating Duplicate Information

Testing the Data for Completeness and

Accuracy

Skills of the Forensic Technologist

Effective Use of data analysis Results

Data mining in action

Data storing

Choice of tools

Presenting Results

Reviewing the essentials

Fictitious vendors, Altered Invoices, Fixed Bidding,

Goods not received, Duplicate Invoices,




135


Section 09

Evidence created by Forensic

Accountant

What Evidence should be gathered

Practices Act violations

Improper Related-Party activity

Employee Misappropriations

Specific Allegations

Financial Statement Errors

Important Considered regarding documents and

working papers

Section 10

Reporting

Types of Reports

Importance of Adequate Preparation

A pretrial conference of Accounting expectants and

solicitors

Clarification of facts

Agreement on methodologies

Preparation of Joint Statement

List of Agreed issues and disagreement

Joint Statement

Cost Sharing

Standard of Reporting

ACFE standard

The written report of Investigation

Basic Elements to consider for inclusion in a report

Summarizing findings

Affidavits

Giving a Deposition

Mistakes to avoid in reporting

Avoid overstatement

Avoid opinion

Identify control issues separately from investigative

Findings of fact

Use simple, straightforward language focused on the

facts

Avoid subjective comments




136


Section 11

Forensic Analytics

Using Access in Forensic Investigations

Using Excel in Forensic Investigations

Using PowerPoint in Forensic Investigations

High-level data overview tests

Bedford’s Law

Testing the Internal Diagnostics of current period and

prior period data

Identifying Fraud using the largest subsets

Identifying anomalies using the relative size factor

cost

Identifying fraud using abnormal duplications

Identifying fraud using Correlation

Identifying fraud using time series analysis

Section 12

Forensic Accountants As

Expert Witness

WITNESS

Role of Forensic Accountant

Forensic Accountant as an expert witness

Qualification and admissibility of Accounting

Evidence

Expert’s role in the Litigation team

Expert’s role in the Litigation team

Pretestimony activities

Trial and Testimony

Section 13

The Future of Forensic Accounting

Evolving Discipline, New Tools

Education and Training: to be Better Support

Regulation and Enforcement

Changing Corporate Environment

Internal Audit

Corporate Judgment Calls

Forensic Accounting Investigators serving

Individual Corporate Clients

Non Financial Operating Data




137



Forensic Accounting & Fraud Investigation by Howard Silver

Forensic & Investigation Accounting by Larry

Crumhler

Fraud and Forensic Accounting by Jack Bologna

Forensic Analytics by Mark j. Nigrini

Computer Fraud Case Book (The bytes that Bite)

Fraud Case Book Lesson from the Bad Ride of Business


Internal Audit Role in Risk & Control


138


Aim

This subject disseminates the

skills in IT, auditing, and

investigation in the fraud

cases, preparation for audit

activities, internal audit reports,

giving actual risk assessment scenarios

The Internal auditors are

specialist in conducting

internal audit activities,

planning IAA, reporting to audit committee,.

This course seeks to highlight

the challenges of fraud and its

detection as well prevention

as recognized now-a-days

across the world.


After completing the course the students will be

able

A). To understand the basic and advanced

concepts of internal audit

B). To learn and understand the objectivity,

purpose, authority and responsibility

C). To develop skills, knowledge and

competencies to develop

professionalism

D). To establish risk based plan and manage

the risk to acceptable level.

E). To identify internal audit resource

requirement

F). To coordinate with other service

providers

G). To conduct internal audit engagement

H). Prepare reports and presenting to those

who charged with governance

I). To conduct specific engagements

J). How to collect and analyze evidence

K). Applying modern analysis tools and

techniques




139


Section 01

Define purpose, authority, and

responsibility of the internal audit activity

Determine if the purpose, authority, and responsibility of the internal audit activity are clearly documented

and approved

Determine if the purpose, authority, and responsibility

of the internal audit activity are communicated to

the engagement clients

Demonstrate an understanding of the purpose,

authority, and responsibility of the internal audit

activity

Section 02

Maintain independence and

objectivity

Foster independence

Understand organizational independence

Recognize the importance of organizational

independence

Determine if the internal audit activity is

properly aligned to achieve organizational

independence

Foster objectivity

Establish policies to promote objectivity

Assess individual objectivity

Maintain individual objectivity

Recognize and mitigate impairments to

independence and objectivity

Section 03

knowledge, skills, and

competencies

Determine if the required knowledge, skills, and

competencies are available

Understand the knowledge, skills, and competencies that an internal auditor needs to possess

Identify the knowledge, skills, and competencies

required to fulfill the responsibilities of the internal

audit activity

Develop and/or procure necessary knowledge, skills

and competencies collectively required by the

internal audit activity

Exercise due professional care

Section 04

Quality Assurance

Promote quality assurance and improvement of the

internal audit activity

Establish and maintain a quality assurance and improvement program

Monitor the effectiveness of the quality assurance

and improvement program




140


Report the results of the quality assurance and improvement program to the board or other

governing body

Conduct quality assurance procedures and

recommend improvements to the performance of

the internal audit activity

Section 05

Risk-based Plan

Establish a framework for assessing risk

Use the framework to:

Identify sources of potential engagements

(e.g., audit universe, management request,

regulatory mandate)

Assess organization-wide risk

Solicit potential engagement topics from

various sources

Collect and analyze data on proposed

engagements

Rank and validate risk priorities

Coordinate the internal audit activity's efforts with:

External auditor

Regulatory oversight bodies

Other internal assurance functions (e.g., health and

safety department)

Select engagements

Participate in the engagement selection

process

Select engagements

Communicate and obtain approval of the

engagement plan from board

Section 06

IIA & Corporate Governance

Obtain board's approval of audit charter

Communicate plan of engagements

Report significant audit issues

Communicate key performance indicators to board

on a regular basis

Discuss areas of significant risk

Support board in enterprise-wide risk assessment

Review positioning of the internal audit function within

the risk management framework within the

organization,

Monitor compliance with the corporate code of

conduct/business practices




141


Report on the effectiveness of the control framework

Assist board in assessing the independence of the

external auditor

Assess ethical climate of the board

Assess ethical climate of the organization

Assess compliance with policies in specific areas

(e.g., derivatives)

Assess organization's reporting mechanism to the board

Conduct follow-up and report on management response to regulatory body reviews

Conduct follow-up and report on management

response to external audit

Assess the adequacy of the performance measurement system, achievement of corporate

objective

Support a culture of fraud awareness and encourage the reporting of improprieties

Section 05

Plan Engagements

Initiate preliminary communication with engagement

client

Conduct a preliminary survey of the area of

engagement

Obtain input from engagement client

Perform analytical reviews

Perform benchmarking

Conduct interviews

Review prior audit reports and other relevant

documentation

Map processes

Develop checklists

Coordinate with:

