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Paper 5: Cost and Management Accounting (One Paper: 3 hours: 100 marks)
- Basics of cost and management accounting: Evolution of cost accounting and management accounting, cost concepts and cost object, cost classification, cost organisation and its relationship with other departments. Elements of cost and cost determination: Material cost – purchase procedure, store keeping and stock control, pricing issue of material and accounting thereof, perpetual inventory and physical stock taking, identification of slow, non-moving and fast moving items, ABC analysis, JIT system, level of inventories and economic order quantity, analysis, investigation and corrective steps for treatment of stock discrepancies – control through other means.
Labour costs — remuneration methods, monetary and non-monetary incentive schemes, payroll procedures, labour analysis and idle time, measurement of labour efficiency and productivity, analysis of non-productive time and its cost, labour turnover and remedial measures, treatment of idle time and overtime.
Direct expenses — nature, collection, classification and treatment of direct expenses
- Overheads — nature, collection and classification.
Production overheads — collection, apportionment, absorption, use of predetermined recovery rates, treatment of under and over absorption, fixed, variable and semi variable overhead, report for control of overhead cost.
Administration, selling and distribution overheads — analysis, accounting and control, treatment of miscellaneous items in cost accounting.
Preparation of Cost Sheet
- Methods of costing
Specific order costing — job, batch and contract, determination of cost accounting in job, batch and contract, valuation of work-in-progress in job costing, features of contract costing, certification of work done, profit on incomplete contracts, cost plus contracts.
Process costing — treatment of normal and abnormal losses and gains, valuation of work-in-progress using first-in – first-out and average methods (equivalent production), inter-process transfer and pricing, concepts and accounting for joint products, by-products, waste, scrap, spoilage and defectives, research and development expenses.
Service or operating costing — unit costing and multiple costing, application, identification of cost unit and cost determination and control.
Cost accounting records — cost ledgers, reconciliation of cost and financial accounts; integrated accounts, basis of computerisation of accounts.
- Marginal costing and break-even analysis — basic concepts, marginal costing and absorption costing, cost-volume-profit analysis, break-even analysis, limitations of break-even analysis, differential cost analysis and relevant cost analysis, applications for management decision making (simple types).
- Budgetary control — basic concepts, functional budgets and master budgets, flexible budgets.
- Standard costing — concepts/uses and setting of standard cost accounting methods, computation of simple cost variances; relationship of standard costing and budgetary control, possible reasons for variation in costs.
- Uniform costing, Interfirm comparison, cost reduction, value analysis/engineering including value management.
- Cash Flow and Fund Flow Analysis
- Financial Analysis and Control
Paper 6: Information Systems and Technology (One Paper: 3 hours: 100 marks)
- Basics of Information systems and technology — various types of Information Technology hardware and software in common use. The different hardware and applications architectures (e.g. centralised, distributed, client server) available and the IT required operating them (e.g. PCs, servers, networks, peripherals). Concepts of General System’s theory and their application of Information Systems. Designing data and information architectures to assist and improve planning decision, making and control. Use of information for decision making at the various levels of the organisation and the components of the Information Systems, which can support those decisions (i.e. transaction processing systems, management information system, D.S.S., executive information systems and other expert systems). Systems evaluation and the stages in the systems development life cycle. Systems testing – off-line, on-line and user-acceptance. System changeover methods. Cost benefit analysis of I.T. investment. Basics of Cyber Laws
- Strategic information management — Information requirements of different organisations and at different levels of Cost-management benefit analysis for assessing value of information. Different methods of data collection. Electronic commerce and its impact on the business strategy. Knowledge management as key element. Use of data bases and planning modules in strategic planning process e.g. external database, economic models, forecasting and modelling packages / application. Strategy of information development and management on organisation structure.
- Need of an IS/IT as complementary to the organisation strategy. Impact of IT upon an industry by utilising frameworks such as Porter's five forces and value chain. The strategic business use of the Internet and www in terms of marketing and sales activities.
Business integration — between strategy, people, technology and operations in determining role of IS/IT. Role of IT in innovation and Business Process Engineering.
Planning and implementation of IS/IT strategies — the purpose and content IS, IT and IM strategies.
The social and organisational impact of IS/IT - the human information processor and the implications of providing a user friendly interface to gain maximum benefits while minimising the potential drawbacks; the growing awareness of remote working; the management of change and potential staff reactions.
