SB014

Against each content of the syllabus, the given number shows the level of understanding
expected by the Institute.

The levels are explained as under:
Level 1

The competency of this level requires understanding and awareness of the subject matter and
related concepts. The candidates will be expected to have ability to understand the nature of
basic concepts.

Level 2

The competency of this level requires good understanding and detailed evaluation of the
subject matter and related concepts, along with the ability to apply concepts and skills in
simple professional scenario. The candidates will be expected to have ability to provide
reasonable support in professional judgment and decision making.

Level 3

The competency of this level requires in-depth understanding of the subject matter and related
concepts. The candidate will be expected to have ability to critically examine and evaluate all
concepts and available information to make firm professional judgments and make decisions.

Emile Woolf International v The Institute of Chartered Accountants of Pakistan
Assessment of Fundamental Competencies
Functional English

S

Syllabus objectives
and learning outcomes
ASSESSMENT OF FUNDAMENTAL COMPETENCIES
FUNCTIONAL ENGLISH
Objective
To ensure that candidates can communicate effectively in the English language.

Learning Outcome
On the successful completion of this paper candidates will be able to:
1 use vocabulary correctly
2 construct sentences using correct grammar
3 write meaningful essays and prcis and comprehend written English

Grid Weighting
English
Vocabulary 20
Practical use of Grammar 30
Composition and Comprehension (General) 50
Total 100

1
Functional English
Emile Woolf International vi The Institute of Chartered Accountants of Pakistan
Syllabus
Ref
Contents Level Learning Outcome
A English
a Vocabulary
1 Meanings and application of
vocabulary listed on "The
Oxford 3000- Seventh
Edition".
3 LO1.1.1: Use synonyms or antonyms
for the given words in a sentence.
LO1.1.2: Construct meaningful
sentences using the prescribed word
list.
b Practical use of Grammar
1 Rules of sentences 3 LO2.1.1: Understand and construct
declarative, interrogative, imperative,
exclamatory and optative sentences
LO2.1.2: Understand and construct
compound, complex, multiple and
conditional sentences
2 Phrases and idioms 3 LO2.2.1: Construct meaningful
sentences using commonly used
phrases and idioms
3 Tenses 3 LO2.3.1: Understand and apply rules of
tenses in sentences
4 Direct and indirect speech 3 LO2.4.1: Change sentences from direct
to indirect and from indirect to direct
speech
5 Active and passive voice 3 LO2.5.1: Change of sentences from
active to passive voice and from
passive to active voice

c Composition and
Comprehension (General)

1 Essay Writing 3 LO3.1.1: Write essays on topics
generally known to a school leaver
2 Prcis Writing 3 LO3.2.1: Write meaningful and effective
prcis
3 Comprehension and speed
reading
3 LO3.3.1: Comprehend a brief write up
and answer questions based on that
write up
LO3.3.2: Assimilate the contents of a
lengthy write up and answer questions
based on that write up

2

Business Communication

S

Syllabus objective
BUSINESS COMMUNICATION
Objective
To ensure that candidates can communicate effectively while performing their professional
responsibilities.

Learning Outcome
1 Comprehend concepts of business communication
2 Demonstrate awareness of listening skills concepts
3 Write simple business letters and short reports
4 Understand the utility of the internet with respect to business communication

Grid Weighting
Concepts 20
Listening skills 20
Business messages and report writing 40
Communication via the internet 20
Total 100

3
Business Communication
Syllabus
Ref
A Business Communication
a Concepts
1 Introduction to business
communication

3 LO1.1.1: Define business
communication
LO1.1.2: Describe with simple
examples the goals, patterns (formal
and informal) and channels of business
communication
2 Communication process 1 LO1.2.1: Define communication
process
LO1.2.2: Explain and illustrate the
components of the communication
process, namely: context, sender,
message, medium, recipient, feedback
3 Seven Cs of effective
communication
3 LO1.3.1: Describe with simple
examples the seven Cs of effective
communication
LO1.3.2: Identify weakness in a given
simple communication applying the
Seven Cs concept and suggest
corrections
b Listening skills
1 Meaning, types and barriers
to listening
3 LO2.1.1: Explain why listening is
important in good business
communication.
LO2.1.2: Describe types and barriers to
listening

4
Syllabus and study guide
t s n I e h T i i v l a n o i t a n r e t n I f l o o W e l i m E itute of Chartered Accountants of Pakistan
c
Business messages
1 Business letters and
circulars
2 LO3.1.1: Classify the type of business
letters and circulars
LO3.1.2: Draft simple business letters
and circulars
2 Persuasive letters and
circulars
2 LO3.2.1: Explain the salient features of
the persuasive letters and circulars
LO3.2.2: Draft simple persuasive letters
and circulars
3 Short business reports 2 LO3.3.1: State the meaning and
purpose of a short business report
LO3.3.2: Describe with examples the
common sections of a short business
report
LO3.3.3: Draft a simple business report
d Communication via the
internet
1 Website hosting (types and
services)
1 LO4.1.1: State meaning, types and
services of web hosting
2 Features, benefits and
limitations of email
1 LO4.2.1: State the main features of
email.
LO4.2.2: Enlist the benefits and
limitations of email
3 Features, benefits and
limitations of video
conferencing
1 LO4.3.1: State the main features of
video conferencing
LO4.3.2: Enlist the benefits and
limitations of video conferencing

5

Emile Woolf International ix The Institute of Chartered Accountants of Pakistan
Quantitative Methods

S

Syllabus objectives
QUANTITATIVE METHODS
Objective
To develop the ability to apply quantitative methods and statistics to business problems.

Learning Outcome
On completion of this paper the candidate will be able to:
1 Understand basic mathematics to build a base for financial analysis and transform
business problems into mathematical equations;
2 Apply financial mathematics to solve business problems;
3 Analyse business solutions and identify feasible, alternative optimum and
unbounded solutions using graphical methods;
4 Evaluate maximised profit, minimised cost and feasible manufacturing quantity by
using calculus;
5 Analyse production planning cases and formulate solutions using matrices;
6 Present collected data using diagrams, charts and graphs and evaluate common
measures of dispersion and central tendencies;
7 Evaluate the impact of inflation and rebase numbers using indices:
8 Use statistical methods in analyzing historical data for decision making and
estimating future outcomes.
9 Explain and apply probability theory
10 Explain sampling and explain and carry out tests of significance
6
Emile Woolf International x The Institute of Chartered Accountants of Pakistan
Grid Weighting
Mathematics
Basic mathematics 10
Financial mathematics 20
Calculus 10
Matrices and determinants 10
Statistics
Statistical methods 20
Methods of least square and regression 10
Probability and probability distribution 10
Sampling and decision making 10
Total 100

7
Syllabus objectives and learning outcomes
Emile Woolf International xi The Institute of Chartered Accountants of Pakistan
Mathematics
Basic mathematics
Exponential and logarithmic
functions
2 LO1.1.1: Demonstrate adequate knowledge
of laws of logarithm.
LO1.1.2: Make use of logarithms in solving
business problems.
LO1.1.3: Perform calculations involving
exponential and logarithmic functions.
LO1.1.4: Analyse the behaviour of business
problems involving exponential and
logarithmic functions.
Equation of straight line 2 LO1.2.1: Demonstrate adequate
understanding of various forms of the
equation of a straight line.
Application of straight line in
business and economics
2 LO1.3.1: Identify business situations where
the equation of a straight line could be used.
LO1.3.2: Use the equation of a straight line
in relevant business problems.
Simultaneous equation- linear and
quadratic
2 LO1.4.1: Demonstrate adequate command
of solving simple equations, including two
variable simultaneous equations and
quadratic equations.
Coordinate system 2 LO1.5.1: Demonstrate understanding of the
coordinate system and be able to prepare
graphs of linear equations.
System of linear inequalities and
their graphical presentation
2 LO1.6.1: Demonstrate an understanding of
linear inequalities.
LO1.6.2: Demonstrate the graphical
presentation of linear inequalities.
Factorisation of equations including
factorisation by completion of
squares
2 LO1.7.1: Perform multiplication and division
operations on linear and quadratic
equations.
LO1.7.2: Solve quadratic equations by
factoring and by completing the square
method.

8
Emile Woolf International xii The Institute of Chartered Accountants of Pakistan
Mathematics
Basic mathematics (continued)
Arithmetic progression 2 LO1.8.1: Identify situations where data is in
arithmetic progression.
LO1.8.2: Use arithmetic progression in
business problems to calculate monthly
instalments, first instalment, total amount
paid and total time required for settlement of
a loan etc.
Geometric progression 2 LO1.9.1: Use geometric progression in
relevant situations.
Financial mathematics
Simple interest 2 LO2.1.1: Calculate interest value using
simple interest.
Compound interest 2 LO2.2.1: Calculate interest value using
compound interest.
Present value 2 LO2.3.1: Calculate the present value of a
future cash sum using both a formula and
tables.
LO2.3.2: Calculate the net present value
(NPV) of a project.
LO2.3.3: Use NPVs to choose between
mutually exclusive projects..
Future values 2 LO2.4.1: Calculate future values using both
simple and compound interest.
Annuities 2 LO2.4.1: Calculate the present value of an
annuity using both a formula and tables.
Internal rate of return 2 LO2.4.1: Explain with examples the use of
the internal rate of return of a project.
Interpolation and perpetuities 2 LO2.4.1: Calculate the present value of a
perpetuity.

9
Emile Woolf International xiii The Institute of Chartered Accountants of Pakistan
Mathematics
Linear programming
Graphical solution to linear
programming problems involving
redundant constraints, bounded
and unbounded feasible regions,
no feasible solution and alternative
optimum solution
2 LO3.1.1: Demonstrate adequate expertise
in transforming a business problem into a
system of linear programming.
LO3.1.2: Identify constraints and cost
minimization or profit maximization
functions.
LO3.1.3: Identify the redundant constraint.
LO3.1.4: Use the Corner Point Theorem.
LO3.1.5: Prepare a graphical solution of a
linear programming problem.
LO3.1.6: Analyse a graphical solution and
identify whether it has a bounded or an
unbounded feasible region or no feasible
solution at all.
LO3.1.7: Analyse the solution of a linear
programming problem and identify
alternative and optimum solutions, if any
exist.
Calculus
Rules for differentiation- Sum,
difference, product and quotient
rules of differentiation
2 LO4.1.1: Demonstrate an adequate
understanding of rules of differentiation.
Marginal function, calculation of
revenue, cost and profit of marginal
unit
2 LO4.2.1: Make use of differentiation
techniques in determining marginal
functions.
LO4.2.2: Calculate revenue, cost and profit
of a marginal unit using differentiation
techniques.
Use of second order derivatives;
maxima, minima and point of
inflexion.
2 LO4.3.1: Demonstrate the application of
second order derivatives in calculating
maxima, minima and the point of inflexion.

10
Emile Woolf International xiv The Institute of Chartered Accountants of Pakistan
Mathematics
Matrices and determinants
Fundamentals of matrices,
addition, subtraction, multiplication,
inverse of matrices
2 LO5.1.1: Demonstrate an adequate
knowledge of matrix algebra (addition,
subtraction and multiplication).
LO5.1.2: Calculate the determinant, adjoint
and inverse of a matrix.
LO5.1.3: Make use of the properties of
determinants while calculating
determinants.
Solution of simultaneous linear
equations using Cramers Rule and
Matrix Inverse Method
2 LO5.2.1: Represent simultaneous linear
equations in matrix form.
LO5.2.1: Solve simultaneous linear
equations using Cramers Rule and Matrix
Inverse Method.