External auditor

Regulatory oversight bodies

Establish/refine engagement objectives and

identify/finalize the scope of engagement

Consider the potential for fraud when planning an engagement:

Be knowledgeable of the risk factors and red

flags of fraud

Identify common types of fraud associated

with the engagement area




142


Determine if risk of fraud requires special

consideration when conducting an

engagement

Engagements procedure

Determine the level of staff and resources needed for the engagement

Establish adequate planning and supervision of the

engagement

Prepare engagement work program

Section 06

Conduct Engagements

Research and apply appropriate standards

Maintain an awareness of the potential for fraud

when conducting an engagement

Notice indicators or symptoms of fraud

Design appropriate engagement steps to

address significant risk of fraud

Employ audit tests to detect fraud

Determine if any suspected fraud merits

investigation

Collect data

Evaluate relevancy, sufficiency of data

Analyze and Interpret data

Work papers

Communicate interim progress

Draw conclusions

Develop recommendations

Report agreement results

Conduct client satisfaction survey

Complete performance appraisals of engagement

staff

Section 07

Conduct Specific Engagements

Fraud investigation

Determine appropriate parties to be involved

with the investigation

Establish facts and extent of fraud (e.g.,

interviews, interrogations, and data analysis)

Report outcomes to appropriate parties

Audits of third parties and contract auditing

Quality audit engagements




143


Due diligence audit engagements

Security audit engagements

Privacy audit engagements

Performance (key performance indicators) audit engagements

Operational (efficiency and effectiveness) audit

engagement

Financial audit engagements

Information technology (IT) audit engagements

Compliance audit engagements

Conduct consulting engagements

Internal control training

Business process review

Benchmarking

Information technology (IT) and systems

development

Design of performance measurement

systems

Section 08

Monitor Engagement

Outcomes

Determine appropriate follow-up activity by the internal audit activity

Identify appropriate method to monitor engagement

outcomes

Conduct follow-up activity

Communicate monitoring plan and results

Section 09

Engagement Tools

Sampling (A)

Nonstatistical (judgmental)

Statistical

Statistical analyses (process control techniques)

Data Gathering tools

Analytical review techniques

Observations

Problem solving

Computerized audit tools

Process mapping

Flow charts




144



Internal auditing by Sawyer

The Internal Auditing Handbook by K H Spencer

Brink's Modern Internal Auditing by Robert R Moeller

The Internal Auditing Pocket Guide by J P Russell


Advanced Performance Management


145


Aim


ensure that students have the

necessary expertise and

competence to conduct a

critical, strategic analysis of

unfamiliar business situations.

This includes the ability to

select, integrate and apply the

appropriate techniques and

approaches in order to identify

problems, opportunities and

recommended strategies in

specific situations.

To apply relevant knowledge,


judgment in selecting and

applying strategic

management accounting

techniques in different business

contexts and to contribute to

the evaluation of the

performance of an

organisation and its strategic

development.




A). Select, integrate, and apply strategic

performance management techniques

appropriate to the particular context of

specific business situations described in a

case-study, through the application of critical

strategic thinking, appropriate professional

skepticism and ethical judgment.

B). Justify a portfolio of strategic performance

management techniques selected by

reference to the particular illustrative context

of a case-study situation

C). Assess the likely effects of existing and

proposed strategic performance

management structures on intra

organizational behaviors’, work practices,

and group norms

D). Evaluate the implications for particular

organizations’ strategic performance

management systems of emerging

developments in the fields of information

technology (including e-commerce),

business process re-engineering,

E). Benchmarking, and corporate governance.

F). Use strategic planning and control models

to plan and monitor organizational

performance

G). Assess and identify relevant macroeconomic,

fiscal and market factors and key external

influences on organizational performance

H). Identify and evaluate the design features of

effective performance management

information and monitoring systems

I). Apply appropriate strategic performance

measurement techniques in evaluating and

improving organizational performance

J). Advise clients and senior management on

strategic business performance evaluation

and on recognizing vulnerability to corporate

failure




146


Section 01

Introduction to strategic


Explain the role of strategic performance

management in strategic planning and control.

Discuss the role of corporate planning in clarifying

corporate objectives, making strategic decisions and

checking progress towards the objectives

Compare planning and control between the

strategic and operational levels within a business

entity

Assess the use of strategic management accounting

in the context of multinational companies

Discuss the scope for potential conflict between

strategic business plans and short-term localized

decisions

Evaluate how SWOT analysis may assist in the

performance management process

Evaluate the methods of benchmarking performance

Section 02


and control of the organisation

Evaluate the strengths and weaknesses of alternative

budgeting models and compare such techniques as

fixed and flexible, rolling, activity based, zero based

and incremental.

Assess how budgeting may differ in not-for-profit

organizations from profit-seeking organizations

Evaluate the impact to an organisation of a move

beyond budgeting

Section 03

Changes in business structure

and management accounting

Identify and discuss the particular information needs

of organizations adopting a functional, divisional or

network form and the implications for performance

management

Assess the influence of Business Process

Reengineering on systems development and

improvements in organizational performance

Discuss the concept of business integration and the

linkage between people, operations, strategy and

technology

Analyze the role that performance management

systems play in business integration using models such

as the value chain

Identify and discuss the required changes in

management accounting systems as a consequence

of empowering staff to manage sectors of a business




147


Section 04

Changing business

environment

Assess the continuing effectiveness of traditional

management accounting techniques within a rapidly

changing business environment

Assess the impact of the different risk appetites of

stakeholders on performance management

Evaluate how risk and uncertainty play an important

role in long term strategic planning and decision-

making that relies upon forecasts of exogenous

variables

Apply different risk analysis techniques in assessing

business performance such as maximin, maximax,

minimax regret and expected values

Section 05


information systems

Discuss, with reference to performance

management, ways in which the information

requirements of a management structure are

affected by the features of the structure.

Evaluate the compatibility of the objectives of

management accounting and management

accounting information

Discuss the integration of management accounting

information within an overall information system, for

example the use of enterprise resource planning

systems.

Evaluate whether the management information

systems are lean and value of the information that

they provide

Highlight the ways in which contingent (internal and

external) factors influence management accounting

and its design and use

Section 06

Recording and processing

methods and management

reports

Demonstrate how the type of business entity will

influence the recording and processing methods

Discuss how IT developments e.g. unified corporate

databases, RFIDs and network technology may

influence management accounting systems

Discuss the difficulties associated with recording and

processing data of a qualitative nature

Evaluate the output reports of an information

system in the light of

i) best practice in presentation;




148


ii) the objectives of the report/organisation;

iii_ the needs of the readers of the report; and

iv) avoiding the problem of information

overload

Section 07

Strategic performance

measures in private sector

Demonstrate why the primary objective of financial

performance should be primarily concerned with the

benefits to shareholders.

Justify the crucial objectives of survival and business

growth.

