Syllabus for Chartered Accountancy Professional Intermidiate [CAP II].

Level CAP-II

Paper: 1 Advanced Accounting

(One Paper - Three Hours - 100 Marks)

 

Level of Knowledge: Working

 

Course objectives:

   Enable the candidates to understand the principles, methods and procedures of accounting as followed by different entities.

   Enable   the  candidates to  understand  the  relevant laws,  principles,  practices  and   NFRS  for  the preparation and presentation of financial statements.

   Provide  understanding of the tools and  techniques followed  in  the analysis  and  interpretation and presentation of financial statements of companies.

   Familiarize  the candidates with the basics of computerized system of accounting.

 

Course contents

 

1.          Accounting

Introduction, concepts, principles, system, methods, process, types and accounting as a profession

 

2.          Financial reporting standards

National  and  international  accounting  authorities,  procedures  of  developing  NFRS, conceptual framework for the preparation and  presentation of financial  statements and  working  knowledge on the following Nepal Financial  Reporting Standards including conceptual framework.

•   NFRS 3: Business combination

•   NAS 1: Presentation of financial statements

•   NAS 2: Inventories

•   NAS 3: Statement of cash flows

•   NAS 8: Accounting policies, changes  in accounting estimates and errors

•   NAS 10: Events after the reporting period

•   NAS 16: Property, plant and equipment

•   NAS 17: Leases

•   NAS 18: Revenue

•   NAS 20: Accounting for government grants and disclosure of government assistance

•   NAS 21: The effect of changes  in foreign exchange  rates

•   NAS 37: Provisions,  contingent liabilities, and contingent assets

 

3.          Accounting for special transactions

Leases,  hire  purchase  and  installment  system, contract  accounts,  investment  accounts,  branch (including foreign  branch) and  departmental accounts, computation of insurance claims for loss of stock and profit

 

4.          Company accounting

Accounting for share  capital and  reserve  funds-types of shares,  issue of fresh  shares,  bonus  shares, right  issue,  redemption  of  redeemable  preference  shares,   issue,  redemption  and  conversion  of debentures, and underwriting of shares and debentures

 

Preparation and  presentation of financial  statements as per  NFRS and  provisions  in Company  Act, format and contents as per the prevailing  laws, interpretation of items of financial  statements, profit (loss) prior to incorporation.

 

Winding up of companies and accounting treatment arisen there from including Statement of affairs. Additional  disclosures  and   comment  on   going   concern  concept  in   relation  to  winding   up, Accounting of acquisition, absorptions,  amalgamation, merger  and  reconstruction,   Statement  of cash flows- objectives, preparation methods (direct and indirect) and interpretations

 

5.          Partnership accounts

Treatment of goodwill  and  profit sharing,  admission, retirement and  death of partner (including annuity and policies methods), dissolution, conversion and merger  of firms

 

6.          Preparation and presentation of financial statements of special organizations a.   Banking and financial institutions

Types of financial  institutions as per prevailing  Acts, formats and  contents as prescribed by central bank,  accounting policies  and  disclosures requirement, interest income  recognition and  loan  loss provisioning, capital adequacy  and cash reserve requirement. Simple practical problems

 

b.   Insurance companies

Nature of operation (life and  non-life),  formats and  contents of financial  statements prescribed by Insurance Board,  accounting and  disclosure requirements,  premium income  recognition, liability recognition and treatment of re-insurance. Simple practical problems

 

c.   Agricultural accounting

Concept and peculiarity of inventory valuations

 

d.   Accounting for co-operatives

Nature of operation,  formats and  contents of financial  statements  prescribed by  Department  of Cooperatives, accounting  and  disclosure requirements, interest income  recognition and  loan  loss provisioning, PEARL System. Simple practical problems.

 

7.          Preparation of financial statements from incomplete records

Concept of incomplete records  and generation of need  for financial  information from other records, preparation of final financial statements from incomplete records

 

8.          Government accounting

Basis  of  accounting  and  accounts  classification. Differences   between  government  and  business accounting, Simple practical problems. Concept of PFM and features of sound  PFM of the country

 

9.          Analysis and interpretation of financial statements

Interpretation of financial  statements, Segmental information analysis, Analysis of performance and position through cash flow, ratios and trend

 

10.        Accounting for NPOs

Preparation of financial statement of not for profit organizations, and fund based accounting

 

11.         Accounting in computerized system

Salient features, chart of accounts and  grouping, codification of accounts, maintenance of ledger, accounting packages-  general and customized, accounting reports

 

Level CAP-II

Paper: 2 Audit and Assurance

(One Paper - Three Hours - 100 Marks)

 

Level of Knowledge: Working

 

Course objectives:

           To develop candidates’ capability in understanding the relevant auditing procedure.