11
Emile Woolf International xv The Institute of Chartered Accountants of Pakistan
Statistics
Presentation and use of data
Collection and tabulation of data 2 LO6.1.1: Classify different types of data.
LO6.1.2: Perform data collection through
various methods.
LO6.1.3: Organise and summarise data and
present it as a frequency distribution.
Presentation through graphs,
charts and diagrams, including
stem and leaf display, box and
whisker plot.
2 LO6.2.1: Present data using a simple bar
chart, a multiple bar chart and a component
bar chart.
LO6.2.2: Construct pie charts, histograms,
frequency polygons, ogives, stem and leaf
displays and box and whisker plots.
LO6.2.3: Analyse graphical representations
of data.
Measures of central tendencies
and measures of dispersions.
2 LO6.3.1: Calculate various measures of
central tendency such as mode, median,
arithmetic, geometric and harmonic means.
LO6.3.2: Analyse the advantages and
disadvantages of various central tendency
measures.
LO6.3.3: Identify the characteristics and
measures of dispersion.
LO6.3.4: Use measures of dispersion, such
as standard deviation or variance, to
ascertain the degree of variation or
variability in a distribution.
Index numbers
Index numbers, weighted index
numbers, concept of purchasing
power and deflation of income.
2 LO7.1.1: Define the index number and its
types.
LO7.1.2: Use different formulae/methods to
calculate various types of index number.
LO7.1.3: Analyse the uses and limitations of
index numbers. For example, use index
numbers to deflate or inflate a series and
explain the result.

12
Emile Woolf International xvi The Institute of Chartered Accountants of Pakistan
Methods of least square and
regression

Scatter diagram, linear relationship,
simple linear regression lines by
method of least square.
2 LO8.1.1: Demonstrate an understanding of
scatter diagrams, including their
construction, uses and limitations.
LO8.1.2: Demonstrate an understanding of
the basic concept of regression lines and
how they are used.
LO8.1.3: Use least squares linear
regression to construct a regression line
(line of best fit).
LO8.1.4: Analyse regression lines.
LO8.1.5: Use a regression line to calculate
a forecast of the value of a dependent
variable where given the value of an
independent variable.
Simple linear correlation 2 LO8.2.1: Demonstrate an understanding of
the basic concept of correlation coefficient
analysis.
Coefficient of correlation and
determination
2 LO8.3.1: Calculate and analyse coefficients
of correlation and determination.
Rank correlation 2 LO8.4.1: Define rank correlation.
LO8.4.2: Calculate the rank correlation
coefficient between two sets of data and
explain the value.
Probability and probability
distribution

Counting techniques 2 LO9.1.1: Use counting techniques, like the
mn counting rule and factorials for
calculating, for example, a total number of
outcomes.
LO9.1.2: Use permutations and
combination to calculate the total number of
possible selections from a set of data.
Probability 2 LO9.2.1: Understand the definition of
probability and other basic terms as well as
their applications.

13
Emile Woolf International xvii The Institute of Chartered Accountants of Pakistan
Probability and probability
distribution (continued)

Addition law for mutually exclusive
and not mutually exclusive events.
2 LO9.3.1: Use the addition rule while
calculating probabilities.
LO9.3.2: Identify the difference between
mutually exclusive and non-mutually
exclusive events.
Multiplicative laws for dependent
and independent events.
2 LO9.4.1: Identify the difference between
dependent and independent events.
LO9.4.2: The Use multiplication rule while
calculating conditional probabilities.
Binomial distribution 2 LO9.5.1: Account for the assumptions that
underlie the Binomial distribution.
LO9.5.2: Demonstrate the use of Binomial
distribution to calculate probabilities.
Poisson distribution 2 LO9.6.1: Account for the properties of the
Poisson distribution.
LO9.6.2: Demonstrate the use of the
Poisson distribution to calculate
probabilities.
Hyper-geometric distribution 2 LO9.7.1: Identify situations where Hyper-
geometric distribution could be used.
LO9.7.2: Demonstrate the use of Hyper-
geometric distribution to calculate
probabilities.
Normal distribution 2 LO9.8.1: Demonstrate the use of normal
distribution including the use of tables.
LO9.8.2: Demonstrate the application of the
normal distribution to calculate probabilities.
Sampling and decision making
Simple random sampling 2 LO10.1.1: Understand the terms, population
and sample.
LO10.1.2: Explain methods for selecting a
simple random sample.
Sampling distribution of mean 2 LO10.2.1: Define and construct a sampling
distribution of the sample means.
LO10.2.2: Calculate the mean and standard
deviation of a sampling distribution of
sampling means.

14
Emile Woolf International xviii The Institute of Chartered Accountants of Pakistan
Sampling and decision making
(continued)

Standard error of mean 2 LO10.3.1: Calculate standard error of
mean.
Sampling with and without
replacement
2 LO10.4.1: Select an appropriate sampling
technique for calculating the probabilities of
sample means.
Testing of hypothesis for population
means, difference between
population means and population
proportion and difference between
two population proportions
2 LO10.5.1: Demonstrate the use of
hypothesis testing, significance testing and
testing a hypothesis.
LO10.5.2: Perform hypothesis test of
populations means based on small and
large samples
LO10.5.3: Perform hypothesis tests of the
difference between two population means
based on small and large samples
LO10.5.4: Perform hypothesis tests of the
difference between two population
proportions
LO10.5.5: Select appropriate distributions
i.e., z or t for constructing a confidence
interval for a population mean
Single population variance based
on test of Chi-square.
2 Use the Chi-square distribution to perform
tests of goodness of fit and independence.
Confidence interval for estimating
population means, proportions and
variance, and differences between
proportions means, proportions and
variance.
2 LO10.7.1: Construct the confidence interval
for population means and difference of
means.
LO10.7.2: Construct the confidence interval
for population means and difference of
proportion and variance.
Problems of determination of
sample size for the study of
population mean and proportion.
2 LO10.8.1: Calculate a sample size for an
interval estimate of a population mean.
LO10.8.2: Calculate a sample size for an
interval estimate of a population proportion.

15

Introduction to Information Technology

S

Syllabus objective
INTRODUCTION TO INFORMATION TECHNOLOGY
Objective
To enable candidates to equip themselves with the fundamental skills and proficiency
required to cope with todays highly challenging IT oriented business environment.

Learning Outcome
The candidates will be able to:
LO1 describe and classify different elements of a computer system
LO2 describe the basic operations in commonly used operating systems
LO3 demonstrate performance level knowledge in Microsoft Excel
LO4 demonstrate performance level knowledge in Microsoft Word
LO5 demonstrate performance level knowledge in Microsoft PowerPoint

Grid Weighting
A. Computer hardware and types of operating system 10
B. Microsoft Excel 40
C. Microsoft Word 30
D. Microsoft PowerPoint 20
Total 100
16
Syllabus
Ref
A
Computer hardware and
operating systems

1 Central processing units
(CPUs) processor, hard
disk, random access
memory, read-only memory
1 LO1.1.1
Explain the role and importance of
basic components of a CPU
2 Input devices Key board,
mouse, touch pads, Scanner
1 LO1.2.1
State the uses and limitations of
common input devices
3 Output devices monitor,
printer
1 LO1.3.1
State the differences between CRT and
LCD/LED monitors
LO1.3.2
Classify different types of printers and
state their relative advantages and
limitations
4 Operating systems DOS,
Windows, Linux
1
LO2.1.1
State key operating system commands
used for efficient searches, formatting
disks, viewing IP configurations, testing
network connections and exploring the
network
5 Core Windows tasks
customize desktop and start
menus, work with files and
folders, log-on and log-off,
search for information, lock
the computer, use a screen-
saver password, reset a
password
1
LO2.2.1
State methods for customizing desktop
presentation and the start menu
LO2.2.2
Define techniques to work efficiently
with files and folders
LO2.2.3
State efficient ways to search for
required information from active and
archive files
LO2.2.4
State the important information that
could be recorded whilst a user is
logged-in
LO2.2.5
Define basic controls and practices that
should be adopted by users for
safeguarding of data stored in
computers
17
Syllabus objective and learning outcomes
Emile Woolf International vii The Institute of Chartered Accountants of Pakistan
Syllabus
Ref
B

Microsoft Excel
1 Application of basic built-in
functions and formulae like
Sumif, Count, IF, Vlookup,
Average, Sub-total
2 LO3.1.1
Demonstrate adequate command of
and perform Sumif, Count, Vlookup,
Average and Subtotal functions
LO3.1.2
Demonstrate effective use of functions
such as IF, AND, OR
2 Creating and modifying
customized data formats
2 LO3.2.1
Use appropriate Excel features to
create customized data formats for
storing currency and phone numbers
LO3.2.2
Modify existing data formats to enhance
readability
3 Using conditional formatting 2 LO3.3.1
Use the conditional formatting feature
to highlight exceptions
4 Protecting cells, worksheets
and workbook
2 LO3.4.1
Perform the steps to protect certain
cells, individual worksheets and an
entire workbook
5 Merging workbooks 2 LO3.5.1
Perform the steps to share a workbook
LO3.5.2
Perform the steps to merge multiple
copies of a shared workbook
6 Importing and exporting data
to and from Excel
2 LO3.6.1
Export data from Excel to other
applications and in other formats
LO3.6.2
Import data to Excel from other
applications and in other formats
7 Creating and editing
templates
2 LO3.7.1
Demonstrate adequate knowledge in
creating and editing Excel templates
18
Emile Woolf International viii The Institute of Chartered Accountants of Pakistan
Syllabus
Ref
C Microsoft Word
1 Creating custom style for
text, tables and lists
2 LO4.1.1
Use various Word features to present
letters, reports and other documents in
a presentable custom style
LO4.1.2
Select an appropriate pre-defined table
style for improved presentation
2 Sorting contents in lists and
tables
2 LO4.2.1
Use Words built-in features to sort
contents saved in tables
3 Modifying table formats 2 LO4.3.1
Use formatting tools to improve
readability of data in tables
4 Creating and modifying a
table of contents
2 LO4.4.1
Identify the basic formatting
requirements to insert a table of
contents
LO4.4.2
Demonstrate performance level
knowledge to insert and modify a table
of contents
5 Inserting and modifying
endnotes, footnotes,
captions & cross references
2 LO4.5.1
Demonstrate performance level
knowledge to insert and modify
endnotes, footnotes, captions & cross
references
D Microsoft PowerPoint
1 Creating new presentations
from templates
2 LO5.1.1
Select a template from PowerPoints
sample templates to construct simple
presentations
2 Inserting and editing text-
based content
2 LO5.2.1
Perform inserting and editing of text
based content
3 Inserting, and editing tables,
charts, diagrams, pictures,
shapes, graphs and objects
2 LO5.3.1
Demonstrate performance-level
knowledge of inserting and editing
tables, charts and other objects in the
presentation
LO5.3.2
Use appropriate PowerPoint features to
insert pictures, videos, graphs and
other objects in the presentation
19
Syllabus
Ref
4 Applying slide transitions 2 LO5.4.1
Demonstrate performance-level
knowledge whilst applying meaningful
slide transitions

20

Certificate in Accounting and Finance
Introduction to accounting

S

Syllabus objective
CERTIFICATE IN ACCOUNTING AND FINANCE
INTRODUCTION TO ACCOUNTING
Objective
To enable candidates to equip themselves with the fundamental concepts of accounts
needed as a foundation for higher studies of accounting.

Learning Outcome
1 understand the nature of accounting, elements of accounts and double entry rules.
2 identify financial transactions and make journal entries.
3 prepare general ledger accounts and a trial balance.
4 make period end adjustments prior to the completion of financial statements
5 prepare basic financial statements
6
prepare partnership accounts and account for transactions of admission,
retirement etc.