Discuss the appropriateness of, and apply different

measures of performance, including:

i) Return on Capital Employed (ROCE)

ii) Return on Investment (ROI)

iii) Earnings Per Share (EPS)

iv) Earnings Before Interest, Tax,

Depreciation and Amortization (EBITDA)

v) Residual Income (RI)

vi) Net Present value (NPV)

vii) Internal rate of return and modified

internal Rate of Return (IRR, MIRR)

viii) Economic Value Added (EVA TM)

Discuss why indicators of liquidity and gearing need

to considered in conjunction with profitability.

Compare and contrast short and long run financial

performance and the resulting management issues.

Explore the traditional relationship between profits

and share value with the long-term profit

expectations of the stock market and recent financial

performance of new technology companies.

Assess the relative financial performance of the

organisation compared to appropriate benchmarks.

Section 08

Pricing and Product Decisions

Describe, compute and evaluate performance

measures relevant in a divisionalised organisation

structure including ROI, RI and Economic value

added (EVA)

Discuss the need for separate measures in respect of

managerial and divisional performance.

Discuss the circumstances in which a transfer pricing




149


policy may be needed and discuss the necessary

criteria for its design.

Demonstrate and evaluate the use of alternative

bases for transfer pricing

Explain and demonstrate issues that require

consideration when setting transfer prices in

multinational companies

Relevant cash flows and their use in short-term

decisions, typically concerning acceptance/rejection

of contracts, pricing and cost/benefit comparisons

The importance of strategic, intangible and non-

financial judgments in decision-making

Relevant costs and revenues in decision-making and

their relation to accounting concepts

Marginal and full cost recovery as bases for pricing

decisions in the short and long-term

Simple product mix analysis in situations where there

are limitations on product/service demand and one

other production constraint.

Multi-product break-even analysis, including break-

even and profit/volume charts, contribution/sales

ratio, margin of safety etc.

Linear programming for more complex situations

involving multiple constraints. Solution by graphical

methods of two variable problems

Sensitivity analysis of CVP-based decision models.

Pricing decisions for profit maximizing in imperfect

markets.

Pricing strategies and the financial consequences of

market skimming, premium pricing, penetration

pricing, loss leaders, product bundling/optional extras

and product differentiation to appeal to different

market segments.

The allocation of joint costs and decisions concerning

process and product viability based on relevant costs

and revenues.

Section 09

Cost Planning and Analysis for

Competitive Advantage

Value analysis and quality function deployment.

The benefits of just-in-time production, total quality

management and theory of constraints and the

implications of these methods for decision-making in

the ‘new manufacturing environment’.

Kaizen costing, continuous improvement and cost of

quality reporting.

Learning curves and their use in predicting

product/service costs, including derivation of the

learning rate and the learning index.




150


Activity-based management in the analysis of

overhead and its use in improving the efficiency of

repetitive overhead activities.

Target costing.

Life cycle costing and implications for marketing

strategies.

The value chain and supply chain management,

including the trend to outsource manufacturing

operations to transition and developing economies.

The use of direct and activity-based cost methods in

tracing costs to ‘cost objects’, such as customers or

distribution channels, and the comparison of such

costs with appropriate revenues to establish ‘tiered’

contribution levels, as in the activity-based cost

hierarchy

Pareto analysis

Section 10

Performance measurement

and strategic Human Resource

Management issues

Explain how the effective recruitment, management

and motivation of people are necessary for enabling

strategic and operational success

Discuss the judgmental and developmental roles of

assessment and appraisal and their role in improving

business performance.

Advise on the relationship of performance

management to performance measurement

(performance rating) and determine the implications

of performance measurement to quality initiatives

and process redesign

Section 11

Performance measurement

and the reward systems

Explore the meaning and scope of reward systems.

Discuss and evaluate different methods of reward

practices.

Explore the principles and difficulty of aligning reward

practices with strategy.

Advise on the relationship of reward management to

quality initiatives, process redesign and harnessing of

e-business opportunities

Assess the potential beneficial and adverse

consequences of linking reward schemes to

performance measurement, for example, how it can

affect the risk appetite of employees




151


Section 12

Strategic performance issues in

complex business structures

Evaluate the use and the application of strategic

models in assessing the business performance of an

entity, such as Ansoff, Boston Consulting Group and

Porter

Discuss the problems encountered in planning,

controlling and measuring performance levels, e.g.

productivity, profitability, quality and service levels, in

complex business structures

Discuss the impact on performance management of

the use of business models involving strategic

alliances, joint ventures and complex supply chain

structures.

Section 13

Budgeting and Management

Control

The use of budgets in planning: ‘rolling budgets’ for

adaptive planning.

Responsibility accounting and the use of budgets for

control: controllable costs and; treatment of

uncontrollable costs; the conceptual link between

standard costing and budget flexing.

Assessing the financial consequences of projected

performance through key metrics including

profitability, liquidity and asset turnover ratios.

What-if analysis based on alternate projections of

volumes, prices and cost structures and the use of

spreadsheets in facilitating these analyses.

The evaluation of out-turn performance using

variances based on ‘fixed’ and ‘flexed’ budgets.

Behavioural issues in budgeting: participation in

budgeting and its possible beneficial consequences

for ownership and motivation; participation in

budgeting and its possible adverse consequences for

‘budget padding’ and manipulation; setting budget

targets for motivation; implications of setting standard

costs etc.

Non-financial performance indicators.

Criticisms of budgeting and the recommendations of

the advocates of the balanced scorecard and

‘beyond budgeting’




152


Section 14

Control and Performance

Measurement of Responsibility

Centres

Organisation structure and its implications for

responsibility accounting.

Presentation of financial information representing

performance and recognizing issues of

controllable/uncontrollable costs, variable/fixed costs

and tracing revenues and costs to particular cost

objects.

Return on investment and its deficiencies; the

emergence of residual income and economic value

added to address these..

The behavioural consequences of performance

management and control.

The theory of transfer pricing, including perfect,

imperfect and no market for the intermediate good.

Use of negotiated, market, cost-plus and variable

cost based transfer prices. ‘Dual’ transfer prices and

lump sum payments as means of addressing some of

the issues that arise.

The interaction of transfer pricing and tax liabilities in

international operations and implications for currency

management and possible distortion of internal

company operations in order to comply with Tax

Authority directives

Section 15

Current developments in


techniques

Discuss the ways through which management

accounting practitioners are made aware of new

techniques and how they evaluate them

Discuss, evaluate and apply environmental

management accounting using for example lifecycle

costing, input/output analysis and activity-based

costing.

Discuss contemporary issues in performance

management

Assess the changing role of the management

accountant in today’s business environment as

outlined

Discuss how changing organization’s structure,

culture and strategy will influence the adoption of

new performance measurement methods and

techniques.




153



Management Accounting by W. Seal, R. H. Garrison &

E. W. Noreen

Management and Cost Accounting by C. Dury

Management and Costing Accounting by C. T.