          To  develop  candidates’  capability to display  the ability to document the accounting and internal control system of an enterprise.

          To develop  candidates’  capability in identifying significant risks  and  apply  risk  assessment tools to the engagement.

 

 

Course contents

1.          General concepts

 

a.          Auditing and assurance

Concept of assurance versus audit , origin and history of audit, objectives, scope and limitation of audit, general principles governing  an audit, relationship of audit with other subjects;  different types of audit, statutory audit, internal audit, tax audit , latest development in auditing profession.

 

Differences  between auditing and accounting, investigation, management etc, working knowledge on the following Nepal Standards on Auditing issued by the Institute of Chartered Accountants of Nepal.

•  NSA 200-Objectives and general principles governing  an audit of financial statements

•  NSA 210-Terms of audit engagements

•  NSA 230-Audit documentation

•  NSA 250- Consideration of laws and regulations in an audit of financial statements

•  NSA 300- Planning an audit of financial statements

•  NSA 315 -Understanding the entity and its environment an assessing the risk of material misstatements

•  NSA 320- Audit materiality

•  NSA 500- Audit evidence

•  NSA 505- External confirmation

•  NSA 510- Initial engagements-opening balances

•  NSA 530- Audit sampling  and other means  of testing

•  NSA 610-Considering the work of internal auditing

•  NSA 620-Using the work of an expert

 

b.          Ethics

General introduction to code of ethics issued by ICAN, Provisions  governing  ethics by ICAN Act and circulars,  Basic cases of verdict on disciplinary cases

 

c.          Regulatory compliance

Regulatory framework:  ICAN Act, Companies Act, Securities Act, Audit Act, Bank and

 

Finance Companies Act and other relevant acts with regards  to appointment, responsibility and reporting by auditors

 

2.   Planning an audit engagement

 

a.          Understanding the entity and its environment and assessing the risk of  material misstatement

 

•  Understanding the client’s  business,   risk  assessment  and   response  to  assessed   risk, Identification of business  risk of Client and  application of business  risk concept over the audit risk assessment procedure.

 

•   Audit  risk   and    concept   of   inherent   risk,   control   risk   and    detection   risk   and interrelationship among  the different types of audit risk,

 

•  Discuss  the importance of risk  analysis  and  identify and  describe  the need  to plan  and perform  audits with an attitude of professional skepticism

 

•  Describe the use of information technology in the risk analysis

 

b.          Audit plan and audit strategy- contents of an audit plan, concept of audit planning memorandum, and requirement of documentation in planning and communication to those charged with governance

 

c.          Concepts of using approaches on audit planning

 

Reliance on control, Reliance on internal auditors, Reliance on other experts

Reliance  on  work  of another auditor, Probable  extent of tests of controls and  substantive procedures, including analytical procedures, The nature and extent of client-generated information, The probable number, timing, staffing and location of assurance visits

 

d.          Internal control system and control environment, fraud and error

 

Definition of internal control, Management role in designing  the internal control system Design  of internal control system to prevent and  detect fraud  and  error,  Components  of internal control, Limitations of internal control, Concept of fraud  and  error  and  auditors responsibility to consider fraud  in an audit, Auditor’s responsibility with regard  to fraud  and error, Knowledge of Committee on Sponsoring Organization (COSO) framework

 

e.          Application of analytical procedures

 

Analytical review- concept and use of analytical review procedure in gathering audit evidence

 

f.          Materiality, tolerable error, and sample sizes

 

Concept of materiality and standards of auditing on materiality

 

g.          Design and documentation of plan and program

•   Audit documentations

•  Nature of audit documentation

•  Form, content and extent of audit documentation

•   Audit file (temporary and permanent)

•  Changes in audit documentation in exceptional circumstances

•   Concept of audit note book, working papers,  etc.

 

h.          Evaluation of going concern assessment at planning stage and use  of standard related to going concern in planning an audit engagement

 

i.          Co-ordinance and monitoring of the work. Evaluation of internal control system j.          Transaction cycles (revenue, purchases, payroll, inventory, capital expenditure)

k.          Communication with management and those charged with corporate governance.

l.          Evaluation   of    financial  statement   assertions:   assets,   liabilities,   income  and expenditure, including accounting estimates.

m.        Concepts of using approaches on audit planning

•   Reliance on control

•   Reliance on internal auditors

•   Reliance on other experts

•   Reliance on work of another auditor

•     Probable   extent of  tests of  controls and  substantive  procedures,  including  analytical procedures