Grid Weighting
Introduction to accounting and book keeping 40
Adjustments prior to completion of financial statements 20
Preparation of final accounts of sole traders 20
Accounting for partnerships 20
Total 100
21
and bookkeeping

Meaning of business 1 LO1.1.1: Explain the characteristic of a
business
LO1.1.2: Classify transactions that fall under
the definition of business transactions
Mode of business organization
(meaning) - sole proprietorship;
partnership; limited company
1 LO1.2.1: Describe the key features of sole
proprietorship, partnership and limited
company
LO1.2.2: Differentiate the features of sole
proprietorship, partnership and limited
company
Fundamental accounting
concepts - accrual, consistency,
true and fair view, materiality,
prudence, completeness, going
concern, substance over form
2 LO1.3.1: Describe and illustrate the main
concepts, namely, accrual, consistency, and
completeness
LO1.3.2: Demonstrate familiarity with the
concepts of true and fair view, materiality,
prudence, going concern and substance over
form
LO1.3.3: Apply the concepts of accrual,
consistency and completeness to simple and
well explained circumstances.
Financial statements-
components, responsibility,
presentation, users
1 LO1.4.1: List the components of a set of
financial statements.
LO1.4.2: Explain the characteristics and
purpose of the statement of financial position
and the statement of comprehensive income.
LO1.4.3: Identify the responsibility to prepare
and present financial statements
LO1.4.4: Describe the basic presentation
layout of statements of financial position and
statements of comprehensive income.
LO1.4.5: Identify users of financial
information and describe how the information
is useful to them

22
Bookkeeping
Elements of financial
statements (meaning) - Assets,
liabilities, equity, income,
expense
2 LO2.1.1: Define and give examples of
assets, liabilities, equity, income and
expenses
LO2.1.2: Apply the underlying concepts of
assets, liabilities, income and expenses in
simple and well explained circumstances.
Chart of accounts 1 LO2.2.1: Understand the meaning of a chart
of accounts
LO2.2.2: Explain the purpose of
establishing a chart of accounts
LO2.2.3: Construct a chart of accounts
using given data
Double entry system,
accounting equation and rules
of debit and credit
2 LO2.3.1: Understand and apply, the
accounting equation (Assets =Liabilities +
Equity) in simple practical and common
scenarios
LO2.3.2: identify financial and non-financial
transactions in a well defined scenario
LO2.3.3: Understand and apply the concept
of double entry accounting to simple and
common business transactions
General journal 2 LO2.4.1: List and describe the basic
contents of the general journal
LO2.4.2: prepare and use the general
journal to record journal entries
Sales journal and the sales
ledger
2 LO2.5.1: Describe the basic contents of the
sales day book and the customer/debtors
ledger
LO2.5.2: record entries in the sales day
book and the customer/debtors ledger.
Purchase journal and the
purchase ledger
2 LO2.6.1: Describe the basic contents of the
purchase journal and purchase
ledger/creditors ledger.
LO2.6.2: record entries in the purchase
journal and purchase ledger/creditors
ledger.

23
General ledger and trial
balance

General ledger 2 LO3.1.1: Describe the main features of the
general ledger
LO3.1.2: Post entries in the general ledger
Trial balance 2 LO3.2.1: Understand the purpose of the trial
balance
LO3.2.2: Understand and demonstrate
mapping between general ledger balances
and the trial balance
LO3.2.3: Identify the limitations of a trial
balance.
Adjustments before final
accounts

Straight line, diminution
balance, sum-of-years-digit,
number of units produced
methods and recording of
depreciation on fixed Assets
2 LO4.1.1: Calculate depreciation expense
using straight line, diminution balance, sum-
of-digits and number of units produced
methods
LO4.1.2: Post journal entry to record
depreciation expense
Allowance for bad debts and
write off
2 LO4.2.1: Estimate allowance for bad debts
based on a given policy
LO4.2.2: Post journal entry to record bad
debt expense
LO4.2.3: Compute and record write off and
understand its impact on allowance for bad
debts.
Prepayments and accruals 2 LO4.3.1: Understand the matching concept
that applies to prepayments and accruals.
LO4.3.2: Post journal entries and ledger
entries for prepayments and accruals.
LO4.3.3: Post adjusting entries to recognize
revenues or expenses

24
accounts (continued)

Closing entries of inventory 2 LO4.4.1: Understand the concepts of
periodic and perpetual inventory system
LO4.4.2: Identify the need to post the
adjustment entries of inventory at the end of
the period in case of periodic inventory
system.
LO4.4.3: Pass the adjusting entries and
ledger entries at the end of the period.
Bank reconciliation and related
adjustments
2 LO4.5.1: Understand the need for a bank
reconciliation
LO4.5.2: Identify the main reasons for
differences between the cash book and
bank statements.
LO4.5.3: Prepare a bank reconciliation
statement in the circumstance of simple and
well explained transactions.
LO4.5.4: Correct cash book errors and post
journal entries after identifying the same in
bank reconciliation statement.
Control accounts - reconciliation
and adjustments
2 LO4.6.1: Understand the mapping between
control accounts and subsidiary ledger for
accounts receivable and accounts payable.
LO4.6.2: Prepare control accounts and
subsidiary ledger from well explained
information provided.
LO4.6.3: Perform control accounts
reconciliation for accounts receivable and
accounts payable.
LO4.6.4: Identify errors after performing
reconciliation
LO4.6.5: Identify and correct errors in
control account and subsidiary ledgers.

25
accounts (continued)

Correction of errors in record
keeping

2 LO4.7.1: Identify the types of error which
may occur in a record keeping system
LO4.7.2: Calculate and understand the
impact of errors on the financial statements
within a reporting period
LO4.7.3: Prepare journal entries to correct
errors that have occurred within a reporting
period
Preparation of final accounts
of a sole trader

Statement of financial position 2 LO5.1.1: Understand the purpose of the
statement of financial position
LO5.1.1: Prepare simple statements of
financial position from information provided.
Statement of comprehensive
income
2 LO5.1.1: Understand the purpose of the
statement of comprehensive income
LO5.1.1: Prepare simple statements of
comprehensive income from information
provided
Receipt and payment accounts 2 LO5.1.1: Understand the purpose of a
receipts and payments account.
LO5.1.1: Prepare a simple receipts and
payments account from information
provided.

26
Accounting for partnerships
Preparation of partnership
accounts
2 LO6.1.1: Define a partnership and state its
essential elements
LO6.1.1: Understand goodwill
LO6.1.1: Prepare
Capital account
Current account
LO6.1.1: Prepare a profit and loss account
and a statement of financial position of a
partnership.
Admission and amalgamation 2 LO6.1.1: Process the necessary
adjustments on the admission of a new
partner, namely:
Revaluation of assets and liabilities of
the firm
Treatment of goodwill
Application of new profit sharing ratio
LO6.1.1: Prepare the nominal accounts,
profit and loss account and statement of
financial position upon amalgamation of two
partnerships.
Retirement, death, dissolution,
liquidation
2 LO6.1.1: Make journal entries in the case of
the dissolution of a partnership to record:
transfer and sale of assets and
liabilities to third parties and partners,
payment of realization expenses,
closing of the realization account and
settlement of partners capital account.
LO6.1.1: Process the necessary
adjustments on the death or retirement of a
partner:
adjustments relating to goodwill,
accumulated reserves and
undistributed profits
revaluation account
adjustment and treatment of partners
capital;
application of new profit sharing ratio

27

n a t s i k a P f o s t n a t n u o c c A d e r e t r a h C f o e t u t i t s n I e h T v l a n o i t a n r e t n I f l o o W e l i m E
Introduction to economics and finance

S

Syllabus objective
INTRODUCTION TO ECONOMICS AND FINANCE
Objective
To enable candidates to equip themselves with the fundamental concepts of economics
and finance needed as foundation for higher studies of finance.

Learning Outcome
The candidate will be able to:
1 Understand the nature of micro-economics and its basic concepts.
2
Understand the nature of macro-economics and its relation with the measurement
of economic growth.
3 Understand how the balance of payments of a country is worked out.
4 Understand the nature of banking systems
5 Understand the basic function of financial markets.

28
Grid Weighting
Concepts of economics 10
Microeconomics 30
Macroeconomics 30
Introduction to banking system, financial markets and
international trade 30
Total 100
Syllabus
Ref
A Concepts of economics
1 The economic problem -
wants, resources, scarcity
1 LO1.1.1: Describe, with examples, the
economic problem
LO1.1.2: Discuss the production
possibility curve
2 Economic systems -
planned, market and mixed
economies
1 LO1.2.1: Describe the functions of an
economic system
LO1.2.2: Explain the features of
planned, mixed and market economies
LO1.2.3: Provide example of a mixed
economy, a planned economy and a
market economy
LO1.2.4: Describe the shortfalls of a
market economy
3 Islamic economic system 1 LO1.3.1: Describe the main features of
the Islamic economic system
B Microeconomics
1 Microeconomics nature 2 LO2.1.1: Define micro economics and
discuss its scope
2 Demand and supply 2 LO2.2.1: Define law of demand and
explain its assumptions and limitations
LO2.2.2: Define law of supply and
explain its assumptions
3 Equilibrium of demand and
supply
2 LO2.3.1: Explain the determination of
price by equilibrium of demand and
supply
LO2.3.2: Explain the effect of changes
in demand and supply
LO2.3.3: Discuss the determination of
price of perishable and durable goods
29
Syllabus
Ref
4 Elasticity of demand and
supply
2 LO2.4.1: Define elasticity of demand
and briefly explain the measurement of
price, income and cross elasticity of
demand
LO2.4.2: Describe the determinants of
the elasticity of demand
LO2.4.3: Define elasticity of supply and
briefly explain the percentage and
graphical methods of measurement of
elasticity of supply
LO2.4.4: Describe the determinants of
supply elasticity
5 Utility analysis and
indifference curve
2 LO2.5.1: Explain the law of diminishing
marginal utility and discuss its
assumptions and limitations
LO2.5.2: Discuss the meaning and
characteristics of indifference curves
LO2.5.3: Explain consumers
equilibrium through indifference curve
analysis
6 Cost and revenue curves 2 LO2.6.1: Discuss short run curves of
total cost, total fixed cost, total variable
cost, average cost and marginal cost
LO2.6.2: Derive a long run average
cost curve from a short run average
cost curve
LO2.6.3: Derive a long run marginal
cost curve
LO2.6.4: Discuss revenue curves under
perfect and imperfect competition
7 Equilibrium of firm short and
long term under perfect
competition, monopoly,
oligopoly and monopolistic
conditions
2 LO2.7.1: State the features of perfect
and imperfect competition
LO2.7.2: Discuss the short and long
run equilibrium of firms under perfect
and imperfect competition
30
Syllabus
Ref
8 Laws of increasing and
diminishing returns
2 LO2.8.1: Explain the law of increasing
returns and its application and
assumptions
LO2.8.2: Explain the law of diminishing
returns and its application and
assumptions
C Macroeconomics
1 Measurement of national
income including knowledge
of basic concepts like GDP,
GNP, NNP;
2 LO3.1.1: Define gross national product,
gross domestic product and net
national product
LO3.1.2: Explain the product approach,
income approach and expenditure
approach to the measurement of
national income
2 Consumption, saving and
investment functions;
2 LO3.2.1: Understand the meaning of
consumption and saving and its
relationship with the income
LO3.2.2: Identify how Keynes
Psychological law of consumption
explains the relationship between
consumption and income with the help
of average propensity to consume and
marginal propensity to consume curves
LO3.2.3: Understand the determinants
of the consumption function
LO3.2.4: Understand the stability of
consumption and saving functions in
the short run and discuss the reasons
thereof
LO3.2.5: Understand the meaning of
investment, induced investment and
autonomous investment
LO3.2.6: Explain the relationship of
investment with marginal efficiency of
capital and interest rate.
3 Marginal propensity to
consume and save
2 LO3.3.1: Discuss the marginal
propensity to consume and save
31
t s n I e h T x i l a n o i t a n r e t n I f l o o W e l i m E itute of Chartered Accountants of Pakistan
Syllabus
Ref
4 Multiplier and accelerator; 2 LO3.4.1: Comprehend the effect of the
multiplier on the level of national
income
LO3.4.2: Understand the assumptions
which underlie the multiplier concepts
LO3.4.3: Comprehend the principle of
acceleration of derived demand
LO3.4.4: Understand how the multiplier
and accelerator interact
5 Money and its value LO3.5.1: Understand the main
functions of money
LO3.5.2: Understand credit money and
its advantages and disadvantages
LO3.5.3: Understand sources of the
money supply
LO3.5.4: Understand the quantity
theory of money
LO3.5.5: Understand the measurement
of the value of money
LO3.5.6: Understand inflation and its
kinds
LO3.5.7: Understand the causes of
inflation and measures for overcoming
inflation
6 Growth and recession 2 LO3.6.1: Understand different phases
of the business cycle
LO3.6.2: Understand the indicators of
growth and recession
7 Fiscal budget 2 LO3.7.1: Explain the objectives of fiscal
policy and how they are achieved
through fiscal budgets
8 Direct and indirect taxation 2 LO3.8.1: Define direct and indirect
taxation
LO3.8.2: Explain the advantages and
disadvantages of direct taxation
LO3.8.3: Explain the advantages and
disadvantages of indirect Taxation
32
Syllabus
Ref
D Introduction to banking system, financial markets and international trade
Banking system
1 Credit formation by banks 1 LO5.1.1: Explain the process of
creation of credit money by the banks
LO5.1.2: Discuss the limitations on the
creation of credit
2 Role of Central Bank; 1 LO5.2.1: Describe the functions of a
central bank
3 Monetary policy 1 LO5.3.1: Understand the meaning of
monetary policy
LO5.3.2: Understand the objectives of
monetary policy and the mutual conflict
of the objectives
4 Types of banks and financial
institution
1 LO5.4.1: Define a bank and describe
different kind of banks
Financial instruments and market-Meaning
1 Shares, debentures, bonds,
futures, options, cap, floor,
collar, swaps, forward
1 LO6.1.1: Describe the main features of
shares, debentures, bonds, futures,
options, cap, floor, collar, swaps,
forward
2 Money market 1 LO6.2.1: Describe the main features of
money markets
3 Capital markets. 1 LO6.3.1: Describe the main features of
capital and capital markets
4 Derivative market LO6.4.1: Describe the main features of
derivatives and derivative markets
International trade
1 Balance of trade and
payment
2 LO4.1.1: Understand the nature of
items that are included in balance of
trade and payment
LO4.1.2: Understand the different parts
of balance of payment

