ACCOUNTANCY & AUDITING Paper-II (MARKS-100)
(A) Auditing (40 Marks)
I. Fundamental Auditing Principles and Concepts:
Audit and Auditing, True and Fair View, Audit Assertions, Reasonable Assurance, Documentation and Audit Evidence, Audit Program, Audit Risks, Computer Information Systems (EDP Systems) and Computer-assisted Audit Techniques (CAAT), Inspection, Fraud, Going Concern, Audit Materiality, Misstatement, Governance and Premise, Tests of Control and Substantive Procedures.
II. Audit Considerations, Dimensions and Conduct:
Internal Control System and Internal Audit, Internal VS External Audit, Responsibility for Financial Statements, Audit Planning, Scope of an Audit, Objectives of an Audit, Inherent Limitations of an Audit, Risk Assessment and Management, Internal Audit and Corporate Governance, Classification of Audit, Qualities of an Auditor, Auditing in Computer Information Systems (EDP Systems) and Computer-assisted Audit Techniques, General Auditing Principles and Techniques commonly applicable to various Types of Undertakings including Merchandising, Manufacturing, Banking, Insurance, Investment Entities etc., Audit Performance and Audit Completion.
III. Role and Responsibilities of an Auditor:
Auditor’s professional and legal Rights, Responsibilities & Duties, and Liabilities; Auditor’s Opinion and Report, and their classification (Types); – as specified under the Companies Ordinance 1984, and in the handbook of IFAC.
(B) Business Taxation (30 Marks)
IV. Tax Structure, and Fundamental Concepts Vis-à-vis Income Tax in Pakistan:
Tax Structure in Pakistan; Fundamental Definitions/Terminologies defined under Section 2 of the Income Tax Ordinance 2001.
V. Income Tax and Sales Tax Principles, and their Application:
Selected Provisions from Income Tax – Income for Tax Purposes [Section 4, 9 & 10], Heads of Income [Section 11], Tax Payable on Taxable Income [First Schedule to the Ordinance], Salary Income and Taxation [Sections 12 to 14], Income from Property [Sections 15 & 16], Income from Business[Sections 18 to 20], Capital Gains[Sections 37 to 38], Income from other sources[Section 39, 40, 89, 101(6), 111],Tax Credits [Sections 61 to 65], Taxation of Individuals, AOPs and Companies [Sections 86, 92, 94], Due Date for Payment of Tax [Section 137], Deduction of Tax at Source/With-holding Tax [Sections 147, 149, 153, 155]and related Income Tax Rules 2002. Selected Definitions and Provisions from Sales Tax –Scope of Tax [Section 3], Exempt supply [Section 2(11)], Goods [Section 2(12)], Input Tax [2(14)], Registered person [Section 2(25)], Supply [Section 2(33)], Tax [Section 2(34)], Retail Price and Retailer [Section 2(27)& 2(28)], Taxable Activity [Section 2(35)], Taxable Supply [Section 2(41)], Tax Fraction [Section 2(36)], Tax Period [Section 2(43)], Time of Supply [Section 2(44)], and Determination of Tax Liability [Section 7].
(C) Business Studies, and Finance (30 Marks)
VI. Business Studies:
Nature and Scope of a Business Entity, Contemporary Challenges posed to a Business; Common Legal Forms of a Business Entity – Sole Proprietorship, Partnership, Joint Stock Company, their Features, Formation and Management; Business Combinations and their Scope; Business Cycle and its Implications; Role of Information Technology in Business.
VII. Finance:
Meaning, Nature and Scope of Finance, and Financial Management; Common Modes (Types) of Business Finance – Short-, Medium-, and Long-term Financing; Nature and Scope of Financial Markets and Institutions; Features and Classification of Financial Markets; Financial Management Techniques for Decision Making: Time Value of Money, Cost of Capital and Capital Budgeting Techniques.