•   The nature and extent of client-generated information

•   The probable number, timing, staffing and location of assurance visits

 

n.       Internal control system and control environment, fraud and error

 

•    Definition of internal control

•    Management role in designing  the internal control system

•   Design of internal control system to prevent and detect fraud and error

•    Components of internal control

•    Limitations of internal control

•    Concept of fraud and error and auditors responsibility to consider fraud in an audit

•   Auditor’s responsibility with regard to fraud and error

 

o.          Application of analytical procedures

Analytical review- concept and use of analytical review procedure in gathering audit evidence

 

p.          Materiality, tolerable error, and sample sizes

Concept of materiality and standards of auditing on materiality

 

q.          Design and documentation of plan and program

 

•    Audit documentations

•    Definitions, nature of audit documentation

•   Form, content and extent of audit documentation

•    Audit file (temporary and permanent)

•   Changes in audit documentation in exceptional circumstances

•    Concept of audit note book, working papers,  etc.

r.        Evaluation of going concern assessment at planning stage and use  of standard related to going concern in planning an audit engagement.

 

s.          Co-ordinance and monitoring of the work. Evaluation of internal control system t.         Transaction cycles (revenue, purchases, payroll, inventory, capital expenditure)

 

u.          Communication with management and those charged with corporate governance

 

v.          Evaluation of financial statement assertions: assets, liabilities, income and expenditure, including accounting estimates

 

3.          Gathering evidence during an audit engagement

•       Assertions- meaning of assertions, types of assertions at classes  of transactions and  account balances,   financial  statement level  and  disclosure level,  use  of assertions in  gathering audit evidence

•      Concept, sufficient appropriate audit evidence

•      Vouching   and   verification  of  major   financial   statement  items  (income,  expenses,   assets, liabilities, contingent  liabilities) - consideration of internal control requirement, different laws and regulations and assertion testing

•     Audit sampling  and other means of testing

•    Use of external confirmation as audit evidences

•      Different methods of obtaining evidence

•     Identification and use of the methods for different business  situations

•      Reliability of different types of assurance evidence

•       Identification  of  situations  where   analytical  procedures,  test  of  control  and   substantive procedures are to be implied.

•    Evidence from analytical procedures, test of control and substantive procedures

•     Quantity and quality of evidence  needed for reports

•       Written  confirmation of  representations  from  management  (management  representations- concept,  cases   when   management  representation  cannot  be   an   audit  evidence,   use   of management representations as audit evidence)

•       Initial audit engagements- Consideration from the incoming auditor regarding the correctness of opening balances

•       Audit of payments: General  considerations, wages,  capital expenditure, other payments and expenses,  petty cash  payments, audit of payments into and  out of the bank,  reconciliation of bank statements with cash book

•     Audit of receipts: General considerations, cash sales, receipts from debtors, other receipts

•     Audit of purchases, vouching  cash and credit purchases, forward purchases, purchases returns

•       Audit of sales, cash and credit sales, goods on consignment, sale on approval  basis, sales under hire-purchase agreement, returnable containers, various types of allowances  given to customers, sales returns, sales ledger

•       Audit of  suppliers’  ledger   and   debtors’  ledger:   Self-balancing  and   the  sectional-balancing system, total or  control accounts, loose  leaf and  card  ledgers,  confirmatory statements from credit customers and suppliers, provision  for bad and doubtful debts, writing off of bad debts

•       Audit of impersonal ledgers:  Capital expenditure,  deferred revenue  expenditure and  revenue expenditure,  outstanding  expenses   and  income,   repairs   and  renewals,   distinction  between reserves and provisions,  implications of change  in the basis of accounting

•     Audit of assets and liabilities

•     Audit of share capital and transfer of shares

•     Audit of incomplete records

•       Audit of accounting estimates (concept of “accounting  estimates”  and  techniques to obtain audit evidence  regarding the appropriateness of using the right estimate by management)

•     Audit of limited companies: Appointment of auditors, powers and duties of auditors

 

4.          Using work of others

 

•   Using the work of another auditor

•    Considering the work of internal auditor

•   Using the work of an expert

 

5.          Internal audit and corporate governance

 

•    Concept of Internal Audit and  Best Practices adopted  from  IFAC Code  of Ethics for Internal

Audit Services

•   Difference between internal and external audit services

•   Scope of internal audit function

•    Internal audit reports

•    Concept of corporate governance

•   Role of internal audit in corporate governance

•    Function and extent of internal audit in entities

•    Outsourcing in internal audit

•    Audit committee and relevant legal provisions  for requirement of audit committee

 

6.          Audit conclusions and reporting

i.          Concept of “Hot Review and Cold Review”