33

Financial accounting and reporting I

S

Syllabus objective
FINANCIAL ACCOUNTING AND REPORTING I
Objective
To provide candidates with an understanding of the fundamentals of accounting theory and
basic financial accounting with particular reference to international pronouncements.

Learning Outcomes
1 prepare financial statements in accordance with specified international
pronouncements.
2 account for simple transactions related to inventories and property, plant and
equipment in accordance with international pronouncements.
3 understand the nature of revenue and be able to account for the same in
accordance with international pronouncements.
4 prepare financial statements in accordance with specified international
pronouncements.

34
Contents Level Learning Outcomes
Preparation of components
of financial statements with
adjustments included in the
syllabus

Preparation of statement of
financial position (IAS 1)
1 LO1.1.1: Prepare simple statement of financial
position in accordance with the guidance in
IAS 1 from data and information provided
comprehensive income (IAS 1)
1 LO1.2.1: Prepare simple statement of
comprehensive income in accordance with the
guidance in IAS 1 from data and information
provided
cash flows (no format
specified)
1 LO1.3.1: Compute items which are presented
on the statement of cash flows
LO1.3.2: Prepare a statement of cash flows
under any standard method
Income and expenditure
account
2 LO1.4.1: Prepare simple income and
expenditure account using data and
information provided
Preparation of accounts from
incomplete records
2 LO1.5.1: Understand situations that might
necessitate the preparation of accounts from
incomplete records (stock or assets destroyed,
cash misappropriation or lost, accounting
record destroyed etc.)
LO1.5.2: Understand and apply the following
techniques used in incomplete record
situations:
Use of the accounting equation
Use of opening and closing balances of
ledger accounts.
Use of a cash and / or bank summary
Use of markup on cost and gross and net
profit percentage

35
Accounting for inventories
(IAS 2); and property, plant
and equipment (IAS-16)

Application of cost formulas
(FIFO/ weighted average cost)
on perpetual and periodic
inventory system
2 LO2.1.1: Understand and analyze the
difference between perpetual and periodic
inventory systems.
LO2.1.2: Understand and analyze the
difference between FIFO and weighted
average cost formulas and use them to
estimate the cost of inventory).
LO2.1.3: Account for the application of cost
formulas ( FIFO/ weighted average cost) on
perpetual and periodic inventory system
LO2.1.4: Identify the impact of inventory
valuation methods on profit.
Cost of inventories (cost of
purchase, cost of conversions,
other costs)
2 LO2.2.1: Calculate cost of inventory in
accordance with IAS-2 using data provided
including cost of purchase, cost of
conversions, and other costs.
LO2.2.2: Identify relevant and irrelevant cost
from data provided.
Measurement of inventories
(lower of cost or net realizable
value)
2 LO2.3.1: Describe net realizable value (NRV)
LO2.3.2: Explain the situation when the cost of
inventories may not be recoverable.
LO2.3.3: Demonstrate the steps in measuring
inventory at lower of cost or NRV.
LO2.3.4: Post journal entries for adjustments
in carrying value (excluding reversal of write
downs)
Presentation of inventories in
financial statements
2 LO2.4.1: Understand the disclosure
requirements and prepare extracts of
necessary disclosures (excluding pledged
inventories and reversal of write downs).
Initial measurement of
property, plant & equipment
(components of cost, exchange
of assets)
1 LO2.5.1: Calculate the cost on initial
recognition of property, plant and equipment in
accordance with IAS-16 including different
elements of cost and the measurement of cost

36
IAS 2 and IAS-16 (continued)
Measurement after recognition
of property, plant and
equipment
1 LO2.6.1: Present property, plant and
equipment after recognition under cost model
and revaluation model using data and
Depreciation - depreciable
amount, depreciation period
and depreciation method
1 LO2.7.1: Define depreciation, depreciable
amount and depreciation period
LO2.7.2: Calculate depreciation according to
the following methods
straight-line,
diminishing balance
the units of production
LO2.7.3: Compute depreciation for assets
carried under the cost and revaluation models
using information provided including
impairment.
LO2.7.4: Prepare journal entries and ledger
accounts.
De-recognition 1 LO2.8.1: Describe de-recognition of property,
plant and equipment
LO2.8.2: Post journal entries to account for de-
recognition using data provided
Revenue accounting
Revenue (IAS-18) 2 LO3.1.1: Describe revenue
LO3.1.2: Describe and demonstrate the
accounting treatment (measurement and
recognition) for revenue arising from the
following transactions and events:
sale of goods;
rendering of services
use by others of entity assets yielding
interest, royalties and dividends.

37
Branch accounts
Branch accounts (excluding
foreign branches)
2 LO4.1.1: Describe the special features of
branch accounting including differences to
routine accounting
LO4.1.2: Understand and apply the treatment
of branch inventory, branch mark-up, goods
sent to branch and branch debtors; in the
books of head office
LO4.1.3: Prepare trading/income statement of
branch.

38

Business Law

S

Syllabus objective
BUSINESS LAW
Objective
To give students an understanding of the legal system and commercial laws; and build a
knowledge base of corporate laws.

Learning Outcome
The candidate will be able to demonstrate:
1 Basic knowledge of the legal environment.
2
Comprehension of law governing contracts, partnership and negotiable
instruments.
3
Knowledge of the legal terminology of company law and the basics of company
incorporation.
4 Familiarity with the provisions governing the issuance of shares.
5 Knowledge of the management of companies.
6
Familiarity with investment by companies, nancial accounts and distribution of
prot.
7 Knowledge of the appointment of auditors and their responsibilities and duties.