Horngren / A. Bhimani, S. M. Datar & G. Foster

W. Seal, R. H. Garrison & E. W. Noreen /

Management Accounting / McGraw-Hill (4th

edition) 2012 / ISBN 9780077129897

C. T. Horngren / A. Bhimani, S. M. Datar & G.

Foster / Management and Costing Accounting /

FT Prentice Hall / 5th edition 2012 / ISBN

9780273757450



Level CPA Final-II Subject Code FP601 Exam

Exam Hours

100 Marks

12

154


Assessment Level:

Advanced/Conceptual/Practical/Expert/Professional/Application

Assessment Strategy:

Please go through the following Guidelines carefully on which the assessment strategy will be based.

Requirements:

This requires using information or concepts in new situations, solving problems, organizing

information and ideas, using old ideas to create new ones, generalizing from given facts, analyzing

relationships, relating knowledge from several areas, drawing conclusions, evaluation worth, etc.

Guidelines:

INTRODUCTION

Research is about discovery, the testing of hypotheses and of ideas. It is about the

establishment of facts through enquiry and exploration. The outcome of research is new

knowledge leading to improved understanding of mechanisms and the development of new

and improved procedures. To ensure that the use of research results is maximised, it must be

disseminated in an appropriate manner. In many senses, the dissemination of the research

results is just as important as the research activity itself.

There are many ways to disseminate research results, and the production of a research

dissertation or thesis is one of them. Although a research dissertation is a usual requirement

for academic degree programmes that include a research element, it is more than an

instrument for student assessment. A common mistake is to regard it as a "beefed-up"

laboratory report. It must be written such that the results presented can be validated and to

form the basis for further investigations. Procedures adopted must be justified; claims and

conclusions must be supported by experiments or reasoned arguments and deductions. A

research dissertation contains elements which distinguishes it from other types of reports, and

because it is the culmination of several months or years of work, the publication can be quite

voluminous. Writing one therefore requires some thought, planning and organisation.

This set of guidelines intends to give some ideas and tips on how to go about writing a

research dissertation. The first thing we will consider is the layout of the dissertation.

(Note: While the subsequent pages are not instructions on how to carry out research, their

contents should also give an idea of what is required in terms of research tasks and how

research should be approached.)




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STRUCTURE

Structure, as opposed to layout, refers to the organisation of the chapters or sections

that make up the dissertaion. Unlike layout, which is usually dictated by Institutional

requirments, strictly speaking, there are no fixed rules governing the structure of a

research dissertation. However, it is generally accepted that a dissertation should have the following chapters:

Title page

where you enter the full title, and the sub-title if any, of the research work; the

name of the author; a statement about the degree programme under which the

dissertation is submitted; the date of submission.

Abstract which is usually a one page summary of the objectives of the research; the

methodology used and the main findings of the work

Contents list which lists the chapter and section headings with their corresponding page

numbers

List of tables, diagrams and illustrations

which list the figure and table numbers, together with captions and their

corresponding page numbers

Nomenclature list which provides a list of nomenclature and definitions of acronyms used in the

dissertation. Make sure that the coressponding units, if applicable, are included.

It is good practice to have a different section for nomenclature involving Greek

symbols as might be encountered in equations and one for acroynms.

Acknowledgements

if any are due, but it is nice gesture to acknowledge the contributions and help of

sponsors and friends

Main text divided into chapters, with appropriate chapter headings, to include

o a chapter to introduce the research; the motivation and the objectives;

and to provide an overview of the dissertation

o a chapter reviewing the work that has done in the area

o a chapter or two to describe in detail the methodology adopted or

proposed

o a chapter or two presenting the main results of the work

o a concluding chapter that summarises the main findings of the research;

statements about the main contributions of the research and

recommendations for future work

References

lists the references that have been cited in the dissertation

Appendices

contain those parts of dissertation that are either well known or does not

contribute directly to the main text, but needs to be included for completeness.

Examples are sample calculations; derivation of a published result which forms the basis for the work; background information.

(Note: the Bristish Standards Institute had guidelines for the production of dissertations: BS 4821:1990, but this has since been withdrawn)




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Tips

Spend some time planning the structure of your dissertation

before starting to write. Not only will this save time and effort in the

long run, it will reduce duplicate text and the dissertation will be more

compact and readable.

o Think about the objectives of the project; what you did and the

results that you obtained.

o Divide the contents into the appropriate chapters and sections;

this will help you rationalise the contents

o Seek the advice of your project supervisor

Try to get a copy of a thesis or dissertation written by a student

in your department to gain a visual feel for how the dissertation is

organised, formatting conventions, and to get an idea of what material

should be placed in which chapters.

Use a new page to start each distinct part of the dissertation

(such as those above).

Do not include blank pages. They do not contribute to the

dissertation, and worse, they can cause confusion for the reader.

Common questions on encountering a blank page are:

o "Has the author forgotten to include something?"

o "Has the photocopier missed a page?"

Write the Abstract and Introduction chapter last - once you have

written the other main chapters, it is easier to summarise the work done, and to give an overview of the dissertation.

With a plan for the structure, you can start the important task of writing the dissertation,

keeping in mind that the various parts of the publication must be linked together in a

coherent manner. This aspect, loosely termed content flow, is covered next.




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FLOW OF CONTENTS

Writing a research dissertation or thesis is like writing a novel. It is a novel that begins

with a story about the background to the research; describing the methods used to

establish facts or test hypotheses and ideas; the results that were observed; and the

conclusions that are drawn. Like the good novel that compels you to read it from cover

to cover, a dissertation should be written so that it can be read at a refreshing tempo,

engaging the reader's undivided attention. To accomplish this, organise the contents of

the dissertation so that they "flow" smoothly from one aspect to the next, and take

particular care in sentence construction.

Tips

One of the techniques to achieve smooth flow of contents is to

maintain a thread between adjoining chapters; ensure that each

section within a chapter lead on to the subsequent section; and

paragraphs of sections are connected to each other. A common

practice is to use "joining" words or sentences, particularly at the end

and beginning of each chapter. A joining sentence at the end of a

chapter tells the reader what to expect, while one at the beginning of a

chapter reminds the reader of the contents of the previous chapter.

Flow and readability are sometimes used interchangeably, but while

smooth flowing content is readable, readability does not necessarily

mean that the contents are threaded.

Flow is interrupted when the reader pauses to ponder the material.

This typically occurs in sections discussing new concepts, and when

making statements based on interpreted results. Where such areas of

the text are identified, pay extra attention to the phrasing of the

content and be conscientious in providing clear explanations. When

making calculations, define all the variables (include units where

applicable) and justify all simplifying assumptions. You should also be

fastidious in describing experimental, simulation and test conditions.

Do not presume that the reader knows what you are trying to do or are

familiar with the techniques that you are employing.

Material that do not contribute directly to the discussion; argument; or

development of a theme or idea, also interrupts flow. Such material

should be excluded. If, for the sake of completeness, you wish to

include them, place them in an Appendix and refer to them in the main

text.

