ICWAI Syllabus : Intermediate Course
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
- Overheads — nature, collection and
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
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
Cost accounting records — cost ledgers, reconciliation of
cost and financial accounts; integrated accounts, basis of computerisation
- 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
- 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
- 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
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
- 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
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
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
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,
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
(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
- Powers of different authorities
- Impact of tax on GATT 94, WTO, Anti Dumping processing
- Tariff Commission and other Tariff authorities.
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.