39
Business Law
Grid Weighting
Introduction to legal system 5
Mercantile law
Contract Act 1872 15
Partnership Act 1932 10
Negotiable Instrument Act 1881 10
Companies Ordinance 1984
Sections 1 to 51 of the Companies Ordinance, 1984 10
Sections 142 to 204A of the Companies Ordinance, 1984 15
Total 100
Syllabus
Ref
A Introduction to the Legal System
Sources and process of legislation
1 Sources of law and an
introduction to the
Constitution of Pakistan
1 LO 1.1.1: Briefly describe sources of
law in Pakistan
LO 1.1.2: Describe the basic structure
of the constitution of the Islamic
Republic of Pakistan
2 Process of legislation and
legal system in Pakistan
1 LO 1.2.1: Define legislation and
describe its forms.
LO 1.2.2: Briefly describe the process
of legislation as per the Constitution.
LO 1.2.3: Identify the structure of the
courts in Pakistan
.
B Mercantile law
Contract Act 1872
1 All sections 2 LO 2.1.1: Discuss the provisions of the
act with respect to the following and
demonstrate comprehension in simple
scenario based problems)
communication, acceptance and
revocation of proposals
40
Syllabus
Ref
contracts, voidable contracts and
void agreements
Contingent contracts
performance of contracts
breach of contract
indemnity and guarantee
bailment and pledge
contract of agency
C Partnership Act 1932
1 Chapter I Preliminary 2 LO 2.2.1: Dene the terms
2 Chapter II - The nature of
partnership
2 LO 2.3.1: Understand and describe the
partnership relationship and its creation
and identify which mode determines
existence of a partnership.
3 Chapter III - Relations of
partners to one another
2 LO 2.4.1: Determine the rights and
duties of partners of the rm over
property of the rm in given situations.
4 Chapter IV - Relations of
partners to third parties
2 LO 2.5.1: Describe the relationship of
partners with third parties.
LO 2.5.2: Identify the implied authority
of the partner in relation to third parties,
liability of a partner for acts of the rm
and liability of the rm for wrongful acts
of a partner in given situations.
LO 2.5.3: Identify the rights and
liabilities of a minor admitted to the
benets of partnership:
D Negotiable Instruments Act 1881
1 Denitions and meanings
(Section 1 to 25)
LO 2.6.1: Dene and explain terms.
LO 2.6.2: Explain types of negotiable
instruments.
2 Discharge of liability
(Section 82 to 90)
LO 2.7.1: Identify how the maker of a
negotiable instrument is discharged
from his liability under given scenarios.
3 Provisions relating to
cheques (Section 122A to
131C)
LO 2.8.1: Describe crossing of cheques
LO 2.8.2: Differentiate between a
cheque crossed generally and a
cheque crossed specially and their
payment modes.
41
Business Law
Syllabus
Ref
E Companies Ordinance 1984
Preliminary and incorporation (Sections 1 to 51)
1 Definitions (Section 2) 1 LO 3.1.1: Define the terms which are
relevant to the areas covered in the
syllabus
2 Meaning of "subsidiary" and
"holding company"
(Section 3)
2 LO 3.2.1: Explain subsidiary and
holding company and when a company
becomes a subsidiary or holding
company of another company.
LO 3.2.2: Apply the concept of
subsidiary in simple scenarios.
3 Powers and functions of the
Commission (Section 12)
1 LO 3.3.1: Demonstrate familiarity with
the powers and functions of the
Commission.
4 Memorandum of association
(Section 15 to 25)
2 LO 3.4.1: Describe the memorandum of
association and state its purpose.
LO 3.4.2: List the clauses of
memorandums of association of various
types of companies.
LO 3.4.3: Describe the purpose and
procedure of alteration to different
clauses of a memorandum of
association.
5 Articles of association
(Section 26)
2 LO 3.5.1: Define the articles of
association and state its purpose.
LO 3.5.2: State the information which
should be contained in the articles of
various companies.
6 Registration of
memorandum and articles of
association
(Section 30 to 36)
2 LO 3.6.1: Describe the procedure of
registration of the memorandum and
articles of association
LO 3.6.2: Describe the effects of
registration of the memorandum and
articles of association.
7 Provisions with respect to
names of companies
(Section 37 to 41)
2 LO 3.7.1: Describe with examples the
prohibitions with regard to the selection
of the name of a company.
LO 3.7.2: Identify the actions and
procedures needed to be taken by
company and registrar, if a company is
registered by a prohibited name.
42
Syllabus
Ref
8 Association not for prot
(Section 42)
1 LO 3.8.1: Comprehend the nature of
association not for prot.
9 Companies limited by
guarantee (Section 43)
1 LO 3.9.1: Understand the provisions
regarding divisible prot and dividing
the undertaking into shares or interest.
F Allotment of shares, registration of charge etc. (Sections 52 to 136)
1 Prospectus, allotment, issue
and transfer of shares and
debentures, deposits, etc.
(Section 52 to 57)
1 LO 4.1.1: Dene a prospectus and
explain its purpose.
LO 4.1.2: Understand the requirements
relating to a prospectus as laid down in
Section 52, 53 (1), (5) and (8)
LO 4.1.3 Describe the matters that are
to be specied in a a prospectus as
required under clause 1 to 7 and 17, 18
19, 24, 26 and 27 of Section 1 of Part I
of Second Schedule.
LO 4.1.4: Describe the reports that are
to be included in a prospectus as
required under Section 2 of Part I of
Second Schedule.
LO 4.1.5: Understand the provisions
regarding statement and consent of
expert.
2 Share capital and
debentures
(Section 89 to 95 and 108)
1 LO 4.2.1: Describe the nature of shares
and share certicates
LO 4.2.2: Describe the classes and
kinds of shares
LO 4.2.3: Describe with simple
example the condition of fully paid
shares.
LO 4.2.4: State with simple examples
the kinds of alterations can be made to
the share capital.
LO 4.2.5: State the rules on prohibition
of purchase of a companys own or its
holding companys shares.
LO 4.2.6: Understand the meaning of
variation of shareholders right.
LO 4.2.7: Demonstrate familiarity with
the procedure for cancellation of
variation of shareholders right.
43
Business Law
Syllabus
Ref
3 Registration of mortgages,
charges etc.
(Section 121, 129, 132 and
136)
1 LO 4.3.1: Discuss the meaning of
mortgage/charge with simple examples,
and the duty of company and the
procedure for registration of charges.
LO 4.3.2: State the right of an
interested party in respect of a
registration of mortgage/charge.
LO 4.3.3: State the duty and procedure
of payment or satisfaction of
mortgage/charge.
the right to inspect the instrument
creating a mortgage/charge.
LO 4.3.5: Discuss the consequences of
registered and unregistered
mortgages/charges.
G Management and administration (Sections 142 to 204A)
1 Registered office,
publication of names etc.
(Section 142 to 145)
2 LO 5.1.1: Discuss with simple
examples the provisions with regard to
having a registered office, publication of
name and publication of paid-up capital.
2 Commencement of business
by a public company
(Section 146)
1 LO 5.2.1: State the conditions to be
fulfilled before commencement of
business by a company.
LO 5.2.2: State the applicability and
non-applicability of the conditions on
different kinds of company.
3 Meeting and proceedings
1 LO 5.3.1: State the timing, matters and
reports relating to statutory meetings.
LO 5.3.2: State the timing, matters and
reports relating to an annual general
meeting using simple examples.
LO 5.3.3: State who can call an annual
general meeting.
LO 5.3.4: State the timing, matters and
reports relating to an extraordinary
general meeting
LO 5.3.5: State who can call an
extraordinary general meeting.
LO 5.3.6: State the quorum for a
general meeting
44
t s n I e h T i x l a n o i t a n r e t n I f l o o W e l i m E itute of Chartered Accountants of Pakistan
Syllabus
Ref
LO 5.3.7: State the entitlement of a
member in respect of appointment of
proxy and conditions applicable
thereon.
LO 5.3.8: Describe the provisions
relating to minutes of meetings
4 Directors
(Section 174 to 197A)
1 LO 5.4.1: Explain and apply in given
scenarios, the legal provision with
respect to directors:
Eligibility
Number
Elections
Vacation of ofce
Powers, duties and liabilities
LO 5.4.2: State the legal restrictions on
a company with reference to loans to
directors
5 Chief executive
(Section 198 to 204A)
1 LO 5.5.1: Explain the appointment of
rst chief executive and subsequent
chief executives using simple
examples.
LO 5.5.2: State the conditions
applicable on appointment, removal,
engagement in any business
LO 5.5.3: State the provisions relating
to appointment of a secretary
H Investments, accounts etc. (Sections 208 to 251)
1 Investment in associated
companies and undertakings
(Section 208)
2 LO 6.1.1: Describe the conditions
applicable to a company for making
investment in associated companies
and undertakings.
2 Investment of companies to
be held in its own name
(Section 209)
1 LO 6.2.1: Discuss with simple
examples as to how a company can
hold its investment in names other than
its own name.
3 Disclosure of interest by
directors (Section 214)
1 LO 6.3.1: Explain the requirements of
disclosure of interest by director in
contract / arrangement entered into by
or on behalf of the company.
45
Business Law
Syllabus
Ref
4 Interest of other officers etc.
(Section 215)
1 LO 6.4.1: Explain the requirements of
disclosure of interest by officers in
contract / arrangement entered into by
or on behalf of the company.
5 Interested director not to
participate or vote in
proceedings of directors
(Section 216)
1 LO 6.5.1: Describe the participation of
interested director in the proceedings of
directors in contract / arrangement
entered into by or on behalf of the
company
6 Accounts (Section 230, 233,
236, 241 and 242 )
LO 6.6.1: List the books of accounts to
be kept by company
LO 6.6.2: Explain the major
requirements with respect to the annual
accounts and the balance sheet.
LO 6.6.3: Describe the contents of a
directors report
LO 6.6.4: Describe the authentication
of balance sheet and profit and loss
account
LO 6.6.5: Discuss requirements of filing
of balance sheets and profit and loss
accounts with the registrar.
7 Dividend
LO 6.7.1: Explain the requirement
relating to declaration of dividend and
identify certain restrictions on
declaration of dividend.
applicable to payment of dividend.
I Audit (Sections 252 to 257)
1 Audit (Section 252 to 257) 2 LO 7.1.1: Explain the provisions
applicable to
Appointment and remuneration of
auditors
Qualification and disqualification of
auditors
An auditors right to access the
record and information
An auditors duty to report and
contents thereof
Signature of an audit report

46

Principles of Taxation

S

Syllabus objectives
PRINCIPLES OF TAXATION
Objective
To provide basic knowledge in the understanding of objectives of taxation and core areas
of Income Tax Ordinance, 2001, Income Tax Rules 2002 and Sales Tax Act 1990 and
Sales Tax Rules.

Learning Outcome
The candidate will be able to:
1 Understand the objective of levy of taxation, and its basic concepts
2 Understand the system of taxation in Pakistan
3 Understand the historical background of taxation in Pakistan
4 Understand constitutional provisions of taxation in Pakistan
5 Understand and explain the basic ethics of taxation
6
Understand and explain provisions of Income Tax law mainly relevant to
individuals and association of persons
7 Understand and explain Sales Tax law relevant to operational level tasks

47
Grid Weighting
Objective, system and historical background 10
Constitutional provisions 10
Ethics 10
Income tax 45
Sales tax 25
Total 100
Syllabus
Ref
A Basic concepts of taxation
1 Objectives 1 LO 1.1.1: Comprehend the main
objectives of taxation
LO 1.1.2: J ustify Taxation as means of
development
2 Basic concept 1 LO 1 2.1: Understands the implication
of direct and indirect taxation
3 System of taxation in
Pakistan
(Income Tax, Sales Tax,
Federal Excise Tax, Capital
Value Tax, Customs)
1 LO 1.3.1: Comprehend different kinds
of taxes and their scope
4 Historical background 1 LO 1.4.1: State the history of taxation in
sub-continent
B Constitutional provisions
1 Federal financial procedures
(Article 78 to 88 of the
Constitution of Pakistan)
the Federal Consolidated Fund and
Public Account
the expenditure that can be charged
upon Federal Consolidated Fund
2 Provincial financial
procedures
(Article 118 to 127 of the
the Provincial Consolidated Fund and
Public Account
the expenditure that can be charged
upon Provincial Consolidated Fund
48
Syllabus
Ref
3 Distribution of revenues
between Federation and the
Provinces
(Article 160 to 165A of the
the formation of National Finance
Commission and its main function.
the taxes that can be raised under the
authority of Parliament
the powers of provincial assemblies in
respect of professional tax
the exemption available to federal and
provincial governments
the tax on corporation owned by federal
and provincial government
4 Federal legislative lists
relating to revenue
generating measures
(related part of Fourth
Schedule to the Constitution
of Pakistan)
1 LO 2.4.1: Enlist the revenue collection
mentioned at S. No. 43 to 53 in Fourth
Schedule attached to the Constitution
C Ethics
1 Ethics for tax legislation 2 LO 3.1.1: Describe how canons of
taxation developed by economist are
relevant for legislators while formulating
tax policies
2 Ethics for taxpayers 2 LO 3.2.1: Understand the right and
purpose of state to tax its citizen
LO 3.2.2: Understand morality behind
compliance with tax laws
3 Ethics for tax implementing
authorities
2 LO 3.3.1: Understand the powers Vs
ethical responsibilities of tax
implementation authorities
LO 3.3.2: Understand pillars of tax
administration, namely, fairness,
transparency, equity and accountability
4 Tax evasion and avoidance 2 LO 3.4.1: Explain with simple examples
the basic difference between evasion
and avoidance of tax
49
Syllabus
Ref
D Income Tax
1 Chapter I Preliminary
(concepts of terms defined
section 2 sub-section 1, 5,
5A, 6, 7, 9, 10, 11A, 19,
19C, 20, 21, 22, 23, 29, 29A,
29C, 36, 37, 38, 41, 44A, 46,
47, 49, 50, 51, 52, 53, 68)
1 LO 4.1.1: Describe the definitions given
in section 2 sub-section 1, 5, 5A, 6, 7,
9, 10, 11A, 19, 19C, 20, 21, 22, 23, 29,
29A, 29C, 36, 37, 38, 41, 44A, 46, 47,
49, 50, 51, 52, 53, 68
LO 4.1.2: Describe other definitions
covered under relevant sections
LO 4.1.3: Apply definitions on simple
scenarios
2 Chapter II Charge of tax
(excluding section 7)
2 LO 4.2.1: Explain the chargeability of
tax with simple examples
3 Chapter III Tax on Taxable
income (Excluding Section
29A, 30 and 31)
2 LO 4.3.1: Compute taxable income and
tax thereon relating to salary, income
from property, income from business,
capital gain, dividend, profit on debt,
ground rent, rent from sub-lease,
income from provision of amenities,
utilities or any other services connected
with rented building and consideration
for vacating the possession of building
4 Chapter IV (Part I, II and
III) Common rules
(Excluding Sections 78 and
79)
1 LO 4.4.1: Understand and apply on
simple scenarios provisions for income
of joint owner, apportionment of
deductions, fair market value and
receipt of income
LO 4.4.2: Explain using simple
examples the provisions relating to tax
year
LO 4.4.3: Explain with simple examples
the provisions relating to disposal and
acquisition of assets, cost and
consideration received
5 Chapter V Part I Central
concepts
2 LO 4.5.1: Describe with simple
examples the meaning of persons,
resident and non-resident persons and
associates
6 Chapter V Part II Div I and II
Individuals (Excluding
Section 88A)
examples the principles of taxation of
individuals
7 Chapter V Part III
Association of persons
examples the principles of taxation of
association of persons
50
Syllabus
Ref
8 Chapter VII Part II
Taxation of foreign-source
income of residents
2 LO 4.8.1: Understand the applicability
of tax on foreign salary income, credit
against foreign tax and treatment of
foreign loss of a resident on simple
scenarios.
9 Chapter X Part I Returns 2 LO 4.9.1: Identify persons required to
furnish a return of income
LO 4.9.2: Identify persons not required
to furnish a return of income
LO 4.9.3: Identify persons required to
furnish wealth statements
LO 4.9.4: List the contents of wealth
statement
10 Chapter X Part II
Assessments
1 LO 4.10.1: Understand the meaning of
assessment by Commissioner and
power of Commissioner to conduct
audit
11 Chapter X Part III Appeals 1 LO 4.11.1: List the appellate bodies
LO 4.11.2: Explain using simple
examples the circumstances when
appeal to the Commissioner (Appeals)
is made and the pre-conditions
applicable
LO 4.11.3: Explain the provisions
relating to decision of appeals by
Commissioner (Appeals) using simple
examples
12 Chapter X Part VIII
Records, Information
Collection and Audit
(Section174 and 177)
2 LO 4.12.1: Understand the provisions
relating to records to be kept by the
taxpayers
relating to audit by Commissioner
13 The Income Tax Rules
related to the above
chapters of the Income Tax
Ordinance 2001 shall also
be examined
1 LO 4.13.1: Apply rules relevant to
learning outcomes specified against
each topic on well explained scenarios
14 First and Second Schedule
attached to the Income Tax
Ordinance 2001
2 LO 4.14.1: Apply clauses relevant to
learning outcomes specified against
each topic on well explained scenario
51
Syllabus
Ref
E Sales Tax
Sales Tax Act 1990
1 Chapter I Preliminary
(concepts of terms defined
Section 2 sub-sections 3,
5AA, 9, 11, 14, 16, 17, 20,
21, 22A, 25, 27, 28, 29A, 33,
35, 39, 40, 41, 43, 44, 46)
2 LO 5.1.1: Describe the definitions given
in section 2 sub-section 3, 5AA, 9, 11,
14, 16, 17, 20, 21, 22A, 25, 27, 28,
29A, 33, 35, 39, 40, 41, 43, 44, 46
LO 5.1.2: Describe other definitions
covered under relevant sections
LO 5.1.3: Apply definitions on simple
scenarios
2 Chapter II Scope and
payment of tax
2 LO 5.2.1: Understand the application
sales tax law on taxable supplies
including zero rated and exempt
supplies
LO 5.2.2: State the determination, time
and manner of sales tax liability and
payment using simple examples
3 Chapter III Registration LO 5.3.1: State the requirement and
procedure of registration
4 Chapter IV Book keeping
and invoicing requirements
LO 5.4.1: List the record to be kept by a
registered person
LO 5.4.2: State the requirements of tax
invoice
LO 5.4.3: Explain the retention period
of record using simple examples.
5 Chapter V Returns LO 5.5.1: Understand the various types
of returns required to be filed by
registered and un-registered persons.
Sales Tax Rules, 2006
1 Chapter I Registration,
Compulsory registration and
De-registration
2 LO 6.1.1: Explain the requirement and
procedure of registration, compulsory
registration and deregistration using
simple examples
2 Chapter II Filing of return 2 LO 6.2.1: Explain the requirement and
procedure of filing of return using
simple examples
52
Syllabus
Ref
3 Chapter III Credit and
Debit And Destruction of
Goods
procedure of issuing debit and credit
notes using simple examples
LO 6.3.2: State the procedure for
destruction of goods
4 Chapter IV Apportionment
of Input Tax
procedure of apportionment of input tax
using simple examples