Avoid one sentence paragraphs. Too many and a page will be filled with

numerous gaps, imparting a feeling of discontinuity with the content.

Similarly, avoid long sentences. Long sentences are difficult to read,

and can obscure an otherwise simple explanation. Try to keep sentence

length to less than two lines, and at the same time, make appropriate

use of punctuation. Punctuation break a sentence into readable chunks,

reduce ambiguity and, if used wisely, can for increase effect and

emphasis. A word of warning though - do not apply punctuation at

random as they can change the meaning of a sentence.




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The repeated use of words can make a dissertation difficult, if not

boring, to read. Use a thesaurus to get synonyms to introduce variety,

but make sure that they are used in the proper context. Do not employ

bombastic words to show how clever you are with the language.

Explanations using commonly encoutered words are more effective

than pompous soundling but rarely used vocabulary.

Presentation also plays an important part in giving the impression of

smooth flowing content. The font size should not be too small, and the

line-spacing should be wide enough. Choose 12-point for Serif fonts

(e.g. Times-Roman, Bookman) and 10-point for Sans-serif fonts (e.g.

Arial, Helvetica, Verdana, Tahoma). A 1.5 line spacing for both font

types should ensure that the lines are sufficiently far apart to enhance

reading comfort.

Writing in the "active voice" improves the reading pace, and hence

flow. Take for example, the following two sentences:

Advanced control improves plant profitability. (active sentence)

Plant profitability is improved by advanced control. (passive

sentence)

Although both sentences convey the same message, the first is more

authoritative and positive. In the active sentence, the emphasis is on

"Advanced control" while the passive sentence emphasises "Plant

profitability". Moreover, the passive sentence expresses the same

information in a round-about way. Passive expressions have their uses though. As another example:

Excessive drinking can cause dementia. (active sentence)

Dementia can be caused by excessive drinking. (passive sentence)

When you do not have strong evidence to support a statement, express it in

the passive voice as the tone is less assertive. This is a "trick" adopted usually

to avoid getting into sticky arguments with assessors.

Now that you have an idea of how to improve the flow of contents in a dissertation, the

next thing to consider is the content of key chapters.




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CONTENTS OF KEY CHAPTERS

As mentioned in the discussion on "structure", there are certain chapters which are common to all dissertations and theses contain, namely:

the Abstract

the Introduction

the Literature Review

the Conclusions and Recommendations for Future Work

These are important components, each fulfilling a distinct role. Click on the above links

to find out more.

THE "ABSTRACT"

The Abstract provides the reader with a summary of the contents of the dissertation. It

should therefore be brief but contain sufficient detail, telling the reader the motivation

for the work; project objectives; techniques employed; main results and conclusions. Abstracts should not normally exceed a page and should be self-contained.

The Abstract is the "gateway" to the contents of the dissertation, and therefore it is

important that the Abstract gives the reader a good initial impression. Try to write

Asbstract with a "punchy" style.

Tip

Write the Abstract last. The dissertation will be easier to summarise once all

the bits are in place.

THE "INTRODUCTION"

The first chapter of a dissertation is normally given the title Introduction, and it serves many purposes. It is the place where you should

discuss the motivation for the work that is being reported

state and define the problem that the dissertation is trying to address or solve

state the aims and objectives of the work

give an indication of how the work will be progressed

provide a brief overview of each of the main chapters that the reader will encounter

When writing the motivation for the research work that has been carried out, do not go

into the details. Leave this for later chapters. Give a brief overview of the problem that

you are tackling, and be specific about what the work is trying to achieve, and what you

will be doing to meet these objectives. From an assessment point of view, one of the

measures of success is whether the objectives listed in this chapter have been achieved.

While a research project may start off with a set of objectives, it is often the case that

these will change as the project evolves. Such is the nature of research. You should take this into consideration when stating the objectives of the project.




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Like the Abstract, the Introduction should be written to engage the interest of the

reader. It should also give the reader an idea of how the dissertation is structured, and in doing so, define the thread of the contents.

Tip

Leave the Introduction chapter as one of the last to write. By then, the

structure of the dissertation would be fixed, making it easier to give the

overview of the chapters and what they contain. Also, based on the results

that have been included, you would have an idea of what the "real"

contributions of the dissertation are, enabling you to state the objectives

accordingly.

THE "LITERATURE REVIEW"

There are many titles for this chapter, e.g. "Literature Survey"; "Previous Work", and other similar phrases. The Literature Review is there for you to:

provide details about the motivation for the project

state why the problem addressed by the dissertation is important

set the scene for the work described in the dissertation

describe what others have done and hence sets a benchmark for the current

project

jusify the use of specific solution techniques or problem solving procedures in your work

It is called the Literature Review because the contents of this chapter are based on

published material. A thorough literature review is essential because it shows that you

have studied rigorously what others have done. This lends credibility when you state the

problem the dissertation is addressing, and when you provide reasons as to why

obtaining a solution is important. Where applicable, you should also include a critique of

the available solutions to the problem that your are tackling. This would implicitly

provide justifications for the project and, at the same time, establish benchmarks

against which your contributions can be assessed. Therefore, make sure that you seek

out the most recent information relating to your field of study. You may, if you wish,

include a discussion about your approach to the problem, and which of the published

work will form the basis of your investigations.

The Literature Review is obviously a very important chapter. However, students doing

research for the first time often find it difficult to write. There are a number of reasons for this:

they do not know where to look for information

there may be a huge amount of published work on the subject area, dating back

many years, and they find it difficult to judge which material is relevant

the work is a "hot-topic" and keeping track of the state-of-the-art is difficult

they find it difficult to summarise the ideas and results of numerous publications into a coherent single account

Unfortunately, much of these skills can be gained only through experience. The following

tips will, hopefully, make life that much easier.




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Tips

Most libraries have personnel who specialise in certain disciplines. Ask them for

information about publications relevant to your field of study, whether they are held in stock and where they are located in the library.

Nowadays, an increasing number of journals are available on-line, accessed via web browsers. Many libraries subscribe to these electronic journals, meaning that you can read, download or print articles from the comfort of your computer workstation. Even if your library does not have a subscription to a particular journal, you should still be able

to read the abstract. If the article looks interesting and relevant, you could order a copy. Again, approach your librarian for advice (and your supervisor or advisor for finance).

Students at Newcastle will find the following links useful:

o An Introductory Guide to the Robinson Library is a slide show that tells you all you need to know about the Library and the facilities it offers.

o All about Searching for

Information

o Library News - news of things that are happening at the Robinson Library

o Find that book using the web-based catalogue

o Go straight to the database section to do your literature search

o Peruse the electronic journals

o Brief list of resources for Chemical Engineering and related areas like

water, and Environmental Engineering

Make it a point to keep abreast of developments in your field of study by making regular visits to the library and to the electronic journals websites.