 

ii.         Audit finalization and final review

 

      Importance of overall review of audit evidence  obtained

      Procedures for overall review of financial statements

      Significance of uncorrected misstatements

      Effect of dealing with uncorrected misstatements

iii.        Concluding and reporting on engagements

 

•    Consideration of subsequent events

•    Evaluation of results of assurance tests and procedures

•    Reports on assurance engagements consistent with results of assurance procedures

•    Elements of assurance reports

•     The  auditor’s  report on  financial   statements-  Elements of  auditor’s  report, auditor’s liability regarding  the  unaudited  supplementary  information  presented  with  audited financial statements

•   Types of audit opinion- Unqualified opinion and modified  opinion

•     Modified   opinion-  Qualified   opinion,  disclaimer  of  opinion,  adverse   opinion  and situations when such opinion is concluded

•    Audit reports- Unmodified reports and modified  reports

•     Modified   reports-  Modification  through  modification  of  opinion  and   modification without modifying  audit opinion- use of emphasis of matter paragraph and other matter paragraph and cases when such paragraphs is added  to auditor’s report

•     Comparatives- Concepts of corresponding figures  and  comparative financial  statements and their differences

•     Auditor’s  responsibility regarding other  information in  documents containing audited financial statements [not included- special purpose audit engagement-NSA-800]

iv.        Related services

 

•   The concept of audit and other assurance engagements

 

 

•    Concept of statutory audits

•    Inherent limitation of audit

•    Concept of true and fair view

•    Concept of materiality

•     Concept of and differences  between audit services and non audit services (assurance and non  assurance engagements), the difference  between limited assurance engagement and reasonable assurance engagement

•   NSA: 240-Nepal Framework for Assurance  Engagements

•    Engagements to perform  agreed upon  procedures regarding financial information

•    Engagements to compile financial information

 

7.          Government audit

Government audit as per ISSAI frameworks, financial audit and compliance audit. General concept of performance audit, propriety audit and  audit of governmental organizations - Simple  knowledge testing about the definition of such concepts, features and basic principles of government audit and audit of local bodies

 

8.        Audit of specific organizations

Audit of specific organizations- Hospitals, educational institutions like schools,  universities, not for profit organizations, clubs , Cooperatives, Hire purchase and leasing companies, joint venture

 

Level CAP-II

Paper: 3 Corporate & Other Laws

(One Paper-Two Sections- Three Hours-100 Marks) Level of Knowledge: Working

Course objectives:

    Understand the  general   knowledge  of  the  provisions   of  Nepalese   Commercial  Laws  and  their application in business  environment.

 

Course contents

 

Nepalese Commercial Laws

 

Nepal Chartered Accountants Act, 2053 and Nepal Chartered Accountants Rules, 2061

 

•    About the Institute of Chartered Accountants of Nepal

•    Objective of the Institute

•   Council and its committees

•    Procedure of disciplinary action

•    Membership of the Institute

•    Examination and academic  qualification of chartered accountants,

•    Recognition of professional qualification

•    Certificate of practice

•   Code of conduct and other provisions  of Nepal Chartered Accountants Act, 2053 and Nepal

Chartered Accountants Rules, 2061

 

The Companies Act 2063 [upto Section 119]

 

•   Meaning  and concept and  types of company

•    Incorporation of company,

•    Lifting of corporate veil,

•    Conversion of company,

•    Pre-incorporation contract,

•    Memorandum & articles, prospectus

•    Constructive notice and indoor  management

•   Shares and debenture,

•    Reduction of share capital,

•    Purchase of company's own share,

•   Issue of share at discount,

•   Issue of share at premium,

•    Meetings of company

•   Board of directors

•    Accounts and records  of company  and audit

 

Securities Act 2063 [upto Section 70]

 

•   Meaning  and concept of securities and stock exchange

•   General concept on securities exchange  board,

 

 

•    Registration and issuance  of securities,

•     Stock exchange,  securities business  and securities exchange  professionals, security exchange  market and transactions of securities

Banks and Financial Institutions Act, 2063 [Upto Sec. 67]

 

•    Incorporation of banks and financial institution

•    Classification of banks and financial institution

•   Board of directors and chief executive of banks and financial institutions

•   License of banks and financial institutions

•    Capital of banks and financial institutions

•   Financial  activities of banks and financial institutions

•    Regulation, inspection and supervision

•   Lending and recovery

•    Accounts, records,  financial statements and audit

Nepal Rastra Bank Act, 2058 [upto Section 75]

 