53

Business management and behavioural studies

S

Syllabus objective
BUSINESS MANAGEMENT AND BEHAVIOURAL STUDIES
Objective
To equip candidates with the fundamentals of management and behaviuoral studies.

Learning Outcome
1
Demonstrate an understanding of the nature of management concepts and
approaches
2
Show familiarity with the structure of business organizations, their culture and the
change process
3 Demonstrate an understanding of human behavior
4 Demonstrate an understanding of the concepts of motivation
5 Show familiarity with the nature and kinds of leadership
6
Show familiarity with the nature and importance of negotiation and conflict
resolution
7 Demonstrate a basic understanding of IT based management information systems

54
Business management and behavioral studies
Grid Weighting
Management concepts 25
Organizational process 20
Individual behavior and motivation 20
Leadership, negotiation and conflicts 20
Management information system 15
Total 100
Syllabus
Ref
A Management concepts
1
Meaning
1
LO 1.1.1 Define the term Management,
its nature and purpose
LO 1.1.2 State the difference between
Managers and Leaders using examples
LO 1.1.3 Describe the classification of
management roles by Henry Mintzberg
2
Functions
1
LO 1.2.1 Illustrate management model
and explain the functions of
management
LO 1.2.2 Describe the roles and skills
of management
3
Classical approach
2
LO 1.3.1 Describe the principles of
Scientific management by Fredrick
Taylor
LO 1.3.2 Explain the key principles of
management by Fayol and Urwick
LO 1.3.3 Discuss the criticism on
scientific management and classical
approach to management
LO 1.3.4 List the characteristics of
bureaucratic organizations and discuss
criticism on this form of management
4
Behavioral approach
2
LO 1.4.1 Discuss the Hawthorne
experiments on human relation
approach, their significance and
implications.
LO 1.4.2 Discuss critically the
relevance of these experiments for
management and organizational
behaviour.
LO 1.4.3 Discuss Theory X and Theory
55
Syllabus and learning outcomes
Syllabus
Ref
Y including their implication and
differences
5
Management science
approach
2
LO 1.5.1 Explain the effects of
operations research in business
sciences
6
External factors
Competitors, suppliers,
labour, customers
2
LO 1.6.1 Describe the direct and
indirect interactive forces which may
affect the organizational environment
7
General environment -
Political, legal, technological,
economic, social
2
LO 1.7.1 Explain how the external
forces affect the organizational
environment using examples.
B Organizational process
1
Organizational structure -
principles of organization,
different ways of structuring
organization
2
LO 2.1.1 Explain the meaning and
nature of organizational structure.
LO 2.1.2 Explain the importance of
good structure and consequences of a
deficient structure.
LO 2.1.3 Describe how the elements of
organizational structure can be
combined to create mechanistic and
organic structures
LO 2.1.4 Describe the advantages and
disadvantages of mechanistic and
organic structure of organization
2
Organizational change -
nature of change process,
resistance to change
2
LO 2.2.1 Identify the external forces
creating change on the part of
organizations
LO 2.2.2 Describe process of
organizational change
LO 2.2.3 Explain the forms of reactions
to change
3
Organizational culture -
concept, dysfunctional
aspect of culture
2
LO 2.3.1 Describe organizational
culture using examples
LO 2.3.2 Discuss using examples the
different levels of organizational culture
C Individual behavior and motivation
1
Perception
2
LO 3.1.1 Explain perception and
perception process
difference between sensation and
perception
internal and external factors that affect
56
Syllabus
Ref
perceptual selectivity
LO 3.1.4 Describe the characteristics of
Perceiver and Perceived
LO 3.1.5 Analyse the perceptual
problems/distortions in dealing with
other people like stereotyping and Halo
effect etc.
2
Attitude
2
LO 3.2.1 Define attitude and its
components with reference to culture of
an organization
LO 3.2.2 Discuss the differences
between cognitively based attitudes
and affectively based attitudes
LO 3.2.3 Describe the difference
between implicit and explicit attitudes
LO 3.2.4 Discuss cross-cultural
differences in the bases for attitudes
LO 3.2.5 Explain the relationship
between attitude and behaviour
3
J ob satisfaction and stress
2
LO 3.3.1 Explain using examples the
meaning of job satisfaction.
LO 3.3.2 Identify the outcomes of job
satisfaction and ways to enhance
satisfaction
LO 3.3.3 Describe stress and identify
the causes of job stress
LO 3.3.4 Explain using examples the
general categories of stressors that can
affect job
LO 3.3.5 Identify consequences of
stress and strategies in order to cope
up with stress
4
Maslow need hierarchy
Model
2
LO 3.4.1 Describe using examples
motivation
LO 3.4.2 Explain Maslows need
hierarchy theory
LO 3.4.3 Explain strengths and
problems in applications of Maslows
theory
5
Herzbergs Two-factor
Theory
2
LO 3.5.1 Explain Herzbergs two factors
of motivation and major criticism
thereon
57
Syllabus
Ref
6
McClellands theory of
needs
2
LO 3.6.1 Explain the three motives by
McClelland.
LO 3.6.2 State the difference between
intrinsic and extrinsic motives
7
Goal setting
2
LO 3.7.1 List the major dimensions of
goal setting theory
LO 3.7.2 Explain why and how goals
contribute to self-motivation
LO 3.7.3 Describe how to set effective
goals and the problems sometimes
created by goals
8
Management by objective
2
LO 3.8.1 Explain the basic steps of the
overall performance system of MBO.
9
Self-efficacy
2
LO 3.9.1 Define the term self-efficacy
LO 3.9.2 Understand high self-efficacy
and low self-efficacy
10
Reinforcement
2
LO 3.10.1 Describe law of effect using
simple examples
LO 3.10.2 Describe reinforcement as
used in behavioural management
LO 3.10.3 Describe positive and
negative reinforcers using examples
11
Equity/organizational justice
2
LO 3.11.1 Explain organizational justice
and three components of the same,
namely, distributive, procedural and
interactional
12
Expectancy
2
LO 3.12.1 Describe using simple
examples the Expectancy theory and its
three elements, namely, expectancy,
instrumentality and valence
D Leadership, negotiation and conflicts
1
Type of leadership
2
LO 4.1.1 Discuss different leadership
styles, namely, free-rein, engaging,
participative, task oriented and
autocratic
2
Theories of leadership
2
LO 4.2.1 Discuss using simple
examples different theories of
leadership, namely, trait theories, Blake
and Mouton theory, situational and
contingency theories
3
Roles, activities, skills of
leaders
2
LO 4.3.1 Discuss leadership roles and
activities
LO 4.3.2 Identify Skills needed for
58
Syllabus
Ref
effective leadership
4
Group Dynamics and
teamwork - types of groups,
group formation, group
structure, individual in
groups, team work
2
LO 4.4.1 List differences between
groups and teams
LO 4.4.2 Explain and illustrate balance
theory of group formation
LO 4.4.3 Identify and describe stages
of group development
LO 4.4.4 List down the factors that
increase and decrease group
cohesiveness
LO 4.4.5 Explain the ways to make
teams more effective
5
Negotiation skills
2
LO 4.5.1 Explain various stages of the
negotiation process
LO 4.5.2 List five skills of effective
negotiator
LO 4.5.3 Explain the low risk
techniques of negotiation
LO 4.5.4 Explain the high risk
techniques of negotiation
6
Conflict resolution
2
LO 4.6.1 Discuss the conflict resolution
process
LO 4.6.2 Explain Intra-individual conflict
with model of frustration
LO 4.6.3 List some of the physical,
psychological and behavioural
problems occur due to conflict
E Management information systems
1
General system concepts of
information technology
1
LO 5.1.1 Demonstrate basic
understanding of computer hardware
i.e. input, output, storage of information
and networking
LO 5.1.2 Understand the concepts of
information technology and information
systems.
LO 5.1.3 Understand the role and types
of information systems in business
2
IT-based transaction
processing systems
1
LO 5.2.1 Understand data entry, batch
processing, online processing and real
time -online processing
3
IT-based financial reporting
1
LO 5.3.1 Understand IT based financial
59
Syllabus
Ref
systems reporting system
4
IT-based order processing
and inventory control
systems
1
LO 5.4.1 Understand IT based order
processing and inventory control
systems
5
IT-based personnel systems
1
LO 5.5.1 Understand IT based
personnel systems
6
Integrated IT systems
1
LO 5.6.1 Briefly describe integrated
systems, their advantages and
disadvantages
LO 5.6.2 Understand main feature of
Enterprise Resource Planning

60

Emile Woolf Publishing Limited v
Financial accounting and reporting II

S

Syllabus objectives
FINANCIAL ACCOUNTING AND REPORTING II
Objective
To broaden the knowledge base of basic accounting acquired in earlier modules with
emphasis on International Financial Reporting Standards.