When reading a technical paper, jot down the key points and make a note of the journal or technical publication where the paper was published. Devise a cataloguing system that will allow you to retrieve the paper quickly. This will come in handy when you write the Literature Survey, and when you compile the reference list.

When writing the Literature Review

o include only those work that is relevant to your research. You may have

read dozens upon dozens of papers, but there will be some that do not contribute to the points that your are trying to make, or there will be papers that give identical information. Because of the time you spent trying to understand them, you may be tempted incorporate all that you have read. Attempting to do this will make what is already a difficult task impossible.

o make sure that you have read and understood cited work, otherwise you can get into hot water. Assessors like to ask questions like: "So tell me what you understand about the proposal by Smith and Wesson 1945)".

o organise your content according to ideas instead of individual publications. This helps ensure the smooth flow of contents and make the chapter more readable. It also shows that you have an appreciation of the subject area.

o do not simply quote or paraphrase the contents of published articles.

You should try to weave the information into focussed views, incorporating where possible, your own opinions and comments. This will demonstrate your deeper understanding of the topic.




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THE "CONCLUSIONS AND RECOMMENDATIONS FOR FURTHER WORK"

After reading your Abstract and Introduction, most assessors will make a beeline for the

Conclusions and Recommendations for Further Work (or similarly titled) chapter.There

are three distinct parts to this, the last of the main chapters, and arguably the most

important of the lot. It is here where you wrap up the dissertation by providing:

a summary of the main findings of the dissertation

a list of the contributions of the work directions for further research

The assesors would want to know whether the project objectives been achieved and

whether the work has contributed to knowledge - two of the most important criteria in

judging the research work. Therefore, when compiling this chapter, you should focus on answering these questions.

Any conclusions drawn should be those resulting from your work. You may make

references to the relevant chapters that support the listed finding. You may also refer to

the work of others for comparison purposes. However, you should not be discussing your

results here. All statements should be concise, and should be written to lead on to the

contributions that you have made. One way to present the conclusions is to use one paragraph for each conclusion. Alternatively, use a point-by-point format.

When writing the dissertation, you should be aware of the worth and relevance of your

work in relation to the current state-of-the-art (another reason for a rigorous Literature

Review). Probably the best way to present this information is in point form. You should

not be emabarassed about stating what your contributions are to the field of study.

However, be realistic and do exercise restraint: your claims must be backed up by the

results of your work, otherwise you might "hammered" by the assessors.

The Recommendations for Further Research section is also important. Research often

exposes further problems and introduces more questions. As a student, there is a time

limit to your research project, so it is unlikely that your work would have solved all the

problems associated with the area of study. Therefore, you will be expected to make

suggestions about how your work can be improved and, based on the your findings,

whether there are areas that deserve further investigation. What you write in this section

will show whether you have a firm appreciation of your work, and whether you have

given sufficient thought to its implications, not only within the narrow confines of the

research topic, but to related fields. These reflect your ability for original thought, and

your potential to carry out original research; key issues in a research degree. In the case

of a PhD thesis especially, where you are expected to be the expert, it would be more

than embarassing if an assessor can make more suggestions about how your work can be progressed.


http://lorien.ncl.ac.uk/ming/Dept/tips/writing/thesis/thesis-review.htm

http://lorien.ncl.ac.uk/ming/Dept/tips/writing/thesis/thesis-review.htm



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Tips

As with the Introduction, this chapter should be written using a punchy

style and should not be too long. Present your conclusions and contributions concisely and factually.

Is that it then? Afraid not. There are details such as citation styles; styles for numbering

of chapters, figures and tables; how results should be presented and analysed, and so

on. The following pages will cover each of these in turn.

CITATION STYLES

One of the things that confound first-time writers of research papers and dissertations is how to cite references. The two most common methods for citing published work:

the number system the name-year system

You should be consistent and stick to one of these citation styles. The system you use

will also determine how you compile and present the Reference list. Which one you use

will depend on institutional guidelines or regulations.

The Number System

With this system, references to published work is via the use of numbers, e.g.

There are many undergraduate texts on Process Control [1-4]. The most popular seems

to be the book by Luyben [2]. However, the only one to deal with process design and process control in an integrated manner is that by Marlin [4].

or

There are many undergraduate texts on Process Control 1-4. The most popular seems to

be the book by Luyben 2. However, the only one to deal with process design and process control in an integrated manner is that by Marlin 4.

In both examples above, three citations were made. The first referred to publication

number 1, 2, 3 and 4; the second citation referred to publication number 2; while the

last citation referred to publication number 4. The fact that the numbers relate to items

in the reference list is indicated by the square parentheses [...] or by the superscripts.

Again, which convention you follow will depend on the guidelines and regulations of your

institution.


http://lorien.ncl.ac.uk/ming/Dept/tips/writing/thesis/thesis-cite.htm



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When using the number-system citation style, the order of the corresponding reference

list is important. By convention, the first cited publication will be the first on the list and

assigned the number "1". The second cited publication will be the second on the list and

assigned the number "2" and so on. That is, the publications in the reference list is

presented in the order that they were cited. However, the reference list must not

contain duplicates. This means that you will have to keep track of the publications that

you have cited and their associated order in the reference list, so that you use the

appropriate number when you cite a publication more than once, as in the above examples.

Tips

If all you are told is that you should use the number-system, you

should choose the one that is easiest to type and correct. Using

square-parentheses is probably easier, as you do not have to mess

about with subscripts.

Compile the reference list as you write your chapters, keeping it open

in the word processor but in a separate file. Add new cited pulications

to the list as you work, and refer to it for the number to use with

publications that have been cited.

Check for duplicates whenever you add publications to the reference

list. Making corrections to citations when duplicates are discovered later is a most painful and frustrating process.

The Name-Year System

Using the name-year citation style, the above example becomes:

There are many undergraduate texts on Process Control (Coughanowr, 1991; Luyben,

1990; Marlin, 1995; Shinskey, 1988). The most popular seems to be the book by Luyben

(1990). However, the only one to deal with process design and process control in an integrated manner is that by Marlin (1995).

The first citation named 4 authors using their surname (last name). Associated with each

surname, is the year of the publication. Notice that they are presented in alphabetical

order, within round parantheses, (...). The author part is separated from the year part

by commas, ','. Author-year pairs are separated by semi-colons ';'. The next two

citations named the authors using their surnames with the year of the cited publications

enclosed in parentheses. Therefore, there are two ways to use the "name-year citation

style. When using this citation style, the reference list is presented in alphabetical order.

How a publication is cited also depends on the number of authors. If there are two authors, then cite as follows:

Clarke and Gawthrop (1979) modified the Minimum Variance objective function to include ...




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or

The Generalised Minimum Variance self-tuning algorithm was proposed in the late 1970s (Clarke and Gawthrop, 1979).

When a publication has more than two authors, cite as follows:

Montague and co-workers (1987) considered ...

or

There are many variations to the algorithm (e.g. Cox, 1991; Willis and colleagues, 1990).