•    Concept of bank

•    Objectives and functions, duties and power of the central bank

•     Formation of board and functions, duties and powers, financial provisions,  monetary         functions and open market operation

•    Monetary unit, banknotes and coins

•   Foreign exchange  policy, regulation and reserve

•    Relation with government of Nepal

Industrial Enterprises Act, 2049

 

•   Meaning,  concept and types of industries

•     General concept of industry promotion board,  licensing,  registration of industrial , facilities and concessions,

•    Formation and functions of one window committee

Industrial human resource and sick industry and other provisions  of Industrial Enterprises Act, 2049

 

Labor Act, 2048

 

•    Concept of labor / capital relations

•   Types labor, employment and security of service, working hours  and remuneration

•     Health & safety, welfare, special types of enterprise,  Code of conduct and the punishment, dispute settlement and other provisions  of Labor Act, 2048

Bonus Act, 2030

 

•   Meaning  and concept of bonus

•   Bonus calculation and distribution

•    Restriction on payment of bonus

•    Payment of bonus  in advance

•   Welfare fund,  Dispute settlement and other provisions  of Bonus Act, 2030

Contract Act 2056

 

•   Meaning  and concept of contract

•   Types of contracts

 

 

•    Essential elements of valid contract

•    Guarantee, indemnity and subrogation

•    Contract relating to bailment, collateral & deposit, sale of goods, agency and transportation of goods

•    Performance and execution of contractual liability

•   Breach of contract and its remedies,  privity of contract, and other provisions  of Contract Act, 2056

 

Insurance Act 2049

 

•   Meaning,  concept and types of insurance

•    Fundamental principles of insurance

•    Formation, functions and power of insurance board

•    Registration and cancellation of registration of insurer

•    Insurance agent, surveyor and broker

•    Audit, insurance offence, punishment and penalties and other provisions  of  Insurance Act,

2049

 

Negotiable Instruments Act 2034

 

•   Meaning  and concept of negotiable instruments

•    Classification of instruments

•     Promissory note, bill of exchange  and cheques

•   Endorsement

•    Negotiation, negotiability, assignability

•    Rights and obligations of parties to an instrument obtained illegally

•    Presentment of instrument, dishonor of instrument

•    Notice of dishonor

•    Noting and protesting

•   Discharge  from liability

•    Payment and interest

•    Presumption as to negotiable instrument and other provisions  of  Negotiable Instrument Act,

2034

 

Social Welfare Act, 2049

 

•  Definition,

•  Social welfare program, welfare council, meeting and decision  of the council,

•  Function, duties and power of the council,

•   Affiliation, economic assistance, suspension

•  Other provisions  of Social Welfare Act, 2049

 

WTO and Nepalese Laws

 

•   WTO and its membership

•    Function and role of WTO

•    Concept of Financial Bill/Act

•    Legislative process of Nepal

•   WTO parameters and Nepalese laws

 

CAP-II Paper: 4 Financial Management

(One Paper - Three Hours - 100 Marks)

 

Level of Knowledge: Working

 

Course objectives:

 

    Develop knowledge and understanding of financial management methods for analyzing  the various sources of finance and

    Capital investment opportunities and application of various tools and techniques for business planning and control.

 

 

 

Course contents

 

Introduction and Fundamental Concepts of Financial Management

•        An overview of financial management

•          Functions and objectives of financial management

Financial  environment: markets, institutions, and interest rates; risk and return: the basics, time value of money

 

Strategic Finance and Policy

•           Capital structure: introduction, shareholders’ funds,  methods of raising  equity finance,  long- term debt finance,

•          Operating and financial gearing, gearing and the required return,

•           Cost of equity and debt capital, overall cost of capital, Financial  distress, signaling and agency costs.

 

Analysis of Financial Statements

•        Overview, financial statement analysis and its precautions,

•          Horizontal analysis, vertical analysis, ratio analysis,

•          DuPont analysis, Cash flow analysis, analysis reporting

 

Valuation of Securities

•        Fixed income  securities - characteristics and valuation;

•          Common stock- characteristics, valuation and issuance,  Hybrid securities-characteristics

 

Capital Investment Decision

•          Concepts of cost of project

•          Capital budgeting, evaluating cash flows, cash flow estimation,

•          Investment evaluation and capital rationing

 

Working Capital Management and Financial Forecasting

•        Financial  forecasting and working capital policy

•           Short-term finance, management of cash and marketable securities, management of accounts receivables,  Short-term and long-term funding  alternatives

 

Distribution Policy

•           Dividend   decision:   strategic  and   legal  dimensions  of  dividend,  theory  of  dividend  and retention policy

 

Overview of Capital Market

•        Primary and secondary market,

•           Dematerialization, CDS, stock exchange,  commodities exchange  and  regulatory framework, mutual fund, International capital market

 

Investment opportunities in Nepalese Capital Market

•        Key factors and indicators to be considered before making  investment in capital market

•        IPO & secondary market

 

CAP-II Paper: 5 Cost and Management Accounting

(One Paper - Three Hours - 100 Marks) Level of Knowledge: Working

Course objectives:

    Required  comprehensive knowledge of costing concepts and  detail procedures and  documentation involved in cost ascertainment systems.