Learning Outcome
1 prepare financial statements in accordance with the relevant law of the country
and in compliance with the reporting requirement of the international
pronouncements.
2 account for transactions relating to tangible and intangible assets including
transactions relating to their common financing matters.
3 understand the implication of contingencies; changes in accounting policies and
estimates; errors and events occurring after reporting period.
4 account for simple transactions relating to taxation.
5 demonstrate knowledge of basic ethical issues in preparation and reporting of
financial information.

61
Preparation of financial
statements Final accounts

statements of limited
companies in line with the
requirement of the Companies
Ordinance, 1984 and
International Financial
Reporting Standards (IAS 1
and 7 and others included in
the syllabus) excluding
liquidations reconstructions
and mergers
2 LO1.1.1: Prepare simple statements of
financial position in accordance with the
guidance in IAS 1 from data and information
provided
LO1.1.2: Identify the laws, regulations,
reporting standards and other requirements
applicable to statutory financial statements of a
limited company
LO1.1.3: Prepare and present the following in
accordance with the disclosure requirements of
IAS1, Companies ordinance, fourth schedule /
fifth schedule.
Statement of financial position
Statement of comprehensive income.
Statement of changes in equity
LO1.1.4: Prepare statement of cash flows in
accordance with the requirements of IAS 7.
statements Consolidation
of a single subsidiary

Elimination of investment in
subsidiary and parents equity
1 LO1.2.1: Describe the concept of a group as a
single economic unit.
LO1.2.2: Define using simple examples
subsidiary, parent and control
LO1.2.3: Describe situations when control is
presumed to exist.
LO1.2.4: Identify and describe the
circumstances in which an entity is required to
prepare and present consolidated financial
statements
LO1.2.5: Eliminate (by posting journal entries)
the carrying amount of the parents investment
in subsidiary against the parents portion of
equity of subsidiary and recognize the
difference between the two balances as either
goodwill; or
gain from bargain purchase

62
Emile Woolf Publishing Limited vii
statements Consolidation
of a single subsidiary
(continued)

Identification of non-controlling
interest
1 LO1.3.1: Define and describe non- controlling
interest in the case of a partially owned
subsidiary.
LO1.3.2: Identify the non-controlling interest in
the following.
net assets of a consolidated subsidiary;
and
profit or loss of the consolidated
subsidiary for the reporting period
Profit and loss from intra-
company transactions relating
to assets and inventories
without tax implications
1 LO1.4.1: Post adjusting entries to eliminate the
effects of intergroup sale of inventory and
depreciable assets.
Preparation of consolidated
statements of financial position
1 LO1.5.1: Prepare and present simple
consolidated statements of financial position
involving a single subsidiary in accordance
with IFRS 10.
Preparation of consolidated
statements of comprehensive
income
1 LO1.6.1: Prepare and present a simple
consolidated statement of comprehensive
income involving a single subsidiary in
accordance with IFRS 10.

63
Accounting for tangible and
intangible assets, leases and
borrowing costs

Recognition, de-recognition,
measurement, depreciation /
amortization and measurement
after recognition of non-
current assets (IAS 16 and IAS
38)
2 LO2.1.1: Explain and apply the accounting
treatment of property, plant and equipment and
intangible assets.
LO2.1.2: Formulate accounting policies in
respect of property, plant and equipment and
intangible assets
Leases (IAS 17) 2 LO2.2.1: Prepare and present extracts of
financial statements in respect of lessee
accounting, lessor accounting, and sale and
lease back arrangements.
respect of different lease transactions
LO2.2.3: Analyze the effect of different leasing
transactions on the presentation of financial
statements
Recognition of borrowing costs
(IAS 23)
2 LO2.3.1: Describe borrowing cost and
qualifying assets using examples.
LO2.3.2: Identify and account for borrowing
costs in accordance with international
pronouncements.
LO2.3.3: Report borrowing costs in final
accounts
respect of borrowing cost

64
Emile Woolf Publishing Limited ix
Provisions and
contingencies; changes in
accounting policies and
estimates; errors and events
occurring after reporting
period; and taxation

Provisions, contingent liabilities
and contingent assets (IAS-37)
2 LO3.1.1: Define liability, provision, contingent
liability and contingent asset
LO3.1.2: Distinguish between provisions,
contingent liabilities or contingent assets.
LO3.1.3: Understand and apply the recognition
criteria for provisions IFRS.
LO3.1.4: Calculate/ measure provisions
LO3.1.5: Account for changes in provisions
LO3.1.6: Report provisions in final accounts
Accounting policies, changes
in accounting estimates; and
errors (IAS-8)
2 LO3.2.1: Define accounting policies,
accounting estimates and prior period errors.
LO3.2.2: Understand and analyze using
examples, IFRS guidance on accounting
policies, change in accounting policies and
disclosure.
examples, IFRS guidance on accounting
estimates, changes in accounting estimates
and disclosure.
examples, IFRS guidance on errors, correction
of errors and disclosure.
Events occurring after the
reporting period (IAS-10)
2 LO3.3.1: Explain using examples events after
the reporting period, adjusting events, and
non-adjusting events.
examples IFRS guidance on the recognition,
measurement and disclosure of adjusting
events and non-adjusting events.
examples, going concern issues arising after
the end of the reporting period.

65
Accounting for taxation
Taxation: Current year, prior
years and deferred (IAS-12)
Note that the deferred
consequences of the following
transactions are not
examinable:
Business combination
(including goodwill
Assets carried at fair value
Un-used tax losses and
credits
Re-assessment of un-
recognized deferred tax
assets
Investments in
subsidiaries, branches,
associates and interest in
joint venture
Items recognized outside
profit and loss account
Share based payment
2 LO4.1.1: Define temporary differences and
identify temporary differences that cause
deferred tax liabilities and deferred tax assets
LO4.1.2: Determine amounts to be recognised
in respect of temporary differences
LO4.1.3: Prepare and present deferred tax
calculations using the balance sheet approach.
respect of deferred tax
LO4.1.5: Apply disclosure requirements of
IAS12 to scenarios of a moderate level of
complexity
Ethics
An understanding of ethics
relating to preparation and
reporting of financial
information (Section 320 of
Code of Ethics for Chartered
Accountants)
2 LO5.1.1: Explain using simple examples the
ethical responsibilities of a chartered
accountant in preparation and reporting of
financial information

66

Cost and management accounting

S

Syllabus objectives
COST AND MANAGEMENT ACCOUNTING
Objective
To equip candidates with techniques of cost accounting to provide a knowledge base for
decision making skills..

Learning Outcome
1
understand the nature of cost accounting and analyse data in terms of cost
behaviour
2
establish the costs associated with the production of products and provision of
services
3 demonstrate an understanding of different costing system
4 apply the concepts of costing in the decision making process
5 demonstrate a functional knowledge of financial instruments
6 take account of the time value of money in making decisions
7 analyse the financial statements of a company using various ratios

67

Nature of cost accounting
and cost behaviour

Meaning and scope of cost
accounting
1 LO1.1.1: Explain the scope of cost accounting and
managerial accounting and compare them with
financial accounting.
Analysis of fixed, variable
and semi variable expenses
2 LO1.2.1: Explain using examples the nature and
behaviour of costs.
LO1.2.2: Explain using examples fixed, variable,
and semi variable costs.
Direct and indirect cost 2 LO1.3.1: Describe direct and indirect cost.
Cost estimation using high-
low points method and linear
regression analysis
2 LO1.4.1: Calculate estimated cost by using high-
low points method.
LO1.4.2: Apply regression analysis for cost
estimation.
Product cost and period cost 2 LO1.5.1: Explain using examples the terms product
cost and period cost.
Costs associated with
production

Basis of valuation - FIFO,
weighted average, lower of
cost and net realizable value
2 LO2.1.1: Apply inventory valuation methods (
namely, FIFO, weighted average, lower of cost and
net realizable value) in simple scenarios
LO2.1.2: Comment on the suitability of inventory
valuation under FIFO, weighted average, lower of
cost and net realizable value
LO2.1.3: Compare inventory valuation under FIFO,
weighted average, lower of cost and net realizable
value
LO2.1.4: Calculate NRVs of inventories in a given
scenario
Economic Order Quantity 2 LO2.2.1: Describe the economic order quantity
(EOQ) and apply the concept in given scenarios.
LO2.2.2: Calculate the EOQ from data provided.
Safety stock 2 LO2.3.1: Describe safety stocks for inventories.
LO2.3.2: Explain the reasons for maintaining safety
stock.
LO2.3.3: Calculate the safety stock using data
provided.
68
Costs associated with
production (continued)

Re-order level 2 LO2.4.1: Explain re-order levels and the objectives
of setting re-order levels.
LO2.4.2: Calculate of re-order levels using data
provided.
Manufacturing expenses -
actual and applied
2 LO2.5.1: Describe manufacturing overheads using
examples.
LO2.5.2: Compare manufacturing, administrative
and selling costs.
LO2.5.3: Identify manufacturing overheads from
data provided.
LO2.5.4: Describe and distinguish actual overhead
and absorbed overhead.
LO2.5.5: Calculate absorbed overheads using data
provided.
Over or under absorbed
overhead
2 LO2.6.1: Compare actual and absorbed overheads
from data provided.
LO2.6.2: Analyze over or under absorption in terms
of expenditure and volume variances.
LO2.6.3: Account for over or under-absorbed
overheads.
Production and service
departments
2 LO2.7.1: Identify production and service
departments in a manufacturing facility and analyze
their related cost.
Apportionment, allocation
and absorption of service
departments' overheads to
production
2 LO2.8.1: Allocate direct and indirect costs to
production and service departments using
LO2.8.2: Allocate costs of service departments to
production department using data and information
provided.
Costing systems
Marginal costing 2 LO3.1.1: Explain the concept of marginal costing
and apply on given data.
LO3.1.2: Explain how it helps managerial decisions
using examples.

69

Costing systems
(continued)

Absorption costing 2 LO3.2.1: Describe absorption costing using
examples.
LO3.2.2: Compare marginal costing and absorption
costing.
Manufacturing cost
accounting cycle
2 LO3.3.1: Explain the flow of cost in production
process using examples.
LO3.3.2: Prepare accounting entries for flow of
cost.
J ob order costing 2 LO3.4.1: Describe the job order costing.
LO3.4.2: Calculate cost of job and inventories by
application of job order costing.
LO3.4.3: Prepare accounting entries under the job
order costing system.
Process costing 2 LO3.5.1: Describe the process costing.
LO3.5.2: Calculate cost of product and inventories
by application of process costing.
LO3.5.3: Prepare accounting entries under the
process costing system.
Treatment of J oint and By-
Products
2 LO3.6.1: Describe joint and by product using
examples.
LO3.6.2: Allocate joint production costs using sales
value, physical unit, average unit and weighted
average methods.
LO3.6.3: Account for by-products using recognition
of gross revenue, recognition of net revenue and
replacement cost approaches.
Cost of services rendered 2 LO3.7.1: Explain how departmentalization in a
service organization help in cost planning and
control
LO3.7.2: Calculate cost of services rendered by a
service organization.
Standard costing 2 LO3.8.1: Explain standard costing using examples.
LO3.8.2: Perform standard setting for material,
labour and factory overhead.
Variance analysis-material,
labour and overhead
2 LO3.9.1: Calculate, analyze and interpret various
variances relating to material, labour and factory
overhead.
70
Costing systems
(continued)

Target costing 2 LO3.10.1: Describe target costing and how target
cost is determined.
LO3.10.2: Apply the target costing tools to given
scenarios.
Decision making
Opportunity cost 2 LO4.1.1: Describe opportunity cost using examples
Relevant cost 2 LO4.2.1: Describe relevant costs using examples
LO4.2.2: Identify the costs that are relevant to a
particular decision in given data.
Breakeven analysis 2 LO4.3.1: Explain the break-even point using
examples and margin of safety.
LO4.3.2: Calculate the breakeven point in quantity
and amount from information provided.
LO4.3.3: Apply cost volume profit (CVP) analysis
and explain its usefulness for management
Make or buy decisions 2 LO4.4.1: Apply marginal and relevant costing
concepts to analyze make or buy options
LO4.4.2: Analyze make or buy options in case of
capacity constraints.
LO4.4.3: Discuss using examples the importance
of qualitative consideration in make or buy
decisions.
Pricing for special orders 2 LO4.5.1: Perform incremental cost benefit analysis
for a special order
Further processing decisions 2 LO4.6.1: Perform incremental cost benefit analysis
for further processing costs
Utilization of spare capacity 2 LO4.7.1: Analyze the impact of spare capacity on
management decisions regarding make or buy,
special order and further processing

71

Financial instruments
(basic functions)

Shares, debentures, bonds,
futures, options, cap, floor,
collar, swaps, forward
LO5.1.1: Describe direct and indirect investment
using examples.
LO5.1.2: Describe using examples shares,
debentures, bonds, futures, options
LO5.1.3: Describe using simple examples the
following characteristics of indirect investments and
compare them with direct investments:
Divisibility
Liquidity
Holding period
LO5.1.4: Differentiate between investment and
speculation using simple examples.
LO5.1.5: Describe using simple examples cap,
floor, collar, swaps, forward
Time value of money
Computation of net present
value and internal rate of
return
LO6.1.1: Explain the time value of money
LO6.1.2: Calculate net present value and internal
rate of return of given cash flows
Financial analysis
Compute various ratios from
data and information
provided.