You can use the phrases "co-workers" and "colleagues" interchangeably. You can also

use "et. al.", the short form for the Latin phrase "et alii", which means "and others". The

preceding two forms are preferred as they tend to cause less disruption to the flow of

the sentence. Also, since "et. al." is Latin, it should be in italics - unnecessary work.

Tips

If you are not restricted to a particular citation style, use the name-

year system. Most word processors have a "sort" tool, making the

reference list easy to maintain. Duplicated items are easily detected,

and there is no need to make corrections to citations when duplicates

are discovered.

Compile the reference list as you write your chapters, keeping it open

in the word processor but in a separate file. Add new cited pulications

to the list as you work. Check for duplicates by sorting the reference list alphabetically.

Now let us move on to the presentation of the reference list.




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THE REFERENCE LIST

As mentioned previously, how the Reference list is compiled and presented depends on

the citation style that you use. If you use the number system, then the references are

listed in the order that they have been cited. On the other hand, if you cite publications

using the name-year system, the references should be listed alphabetically. Whichever

citation system you use, you have to stick to one convention, otherwise the inconsistency will confuse the reader.

The Reference list is related closely to the Literature Review chapter and is therefore also

quite an important part of your dissertation. Examiners have been known to scrutinise

the list to find out if it contains the most relevant and important publications. It is also a

good idea to include the publications of your examiners, if you know beforehand who

they are especially if they are working in the same research area. However, do not go

overboard and try to impress by including all sorts references. This can be counter-

productive. List only those publications you have cited. If you have read other supporting

articles that have helped in the research, but have not cited them in the dissertation,

place them in a separate "Bibliography" section. The publications in both Reference and Bibliography lists are presented in the same manner.

There are a number of types of publications, and they can be broadly classified as

follows:

articles published in journals

conference proceedings

books

dissertations; theses and research reports

company reports and manuals

information from the world-wide-web personal communications

Each category requires a different presentation. Let us consider each type in turn:

Journal Articles

These are the most common sources of cited material, and include specialist technical

journals as well as trade journals. Use the following format to present articles from technical journals:

Author(s), (year). Article title, Name of journal, Volume Number, Issue Number, page range.

For example:

Chidambaram, M. and Malleswararao, Y. (1992). Model reference control of nonlinear

systems with relative rrder two: application to a semibatch reactor, Journal Proc. Cont.,

2, 1, pp 9-15.

McLellan, P.J. (1994). A differential-algebraic perspective on nonlinear controller design

methodologies, Chem. Eng. Sci., 49, 10, pp 1663-1679




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Instead of issue numbers, some journals have a month of issue. In such cases, substitute the month for the issue number.

The author(s) surname appears first, followed by initials. The year is enclosed in

parenthese and terminated with a full-stop. The first letter of the title is capitalised while

the rest are in lower case. You may use an abbreviated form for the journal name, but

make sure that it is the recognised one. Most journals will have the "official" abbreviated title printed at the top of its pages.

Conference Proceedings

Papers presented at conferences are also common sources of research information. Use the format below when listing them:

Author(s), (year). Article title, Name of conference, Location of conference, page range.

For example:

Dore S.D., Perkins, J.D. and Kershenbaum, L.S. (1994). Application of geometric

nonlinear control in the process industries - a case study, Proc. IFAC Symposium, ADCHEM '94, Kyoto, Japan, pp 501-506.

Again, the author(s) surname appears first, followed by initials. The year is enclosed in

parenthese and terminated with a full-stop. The first letter of the title is capitalised while

the rest are in lower case. You may use an abbreviations to indicate the type of

publication and the name of the conference. For example "Proc." is usually used in place

of "Proceedings"; "Pre." for "Preprints"; "Conf." for "Conference"; "Symp." for

"Symposium" and so on.

Books

To list books, use the following format:

Author(s), (year). Title of book in italics. Edition number, Name of publisher, place of publication.

For example:

Rawlings, J.O. (1988). Applied Regression Analysis: a research tool. Wadsworth and

Brooks, California.

Turk, C. and Kirkman, J. (1996). Effective Writing - improving scientific, technical and business communication. 2nd Edition, E & FN SPON, London.

The format for author(s) is identical to the above, but the the first letter of key words in

the main title are in capitals, and the title is in italics. There is not need to indicate the edition of the book if it is the first edition.




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Some books are compilations of articles from different authors. For such cases, the format used is a cross between that for journal articles and books,

Author(s), (year). Title of article in book, In: Name of book, Edition number, Chapter number, Name(s) of editors, Name of publisher, place of publication.

For example:

Rumelhart D.E., Hinton G.E. and Williams, R.J. (1987). Learning internal representations

by error propagation, In: Parallel Distributed Processing: Vol. 1, Ch. 8, D.E. Rumelhart

and J.L. McClelland [editors], MIT Press, Cambridge MA.

Note the use of the word "In:" and the difference in which the names of the authors and

the names of the editors are presented: editors' names are listed with their initials first.

However, when you list the book withour reference to authors of particular chapters, editors are considered the authors, in which case the item will be listed as:

Rumelhart, D.E. and McClelland, J.L. [editors], (1987). Parallel Distributed Processing:

Vol. 1, MIT Press, Cambridge MA.

Dissertations; Theses and Research Reports

Dissertations, theses and academic research reports are listed using the format below:

Author(s), (year). Title in italics. Type of publication, Research Group, Name of institution, Country.

For example:

Peel, C. (1995). Aspects of Neural Networks for Modelling and Control. PhD Thesis,

University of Newcastle-upon-Tyne, UK.

Bloggs, J. and Other, A.N. (1998). The Effects of Vodbull on Class Attendance. Research

Report No. 123, Social Impact Research Group, Smirnoff Institute of Technology, Vladistock, Russia.

When listing a research report, include the report number where applicable.

Company Reports and Manuals

Sometimes, you may need to cite material contained in publications by companies and

from manuals. In such cases, there are no named individuals for authors. Use the format below:

Name of company or organisation, (year). Title in italics. Place of publication.




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For example:

Mathsoft Inc., (1999). Mathcad 2000 Reference Manual. Cambridge, MA.

Information from the WWW

Nowadays, much information can be obtained from the internet, typically websites but

sources include newsgroups and on-line forums. The format to use for such publications

is:

Name of Author(s) or company or organisation, (year), Title of article, URL, date found.

The URL (Uniform Resource Locator) is the full internet address of the article. Due to the

transient nature of on-line information, it is important to include the date when you found the information. For example:

Tham, M.T., (1997). Distillation: an introduction, http://lorien.ncl.ac.uk/ming/distil/distil0.htm, 30 May 2001.

Personal Communications

Sometimes, you may have used information passed on to you by a colleague or another

person, via a phone conversation; letter; email or other forms of communication. You

can, and should, include these in the reference list. The format to use is:

Name, (year). Personal communication, Affiliation of named person.