- Audit — the process of review and audit of internal control. The major tools available to assist with such a review (e.g. audit planning, documenting systems, internal control questionnaires, sampling and testing). Internal auditor v. external auditor. Techniques available to assist audit in a computerised environment. Safety of data, evaluation of system to avoid fraud.
- Computer Applications of Management Accounting & Strategic Management — Particular Focus: Use of ERP and relational data base management system (like ORACLE). 2. Specific Application System Programmes to be chosen by the Institute every year for detailed study. Other application systems emerging from time to time to be included for general study.
Paper 7: Business Laws and Communication Skill (One Paper: 3 hours: 100 marks)
Section I — Business Laws (70 marks)
- Indian legal system — The judiciary system – Supreme Court, High Courts and other subordinate courts.
- Essentials of Contract Act — valid, void and voidable contracts, quasi contracts, bailment, conditions and warranties, breach of contract, damages.
Main provisions of Sale of Goods Act.
General concepts of Negotiable Instruments Act.
- Partnership Act — salient features, position of minors, implied authority, dissolution.
- The Companies Act, 1956 — definition, fundamental matters relating to formation, promoters’ function, fundamental matters and general framework of documents, meetings and proceedings; management of company operations, winding up; meetings and proceedings, mismanagement and arrangements, shares and debentures, borrowing of a company, accounts and audit, appointment and powers and duties of an auditor, cost accounting records and cost audit, auditor's report and explanation, preparation and presentation of accounts of government companies and statutory corporations. Corporate laws as amended from time to time.
General concepts and objects of:
Foreign Exchange Management Act, MRTP Act, Competition related Laws
Payment of Bonus Act, Payment of Gratuity Act
Consumer Protection Act; Air, Water and Noise Pollution Act Industrial Development & Regulation Act, Industrial Dispute Act and current legislations
Section II — Communication Skill (30 marks)
Letter writing, report writing, drafting, and business communication. Letter writing, Report writing drafting and business communication: Including personnel matters like issue of show cause notice, charge sheets, letter of dismissal, discharge and other punishment; sales matter like preparation of market survey report, drafting of advertisements etc.; financial matters like correspondence with banks regarding overdraft, cash credit, account current, Insurance companies regarding settlement of claims, Post & Telegram authorities regarding concessional rate of Postage etc; Inter departmental communication like internal memos, Office Circular, office cards etc; preparation of Press releases.
Paper 8: Business Taxation (One Paper: 3 hours: 100 marks)
Section I — Direct Tax (50 marks)
- Direct Tax laws — A comprehensive study of the Income-tax Act, 1961; Wealth-tax Act, case laws governing capital and revenue expenditure, deemed income, residence concept.
Special problems centering on the concept of assessees, registered firm, Hindu Undivided Family, Companies, Association of persons and trust, minors, cooperatives, non-resident Indians and avoidance of double taxation.
- Problems covering heads of income — Salaries, perquisites, gratuity and retirement benefits, income from house property, capital gains, income from other sources, income from business and profession, problems arising from aggregation of income and set off and carry forward of losses. Computation of income and Return of Income Tax, Filing procedure
Tax audit
Tax administration — appeals, revisions, review, rectification and application to Central Board of Direct Taxes.
Acquisition proceedings — principles of valuation of movable and immovable property.
Tax incentives and export promotion, deductions under Chapter VI, other benefits and tax exemptions.
Section II — Indirect Tax (50 marks)
- Indirect Tax Laws, administration and relevant procedures: -
(a) The Central Excise including Central Value Added Tax (CENVAT);
(b) The Central Sales Tax Act, 1956 (74 of 1956)
(c) The Customs Act, 1962 (52 of 1962); and
(d) Excise audit.
- Assessment of Tax payable by the Assessee under Indirect Taxes
- Powers of different authorities
- Impact of tax on GATT 94, WTO, Anti Dumping processing
- Tariff Commission and other Tariff authorities.
Group Discussion
Topics for Intermediate Stage I
- “Different costs for different purposes” — cost classification for decision making.
- MRTP, FEMA and IDR Act under current economic scenario.
- Amendments of Direct Tax in Central Budget
- Different accounting concepts in financial accounting.