1 LO7.1.1: Following ratios:
Current ratio
Acid-test ratio/quick ratio
Gross profit
Return on equity
Return on assets
Return on capital employed
Debt-equity ratio
Inventory turnover
Debtor turnover
Creditor turnover

72

Audit and Assurance

S

Syllabus objective
AUDIT AND ASSURANCE
Objective
To acquire knowledge of theory, skill, techniques of auditing and to enable the students to
understand International Standards on Auditing, Assurance and Ethics.

Learning Outcomes
1 Demonstrate knowledge of general concepts governing an audit
2
Demonstrate working knowledge in respect of performance of simple audit
procedures and understand the audit report requirement under the Companies
Ordinance, 1984
3
Understand the requirement and application guidelines relating to some of the
specific areas of audit procedures including external confirmation, review of
subsequent event etc.
4 Comprehend nature of engagements of review of interim financial statements
5
Demonstrate familiarity with computer programming and IT controls relevant to
financial reporting
6
Respond on audit matters in the light of fundamental principles given in the Code
of Ethics

73
Audit and Assurance
Grid Weighting
General concepts and principles of audit 20
Performance of audit and reporting 30
Specific areas 20
Computer programming and IT controls 15
Professional Ethics 15
Total 100
Syllabus
Ref
A General concepts and principles of audit
1 Introduction to International
Federation of Accountants

1 LO1.1.1: Briefly describe the
organizational overview encompassing
History;
Vision and mission
2 Introduction to international
auditing and assurance
standard setting body
1 LO1.2.1: Briefly describe the objectives
and functions of IAASB

3 Objective and general
principal governing an audit
(ISA 200)
2 LO1.3.1: Describe the overall
objectives of the independent auditor
LO1.3.2: Explain the nature and scope
of an audit designed to enable the
independent auditor to meet those
objectives
LO1.3.3: Outline the requirements
establishing the general responsibilities
of the independent auditor applicable in
all audits
4 Responsibility for the
financial statements
2 LO1.4.1: Understand the responsibility
of management and those charged with
governance for financial reporting and
related internal control on financial
reporting using simple examples
5 Auditors responsibility to
consider fraud (ISA 240)
1 LO1.5.1: Distinguish between the terms
error, fraud and misstatement
LO1.5.2: Compare the respective
responsibilities of management and
auditors for fraud
LO1.5.3: Describe the matters to be
considered and procedures to be
74
Syllabus
Ref
carried out to assist the auditor in
identifying, assessing and detecting the
risks of material misstatement due to
fraud
6 Legal consideration relating
to appointment and removal
of auditors (sections 252 to
260 of the Companies
Ordinance 1984)
2 LO1.6.1: Explain how the first and
subsequent auditors are appointed
LO1.6.2: Explain how the first and
subsequent auditors are removed
LO1.6.3: Describe qualification and
disqualification of the auditor
7 Terms of Audit
engagements (ISA 210)
2 LO1.7.1: Describe the preconditions
that are within the control of the entity
and upon which it is necessary for the
auditor and the entitys management to
agree
LO1.7.2: Respond if preconditions are
not present or limit is imposed on scope
of audit in well explained simple
situations
LO1.7.3: State the contents of an audit
engagement letter
B Performance of audit and reporting
1 Planning an audit (ISA 300) 2 LO2.1.1: Identify the need for planning
an audit
LO2.1.2: State who should be involved
in planning and what preliminary
engagement activities are necessary
LO2.1.3: Discuss overall planning and
the audit plan for a recurring audit
LO2.1.4: Outline the additional
considerations that should be identified
while planning the initial audit
2 Assessment of audit risks
(ISA 315)
2 LO2.2.1: Outline the key steps involved
in identifying and assessing the risks of
material misstatement in the financial
statements, through understanding the
entity and its environment
LO2.2.2: Briefly state the components
of internal control
LO2.2.3: Differentiate between control
activities relevant and irrelevant to audit
75
Audit and Assurance
Syllabus
Ref
in a well explained scenario
3 Audit materiality (ISA 320) 2 LO2.3.1: Explain the concepts of
materiality and performance materiality
4 Audit evidence (ISA 500) 2 LO2.4.1: Explain, using examples,
sufficient appropriate audit evidence
LO2.4.2: State audit procedures to
obtain audit evidence
LO2.4.3: Explain what information can
be used as audit evidence using simple
examples
5 Audit sampling (ISA 530) 2 LO2.5.1: Explain audit sampling,
statistical sampling and sampling and
non-sampling risk using simple
examples
LO2.5.2: Explain what matters are
considered by auditors in respect of
sample design, size and selection of
items for testing using simple examples
6 Substantive procedures (ISA
330)
2 LO2.6.1: Explain the nature, extent and
timing of substantive procedures using
simple examples
7 Tests of controls (ISA 330) 2 LO2.7.1: Explain the nature, extent and
timing of test of controls using simple
examples
LO2.7.2: Explain how auditors evaluate
the operating effectiveness of controls
8 Analytical procedures (ISA
520)
2 LO2.8.1: Explain the nature and
purpose of substantive analytical
procedures using simple examples
LO2.8.2: State the purpose of analytical
procedures performed near the end of
the audit
9 Documentation (ISA 230) 2 LO2.9.1: Explain the nature and
purpose of audit documentation
LO2.9.2: Describe the form, content
and extent of audit documentation
LO2.9.3: Understand the nature of
assembly of the final audit file
76
Syllabus
Ref
10 Understanding of audit
opinion and form of audit
report under the Companies
Ordinance 1984
2 LO2.10.1: Briefly state the contents of
the auditors report
LO2.10.2: State the penalty for non-
compliance with provisions related to
the audit report
C Specific areas
1 External confirmations (ISA
505)
2 LO3.1.1: Describe the significance of
using external confirmation procedures
for obtaining relevant and reliable audit
evidence
LO3.1.2: Describe the steps involved in
external confirmation procedures
LO3.1.3: Differentiate between the
positive confirmation request and
negative confirmation request
2 Subsequent events (ISA
560)
2 LO3.2.1: Explain the meaning and
purpose of a subsequent events review
3 Written representation (ISA
580)
2 LO3.3.1: Discuss the nature of written
representations as audit evidence
LO3.3.2: Discuss the circumstances
where written representations are
necessary and the matters on which
representations are commonly obtained
4 Consideration of related
parties (ISA 550)
2 LO3.4.1: Describe the term related
party using simple examples
LO3.4.2: Discuss how related party
transactions can give rise to the risk of
material misstatement using simple
examples
LO3.4.3: Briefly describe the audit
procedures and related activities to
obtain information relevant to identifying
the risks of material misstatement
associated with related party
relationships and transactions
5 Using the work of
component auditors, internal
audits and auditors experts
(ISA 600, ISA 610 and ISA
620)
2 LO3.5.1: Explain the responsibility of
the group engagement partner in
respect of acceptance and continuance,
overall audit strategy, understanding
the group, its component and their
77
Audit and Assurance
Syllabus
Ref
environment, their auditor and
materiality
LO3.5.2: Explain the relationship
between the external auditor with
internal auditors and auditors experts
LO3.5.3: Discuss how external auditors
determine whether and to what extent
the use the work of internal audit
LO3.5.4: Discuss using examples how
external auditors uses the specific work
of internal audit
LO3.5.5: Discuss how the external
auditor uses the work of an auditors
expert when that work is used to assist
in obtaining sufficient appropriate audit
evidence
6 Review of interim financial
statements by the
independent auditor (ISRE
2400)
2 LO3.6.1: Explain the objective of a
review of interim financial statements
and how it differs from audit
LO3.6.2: State the terms of
engagement which may be included in
the engagement letter
LO3.6.3: Describe the procedures
generally adopted by the practitioner to
obtain evidence in review engagements
D Computer programming and IT controls
1 Benefits and limitations of
flowcharts
1 LO4.1.1: State the benefits and
limitation of flowcharts using simple
examples
2 Types of flowcharts 1 LO4.2.1: Classify and distinguish
between types of flowcharts, namely,
linear, deployment and opportunity
flowcharts
LO4.2.2: Describe the macro, mini and
micro level details of flowcharts
3 Drawing flowcharts for
specific situations/programs
1 LO4.3.1: Draw different types of
flowcharts for given situations
4 Control design 1 LO4.4.1: Describe appropriate controls
while designing the system using
simple examples
5 General controls 1 LO4.5.1: Describe general controls and
78
t s n I e h T i x l a n o i t a n r e t n I f l o o W e l i m E itute of Chartered Accountants of Pakistan
Syllabus
Ref
classify them into environment,
development, maintenance and
operational controls using simple
examples
6 Preventative, detective and
corrective controls
1 LO4.6.1: Describe preventative,
detective and corrective controls using
simple examples
7 Audit trails 1 LO4.7.1: Describe the concept of an
audit trail in a computerized
environment using simple examples
8 Logical access controls 1 LO4.8.1: Describe logical access
controls for a given situation/system
9 Physical access controls 1 LO4.9.1: Describe physical access
controls for a given situation/system
10 Program security techniques 1 LO4.10.1: Describe checks/controls
into the software system to protect data
from corruption and unauthorized
access
11 Data security and public
networks
1 LO4.11.1: State controls over data
transmission
LO4.11.2: Describe data encryption
techniques for transmission of data
over public networks
LO4.11.3: Describe communications
protocol
LO4.11.4: Understand the Open
System Interconnection (OSI) model
12 Monitoring and surveillance
techniques
1 LO4.12.1: Describe the usefulness of
system logs for analyzing a systems
performance
E Professional ethics
1 Fundamental principles
(sections 100 to 150 of the
Code of Ethics for Chartered
Accountants)
2 LO5.1.1: Describe with simple
examples the fundamental principles of
professional ethics of integrity,
objectivity, professional competence
and due care, confidentiality and
professional behaviour
LO5.1.2: Apply the conceptual
framework to identify, evaluate and
address threats to compliance with
fundamental principles
79
Audit and Assurance
Syllabus
Ref
LO5.1.3: Understand the threats and
circumstances that cause threats of
self-interest, self-review, advocacy,
familiarity, and intimidation
LO5.1.4: Discuss using simple
examples the safeguards to offset the
threats to compliance with the
fundamental principles
2 Client and engagement
acceptance (section 210 of
the Code of Ethics for
Chartered Accountants)
2 LO5.2.1: Explain using simple
examples the matters to be considered
and the procedures that an audit
firm/professional accountant should
carry out in the following
circumstances:
Client acceptance
Engagement acceptance
Changes in a professional
appointment

80

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