For example:

Blogg, J. (1996). Personal communication, University College London, UK.

That is about all, where the format for listing publications in the Reference list is

concerned. You should be aware that the material presented here is not exhaustive;

there are many variations. However, in the absence of other instructions, and as long as you are consistent, the guidelines presented above should be sufficient.

Tips

Include only those publications that you have cited.

If you use the number system, then the references are listed in the

order that they have been cited. On the other hand, if you cite

publications using the name-year system, the references should be

listed alphabetically.

Check the guidelines or regulations for your institution.

Be consistent in the presentation format for the various types of

publications.

Compile the reference list as you write the chapters of your dissertation




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NUMBERING AND CAPTIONS

Now let us get to the details about the format to use to number

chapters and sections in chapters

figures and diagrams

tables and lists equations

how to refer to them in the text, and the format for figure and table captions.

Chapters and Sections in Chapters

Each chapter of the dissertation should be assigned a number. For example, the first chapter,

Chapter 1. INTRODUCTION

or the literature review chapter,

Chapter 2. LITERATURE REVIEW

Chapter sections and subsections should also be assigned a numerical index. For example, the first section of Chapter 1 could be:

1.1 Statement of the Problem

while a subsection of Section 4 in Chapter 4 could be:

4.2.1 Simulation results

Notice the use of different cases in the 3 heading categories. The title of chapter is in

upper case (capitalised); the heading of a section has the first letter of key words in

upper case; while only the first letter of the first word in a subsection is capitalised.

These styles are used as visual cues to indicate the different levels of headings. Avoid

having more than 3 levels, e.g. 2.1.3.2, as they can make the text messy especially

when referring to them. If you need to categorise further, the contents of a subsection, use a different font style. Bold and underlined text is a popular format.

To refer to a particular chapter, use the formats given by the following examples:

Chapter 2 provides a review of work in this area.

The reason for this modification, stated in Chapter 3, ....

Notice that the word "Chapter" is written in full with a capital "C".

The following examples show how references are made to sections or subsections:




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The procedure outlined in Section 5.3 was employed to ...

Section 3.2.2 discussed the implication of ...

Here, the word "Section" with a capital "S" is used to refer to both sections and subsections; the latter being obvious from the numerical index.

When you compile the table of contents, include all heading levels and their titles. This is

another reason not to have more than 3 heading levels - the contents list becomes overly complex.

Figures and Diagrams

All figures and diagarms must be captioned and given a numerical index. Captions

should appear below the figure or diagram, and should be sufficiently descriptive without

being too long. Simply state what the illustration is showing and do any explaining in the

main text. Captions for figures and diagrams have the format:

Figure Chapter number.Figure number. Description.

The word "Figure" is used generically to cover all illustrations, e.g. drawings, flow charts,

sketches, etc. Spell out the word in full. Note too, the positions of the full-stops. The

numerical index is composed of the chapter number, a full-stop, followed by the figure

number, terminated with another full stop. Thus, the third illustration appearing in

Chapter 4 would have the caption:

Figure 4.3. Schematic of control system for the methanol-water column.

You may use the abbreviated form, "Fig.", when referring to illustrations if the reference appears in the middled of a sentence. For example:

The control scheme, shown in Fig. 4.3, is quite common.

Otherwise, write the word "Figure" in full, e.g.

Figure 4.3 shows a common control scheme for a distillation column.

Tables and Lists

All tables and lists, must be captioned and given a numerical index, and the numbering

style is identical to that used for figures and diagrams. Lists would include snippets of

computer code; step-by-step instructions or procedures. The captions should be placed

below each table and list. So, for example, the second table in Chapter 3 would have the caption:

Table 3.2. Performance measures obtained using the proposed procedure.

Abbreviations should not be used when referring to tables and lists - write out the word

"Table" in full, with a capital "T".




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Equations

"Equations" is used to mean mathematical as well as chemical expressions. Each major

equation should be assigned a numerical index, with the following format: (Chapter number.Equation number). The following shows equation number 6 in Chapter 4.

A = 2B + C (4.6)

Use the following rules when referring to equations.

When a sentence starts with the word "Equation", write it out in full followed by

the numerical index

Otherwise use either the abbreviation "Eq." or "Eqn.", making sure that you

maintain consistency throughout the dissertation. When referring to a collection of equations, use the corresponding plural forms, i.e. "Eqs." or "Eqns."

For example:

Equation (5.1) shows the effect of ...

Substituting Eq.(3.3) into Eq.(3.7) yields ...

The process model, given by Eqs.(4.4) to (4.10), ...

When referring to equations in text contained within parentheses, you need not enclose the equation's numerical index within parentheses. For example:

The process model, (Eqs. 4.4 to 4.10), ...

is much neater than:

The process model, (Eqs.(4.4) to (4.10)), ...

In Summary ...

Again, you should check your institution's guidelines and regulations concerning the

presentation and layout styles for dissertations and theses. Where numbering and caption styles are concerned, the key thing to remember is to be consistent.

Tips

Some word-processors have a tool to keep track of figure and table

captions as well as equation numbers. If present, the tool can also

generate lists which you can use in the sections following the Table of

Contents [see Structure]. Learn to use this well as it can save you a

lot of time and effort.

If the word-processor you are using does not have this capability, you

should maintain the lists as you write.




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FINAL REMARKS

The dissertation is a testament to your research efforts. In research degree

programmes, it is the only tangible output upon which you will be assessed, and in most

cases, the dissertation is probably your first major publication. To ensure that you do justice to yourself and your work,

plan the structure well

be consistent in the format, layout and presentation

maintain threads between all parts of the dissertation

justify all assumptions and define all symbols and acronyms - never expect the

reader to "read between the lines"

be aware of important milestones and achievements in your field of research, and

keep up to date with developments

try as much as possible to write in the active voice and be authoritative

use clear and simple language to explain concepts and present arguments - keep

sentences reasonably short and do not try to impress by using bombastic words

use a spell checker but be aware of its limitations

be critical when analysing results and be objective when making comparisons

be aware of your contributions and the impact that your work has in your research field

Writing a dissertation is a substantial undertaking. This series of pages has hopefully

made the task less stressful and bewildering. Bearing in mind that different institutions

may have dissimilar requirements, you should consult your project supervisor or thesis advisor for more specific guidance.

Remember - to be able to finish a dissertation, you must start writing it. Good luck!

RESOURCES AND TOOLS

Writing Skills Resources on the WWW

A collection of links to Writing Skills resources

Books

Kirkman, J. (1996). Good Style - writing for science and technology. E & FN SPON, London.

Turk, C. and Kirkman, J. (1996). Effective Writing - improving scientific, technical and business communication. 2nd Edition, E & FN SPON, London.

Tools

WordWeb is a standalone Thesaurus and Dictionary which is available for free at http://www.wordweb.co.uk
