ICWAI Syllabus : Intermediate Course
Paper 9: Management Accounting - Performance
Management (One Paper: 3 hours: 100 marks)
- General principles of management, management of change,
pattern of management.
- Business of performance measurement and performance
development e.g. Financial (ROI, RI, EPS, NPV etc.) and non-financial e.g.
Balanced Scorecard. Performance appraisal in Public Sector Enterprise
- Standard costing - setting of
standards, accounting under standard costing, costs and sales variances,
reconciliation of standard costs and profits with actual; interpretation and
investigation of variances – interrelationship, significance; planning and
operational variances; benchmarking, behavioural aspects in budgeting and
- Budgeting - planning, functional and
master budgets, time series and regression; "what if" analysis, controllable
and uncontrollable costs, responsibility budgeting – cost, profit and
investment centres and divisional performance measurement, residual income;
fixed and flexible budgeting, rolling budgets; performance, programming and
zero-based budgeting, activity-based budgeting. Report to Management with
suggested actions on deviations.
Principles of transfer pricing, transfer pricing systems - cost / standard
costs, cost / standard cost plus, market price, market price less savings.
- Allocation of resources - resource
planning systems - MRP I, MRP II and ERP; just in time, activity-based
costing, cost reduction, value analysis, total quality management.
Single, dual limiting factors for resource allocation, linear programming,
transportation. Queuing and simulation problems.
Multi-product CVP analysis including break-even, profit target, margin of
safety, P/V ratio, break-even charts, profit-volume graphs.
Paper 10: Advanced Financial Accounting (One Paper:
3 hours: 100 marks)
- Basics of Accounting principles, concepts and
conventions - measurement of business income; in-depth study of
accounting standards - national and international; US GAAP; valuation of
enterprise, valuation of inventories, goodwill and shares, buy back of
- Preparation of company accounts -
amalgamation, absorption, reconstruction and capital reduction, holding
companies, mergers, de-mergers, joint ventures and associates. Amalgamation
of firms, Conversion of firms into company.
Branch and departmental accounts - leasing, hire purchase
and instalment payments; royalty accounts - contract accounts; investment
Preparation of accounts from incomplete records - self-balancing ledger.
- Accounting Services in other
organisations - farm accounting, hotel accounting; accounting for
non-profit making organisations, e.g. accounting for hospital and
educational organisations, accounting for local self-government - rural and
Accounting for bank and insurance companies - accounting for loss of stock,
loss of profit and other compensations including marine insurance claims -
Electricity Company accounts, Software accounting as per IAS 2,7 and 9
- Government accounting in India -
general principles, comparison with commercial accounting; role of the
Comptroller and Auditor General of India and public accounts committee -
review of accounts.
Paper 11: Auditing (One Paper: 3 hours: 100 marks)
- Evolution of auditing - major
influences of auditing; nature and scope of auditing; basic concepts of
auditing; role of evidence in auditing; auditing techniques and practices -
generally accepted auditing standards; the concept of materiality in
- Verification of assets and liabilities -
fixed assets, investments, inventories, debtors, loans and advances, cash
and bank balances, debentures and creditors, provisions for taxation,
proposed dividend and gratuity - other items in the balance sheet;
verification of items in the profit and loss account; contingent
liabilities; disclosure of accounting policies, practice; expenditure during
the period of construction; adjustments for previous year - provisions of
the Companies Act, 1956 regarding accounts.
Nature of internal control, evaluation and audit of internal control -
internal control questionnaires; flow chart; systems audit, internal
Auditing-in-depth - statistical sampling in auditing. Use
of ratios and percentages for comparison and analysis trends - inter-firm
and intra-firm comparison.
- Appointment of statutory auditors -
auditors' remuneration, removal, rights of statutory auditors, duties of
statutory auditors, joint auditors, branch audits.
Audit report - report versus certificate, contents of the
reports, qualifications in the report.
Divisible profits - relevant provisions of the Companies
Act, 1956 and the Income-tax Act, 1961.