    Provide with an understanding of the application of above knowledge to basic planning, control and decision-making.

 

Course contents

 

Cost concepts and costing methods

•          Evolution of cost accounting

•        Definitions

•          Objectives of cost accounting

•          Importance of cost accounting

•          Cost accounting system

•          Cost concepts and elements of costs

•        Types and methods of costing

•          Cost, expenses  and loss

•           Relationship between cost accounting, financial accounting, management accounting and financial management

•          Classification of costs, Cost centers and cost unit

 

Material Control

 

•          Purchasing of materials

•        Receiving of materials

•          Inspection of materials

•          Storage of materials

•        Issuing of materials

•          Maintenance of inventory records

•          Techniques of material control

•        Pricing methods

•          Stock valuation material losses

•          Treatment of normal  loss and abnormal loss of materials

•          Accounting of waste, scrap, spoilage and defectives

•        Just in time (JIT)

•          Material requirement planning (MRP)

 

 

Labour Control

•          Direct and indirect labour

•          Control over labour  costs

•          Attendance and payroll system

•          Treatment of holiday pay, idle time, overtime etc.

 

 

•        Labour turnover

•          Methods of wage payment

•          Incentive system

•          Accounting for labours

•        Job evaluation and merit rating

•        Efficiency rating procedures

Overhead Control

•          Classification of overheads

•          Manufacturing overheads

•        Office and administrative overheads

•        Selling and distribution overheads

•          Distribution of overheads

•          Absorption of overheads

•          Treatment of under-absorbed and over-absorbed overheads

•          Treatment of certain items in costing

•          Actual overhead rate vs. predetermined overhead rate

•          Blanket overhead rate vs. departmental overhead rate

•          Supplementary overhead rate

•          Concept related to capacity

•          Comprehensive machine hour rate

Unit costing

•        Meaning

•          Cost sheet

•          Production statement

•          Production account

Cost Accounts System, Cost Control  (Integrated & Non-integrated Accounting System)

•          Non-integrated accounting system

•          Integrated accounting system

•          Reconciliation of cost and financial accounts

 

Methods of Costing

a.          Job Costing System

•        Meaning,  procedures of job cost accounting,

•          Advantages of job costing, job ticket

 

b.          Batch Costing System

c.          Contract Costing System

•        Meaning

•        Recording  of contract costs

•        Specific aspects of contract costing

•          Profit on incomplete contracts

•          Distinction between job costing system and contract costing system d.          Job Costing System

•        Meaning,  procedures of job cost accounting,

 

 

•          Advantages of job costing, job ticket e.          Batch Costing System

f.          Contract Costing System

•        Meaning

•        Recording  of contract costs

•        Specific aspects of contract costing

•          Profit on incomplete contracts

•          Distinction between job costing system and contract costing system

•           Progress payments, retention money, escalation and de-escalation clause, balance  sheet entries

 

g.          Process Costing System

•        General principles

•          Treatment of process loss and gains

•        Working  progress

•          By-products and joint products

•          Inter-process profits

•          Distinction between job costing system and process costing system

•          Equivalent production unit

•          Apportionment of joint costs

 

h.          Operating Costing System

•          Introduction, scope

•          Collection, classification and ascertainment of cost

•          Cost unit

 

Cost concepts for Decision Making

a.          Cost behavior

 

b.          Methods of separating fixed and variable costs c.          Cost Volume Profit Analysis

•          Profit volume ratio

•        Break-even point

•        Margin of safety

•          Target profit

 

d.          Limiting factor

e.          Marginal costing and differential costing f.          Marginal costing and absorption costing

•        Marginal cost equation

•        Break even chart and angle of incidence

•        Sales mix

•          Advantages of marginal  costing

•          Limitations of marginal  costing

Costing for planning and Control – Budgets

•          Budgets and budgetary control system

 

 

•          Steps in budgetary control

•        Types of budgets

•        Fixed and flexible budgeting

•          Implementation of budgets

•          Control ratios

•          Advantages of budgetary control system

•          Limitations of budgetary control system

•        Zero based budgeting

Standard costing:

•        Meaning  and Objectives

•          Advantages and limitations

•          Distinction between budgetary control and standard costing

•        Types of standards

•          Setting standards

•          Material cost variance analysis

•        Labor cost variance analysis

Uniform Costing and Inter firm comparison

•        Meaning

•          Application of uniform costing

•          Objectives of uniform costing

•          Advantages of uniform costing

•          Limitations of uniform costing

•          Inter-firm comparison

Cost Control And Cost Reduction

•        Introduction

•          Distinction between cost control and cost reduction

•          Advantages of cost reduction

•          Cost reduction plan & program

•        Scope of cost reduction

 

Paper-6 Business Communication & Marketing

(One Paper- Two Sections-Three Hours-100Marks) Section A: Business Communication

Level of Knowledge: Working

 

Course objectives:

    Develop  an understanding of the role of communication in business,  communication process  with basic  qualities  of  business   documents,  letters,  reports  through  writing assignments, simulating situations occurring in business  organizations.

    Become  familiar   with  sources   of  business   information  and   the  techniques for  collecting  data necessary  for the preparation of documents in business  and  produce employment communication, including resume,  cover letter, and other employment documents.

    Develop   an   understanding  of  non-written  business   communications  and   demonstrate  human relations skills  through the use  of effective listening techniques  and  interpersonal skills  within a group setting (team building).

 

 

Course contents

 

Introduction: Communicating at Work

• Succeeding  in the new workplace

• Examining  the process of communication

• Overcoming interpersonal barriers

• Communicating in organizations

• Ethics in business  communications

• Strengthening your communication skills

 

Working in Groups

•          Listening skills

•        Group interactions

•          Determining group goals

•          Individual roles in groups

•          Conflict resolution

•        Effective meetings

•          Writing notifications, agenda  and minutes

•        Giving and receiving feedback  in groups

 

Communicating Across Cultures

•          Importance of international business

•          Diversity in today's workplace

•        Ways to look at culture

•        Values, beliefs, and practices

•        Nonverbal  communication

•          Writing to an international audience

•        Learning more about international business  communication

Employment Communication

 

 

•          Preparing for employment

•        The persuasive resume

•        Emailing your resume

•        The persuasive letter of application

•        Follow-up letters

•           Interviewing for employment

 

Writing Reports and Proposals

•        An inside perspective: analyzing  data and writing reports and proposals

•        A timetable for writing reports and proposals

•        Choosing  information for reports and proposals

•        Analyzing data and information for reports and proposals

•          Organizing information in reports and proposals

•          Presenting information effectively

•          Report types: informational and analytical

•        Proposal  types: technical and financial

•        Formal and informal  reports and proposals

 

 

 

Paper: 6 Section B: Marketing

 

Level of Knowledge: Working

 

Course objectives:

    Develop knowledge and understanding of fundamentals of marketing relevant to a professional accountant.

    Understanding marketing forces and practices in organizations.

 

 

 

Course contents

 

Meaning of Marketing and Marketing Mix

•            Marketing: meaning and importance

•           Marketing mix: meaning and components

•         Emerging marketing challenges

 

Evolution of Marketing Concepts

•          Production, product, selling, marketing, customer & societal, Holistic concept

 

Environmental Context of Marketing

•          Marketing environment: meaning, importance

•        Micro environment forces in marketing

•        Macro environment forces in marketing

•          Impact of environment on marketing

•           Marketing environment in Nepal

 

 

 

Market Segmentation and Targeting

 

 

•          Market segmentation: meaning, benefits and requirements

•        Process of market segmentation

•          Segmentation variables for consumer and industrial markets.

•          Market targeting

•          Market segmentation in Nepal

 

Market Information System

•        Meaning  and importance of market information system

•          Components of market information system

•          Market research process

•          Problems of market information system in Nepal

 

Buyer Behavior Analysis

•        Meaning  and importance of buyer behavior

•          Stages of consumer buying behavior

•          Factors affecting consumer buying process

•          Features of organizational buying behavior

•          Factors affecting organizational buying behavior

•          Consumer buying behavior  in Nepal

 

Product Decisions

•          Product: Meaning,  levels, types

•          Product life cycle and marketing activities

•        Process of new product development and reasons  for their failure

•          Product line and mix

•        Service product

•        Branding,  packaging,  labeling

•          Product scenario  in Nepal.

 

Price Decisions

•        Price: meaning, importance, objectives and factors affecting price determination

•          Methods of price determination

•        Pricing policies and strategies

•        Pricing scenario  in Nepal

 

Place Decisions (Distribution)

•        Place: meaning, importance and objectives

•          Marketing middlemen

•          Channels structures for consumer and industrial products

•        Physical distribution: meaning and components.

