ACCOUNTANCY & AUDITING Paper-I (MARKS-100)
(A) Financial Accounting (50 Marks)
I. Fundamental Accounting Principles, Concepts, Assumptions and Conventions:
Nature and Scope of Accounting, Accrual/Matching Concept, Consistency of Presentation and Comparability, True and Fair View, Neutrality, Materiality, Prudence, Completeness, Understandability and Usefulness, Going Concern, and Substance over Form.
II. Accounting Cycle/Process and Financial Statements:
Transactions and/or Events, General Journal, General Ledger, Trial Balance (Unadjusted),Adjusting Entries and Adjusted Trial Balance, Work Sheet, Financial Statements including Income Statement, Statement of Financial Position (Balance Sheet), Statement of Cash Flows and Statement of Changes in Equity in accordance with the Financial Reporting Framework as specified by International Accounting Standard Board (IASB) through IFRSs/IASs, and by Securities and Exchange Commission of Pakistan through Companies Ordinance 1984, and Closing and Reversing Entries.
III. Attributes, and Significance of Accounting Information:
Attributes of Accounting Information, Information/Reporting Requirements of various Users/Stakeholders of Financial Statements including External (Investors/Shareholders, Creditors, Suppliers, Lenders/Financiers, Government Agencies etc.) and Internal (Board of Directors, Partners, Managers, Employees etc.) Stakeholders.
IV. Accounting for common Legal Forms of a Business:
Accounting Principles and Financial Statements of Sole-proprietorships, Partnerships and Joint Stock Companies including Banking Companies (Excluding Advanced Topics like Amalgamation, Capital Reduction, Consolidation etc.)
V. Accounting for Associations Not-for-profit, and for Public Sector:
Accounting Principles and Financial Statements – of Associations Not-for-profit, and – of Public Sector Entities as per Standardized Financial Reporting Framework provided by International Public Sector Accounting Standards (IPSAS) Board and Practices being followed in the country.
VI. Accounting for Non-current Tangible Assets:
Fundamental Concepts and Principles concerning Non-current Assets: Cost; Depreciable Amount; Depreciation; Fair Value; Property, Plant and Equipment; Residual Value; and Useful Life. Depreciation Methods and their Application (as specified by International Accounting Standards Board):Straight-line Method; Reducing Balance Method; Number of Units Produced and basic know-how of other Methods/Techniques being commonly used by the Industry.
VII. Fundamental and Technical Analysis of various Forms of Organizations:
Financial Statements’ Analysis including both Horizontal (Measuring Change) and Vertical (Ratio) Analysis including Liquidity Ratios, Activity Ratios, Debt Ratios, Profitability Ratios and Market Ratios; Technical and Industry Analysis.
(B) Cost and Managerial Accounting (50 Marks)
VIII. Fundamental Cost Accounting Principles and Concepts:
Nature and Scope of Cost and Managerial Accounting; Cost Concepts, Elements and Classification; Underlying Differences among Financial, Cost, and Management Accounting.
IX. Accounting for Material, Labour and Factory Overheads (FOH):
Recognition and Valuation Principles for Material Inventory, and Methods to control Material Inventory; Calculation/Measurement and Accounting for Payroll for all forms of Labour, Time Rate and Piece Rate Systems; Commonly used Group Incentive Schemes; Factory Overhead Costs and FOH Rate, Departmentalization of FOH Costs, their Allocation, Apportionment and Reapportionment (Primary and Secondary Distributions), Methods for Secondary Distribution including both Repeated Apportionment/Distribution and Algebraic Method.
X. Costing for Specific Jobs, and Process Costing:
Nature of a Specific Job, and Job-order Costing; Process Flow and Process Costing by the use of Cost of Production Report (CPR).
XI. Management Accounting for Planning, Decision-making and Control:
Budgeting and its Use:
Meaning and Nature of a Budget; Major Forms of a Budget including Production and Sales Budget, Cash Budget, Flexible Budgets, Zero-based Budget, Master Budget etc.
Difference between Marginal and Absorption Costing Techniques; Concept of Relevant Cost; Application and Use of Contribution Margin and other Concepts for Planning and Decision-making (under Break-even Analysis)
Meaning and Use of Standards and Variances; Major Classification of Variances including Material, Labour and FOH Variances, and their Computation.