Interface between statutory auditor and internal auditor.
- Nature and scope of internal auditing -
financial versus operational audit; concepts of efficiency audit, propriety
audit, voucher audit, compliance audit, pre and post audits.
Impact of the Manufacturing and Other Companies (Auditors' Report) Order,
1988 on the internal auditing functions.
Organisation of the internal auditing function - selection and training of
staff-assignment of audit projects organisational status of the internal
auditing functions; scope for audit committees.
Planning the internal audit project: familiarisation; preparing checklist,
internal control questionnaires, audit programmes.
- Verification of evidence -
detailed checking versus sampling plans, statistical sampling as used in
internal auditing; flow chart techniques.
Internal control - nature and scope, internal auditor and
Field work - collecting evidences, interviews; memoranda.
Audit notes and working papers.
Audit reports - techniques of effective reporting; follow
up of audit report.
Summary reports of top management.
Communications in internal auditing - improving auditor-auditee
- Auditing the operations functions of an
enterprise - accounting and finance, inventory control,
procurement, production, marketing, maintenance, personnel, branches and
depots; research and development. Information systems audit, Internal
Auditor and the investigation of frauds. Auditing the internal auditing
- Audit of accounts prepared as per US GAAP.
- Secretarial Audit-checklist, contents of memorandum of
Association and articles of association, Issue of shares, Right issue,
Paper 12: Quantitative Methods (One Paper: 3 hours:
Mathematical Techniques (40 marks)
Algebra of vectors and matrices and determinants:
Addition, subtraction, multiplication and inversion of vectors and
matrices, solution of systems of linear equations with the help of matrix
Calculus: Variables, constants and
functions – graphs of functions – limits of algebraic functions, simple
differentiation of algebraic function – meaning of derivatives – evaluation of
first and second order derivatives, partial differentiation; solution of
problems involving maxima and minima of algebraic functions.
Integration (by substitution and by parts): Determining
indefinite and definite integrals for simple functions - application of
integration to evaluate areas and volume of solids and revolution.
Optimisation of functions under constraints, Linear
programming and simplex method of solution; other operations research methods
e.g. games theory, simulation, transportation, queuing, etc.
Statistical Techniques (30 marks)
Probabilities - meaning and definition of
probability, mutually exclusive and collectively exhausting events, repeated
trials, combinatorial analysis. Addition and multiplication rules. Bayes theorem
and its application.
Population and samples - sampling methods,
uses of random numbers, simulated sampling, concept of sampling distribution and
standard errors, confidence intervals for means and percentages, testing
hypothesis and uses of z, t, chi-square tests.
Decision making under risks and uncertainty; decision tree analysis.
Simple regression and correlation.
Economic Techniques (30 marks)
Demand analysis - the basis of demand,
market demand function, industry demand versus firm's demand; the demand curve;
relation between demand function and demand curve; change and shift in demand;
demand relation and managerial decisions; theory of consumer behaviour;
substitution and income effects; price, income and cross elasticities of demand,
other demand elasticities; time impact on elasticity; price elasticity for
derived products; revenue concepts; demand estimation.
Forecasting - forecasting methodologies.
Time series analysis, trend projection, barometric or leading indicator method;
index number analysis - composite and diffusion indices. Econometric models,
curve fitting and least square methods; correlation and regression analysis,
multiple and partial correlation - input-output analysis; forecasting with
input-output tables, criteria for forecasting demand for existing and new
Empirical production function analysis, empirical cost analysis, short and long
run cost estimation, factor demand, joint product and multi-product, factor
demand, joint product and multi-product firm, uncertainty in production
function, profit planning under risk & uncertainty.
Topics for Intermediate Stage II
- Standard costing as a means of control
- Responsibility accounting and divisional performance
measurement / development.
- Cenvat operations in Central Excise.
- Ratio Analysis for inter-firm comparison.
- Budgetary control and resource allocation.
- Changes in relation to Indirect Tax in the Central