 

Promotion Decisions

•          Promotion: meaning, objectives

•          Promotion mix: meaning and factors affecting it

•          Advertising: meaning, importance, objectives, media

•        Public relations: meaning, objectives, methods

•        Sales promotion: meaning, objectives, methods

 

 

•        Personal  selling: meaning, objectives, methods

•          Promotion scenario  in Nepal

 

Emerging Concepts in Marketing

•          Relationship marketing

•        E-commerce

•          Strategic alliances

•        Green marketing

•           Ethics in professional services marketing

 

Level CAP-II

Paper: 7 Income Tax & VAT

(One Paper - Three Hours - 100 Marks)

 

Level of Knowledge: Working

 

Course objectives:

    The  objective  of  this syllabus  is  to give  candidates an  understanding of  the basic  concepts  of Nepalese  Income  Tax regulations as an important part of direct taxes and of Nepalese  Value Added Tax regulation as an important part of indirect tax in Nepal.

    Recognize  the principles governing  taxation of income,  gain  from  disposal  of assets and  liabilities and conditions of disposals  and deemed disposals.

    Recognize the basic concepts of charging  income  tax on various incomes.

    Recognize the basic concepts of tax planning.

    Apply code of ethics principles in taxation assignments.

Course contents

•   Income  year

•    Assets (depreciable assets, investment, stock, business  assets etc.)

•   Persons  (natural and legal person  and their types, associated persons.)

•   Income  (Eg. service fee, royalty, dividend etc.)

•    Definitions of basic concept as per Sec. 2

Residential concept

 

•    Concept of resident and non-resident

•    Worldwide taxation and source of taxation

•    Concept of Nepal sourced  income  and provisions

•   Double tax relief mechanism- foreign tax credit and double  tax avoidance  treaties

•   Basic concept of foreign permanent establishment

a.   Basis  of taxation

•   Persons  liable to pay tax

•   Tax exempt organizations

•    Exempt incomes

•   Taxable income  and assessable  income

•    Rates of tax and business  concessions

•   Heads of income

b.   Tax accounting

•   Nepal accounting standard vs tax accounting

•   Cash vs. accrual basis of accounting in taxation

•   Basis of accounting for natural person  and entities

•   Change in accounting methods

•   Reverse of amounts including bad debts

•   Approved Retirement Funds

•   Permanent Account Number (PAN)

1.   Computation of taxable income

a.   Calculation of income from business:

•    Components of income  from business

•   Incomes  which do not form part of income  from business.

•    Deductions allowed from income  from business

 

 

•    Limitations and conditions for a particular deduction

•   Schedule  2 of the Act.

b.   Calculation of income from employment

•    Components of income  from employment

•   Incomes  which are excluded  from income  from employment

c.   Calculation of income from investment

•    Components of income  from investment

•   Incomes  which do not form part of income  from investment

•    Deductions allowed from income  from business

•    Limitations and conditions for a particular deduction

d.   Deductions allowed from taxable income:

•    Deduction for donation and gifts

•    Deductions for contributions to retirement funds

•    Deduction for life insurance premium paid

•    Deduction for losses from income  from business  or investment

•   Carry forward and carry back of losses for set off

•    Deductions not allowed

e.   Calculation of net gains from disposal of assets and liabilities

•    Net gain and tax calculation from gain from disposal of non business  chargeable assets

•    Net gain and tax calculation from disposal of business  assets

f.    Tax credits

•   Medical tax credits

•   Foreign Tax credits

g.   Quantification, allocation and characterization of amounts

•    Quantification & characterization of payments under annuities, installments and leases

2.   Withholding taxes

•    Concept of withholding taxes

•    Payments attracting withholding taxes

•   Final withholding taxes

•    Withholding tax returns

3.   Tax returns, tax assessment and appeals

•    Estimated tax returns

•   Final tax returns

•   Revised tax assessment process

•   Jeopardy tax assessment

•   Tax collection, waiver and refund

•   Tax administration – duties and power of DG, Tax officer, tax office

4.   Other fundamental concepts of Income Tax Act

•     Provisions  of Income  Tax Act not specifically mentioned but interlinked/relevant to the concepts covered above.

Income Tax Act 2058 and Income Tax Rules, 2059

 

Excluded:

1. Sections 41 to 49, relating to Disposal of business  with special conditions

2. Sections 59 to 62, relating to Bank & Insurance Business

3. Section 114 and above – relating to tax review and fine/penalties

Value Added Regulations of Nepal (Marks allocation reduced from 40 marks to 30 marks)


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