INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF PAKISTAN

GATEWAY ASSESSMENT EXAMINATION SYLLABUS FOR

TWO / FOUR YEARS MASTERS IN COMMERCE / BUSINESS ADMINISTRATION

Indicative Gird
Part Course of Studies Weightage
A Fundamentals of Cost and Management Accounting 35%
B Commercial Laws and Professional Ethics (Professional Ethics portion only) 15%
C Financial Accounting 35%
D Information System & IT Audit (IT Audit portion only) 15%
Total 100%

SYLLABUS CONTENTS

FUNDAMENTALS OF COST & MANAGEMENT ACCOUNTING [35%]

1- Accounting for Materials  The Basics of Process Costing
 Accounting for Material Costs  Losses in Process Costing
 Economic Order Quantity Model  Treatment of normal loss, abnormal loss & abnormal gain
 Accounting for defective, spoiled and waste material  Losses with Scrap Value
 Losses with Disposal Cost
2- Accounting for Labour  Valuing Closing Work in Progress
 Remuneration methods  Valuing opening Working in Process: FIFO & Weighted
 Accounting for Labour Costs Average Cost Methods
3- Accounting for Overheads  Accounting for Scrap, spoilage & rework
 Blanket Absorption Rates and Departmental Absorption  Treatment of transfer of units to other department
Rates  Preparation of process account and all other relevant
 Reasons of and accounting for over and under absorption account
of overheads  Preparation of complete cost of production report

4- Prepare Statement of Cost of Goods Manufactured and 8- Joint Products and By-Products
Sold  Dealing with Common Costs
 Joint Products in Process Accounts
5- Absorption and Marginal Costing  Accounting treatment of By- Products
 Calculation of Profit under marginal and absorption  Methods of Allocation of joint cost
costing  Decision to sale by-product at the time of separation or by
 Reconciliation of Profit further process
 Marginal costing and breakeven analysis for single
product 9- Variance analysis
 Contribution margin to sales ratio (C/S Ratio)  Purpose of Variance Analysis
 Break-even in units & value  Direct Material Variances
 Margins of safety (M/S Ratios)  Direct Labour Variances
 Break-Even Graph  Variable Overhead Variances
 Fixed Overhead Variances
6- Costing Methods  Reasons for Cost Variances
 Job Costing
 Batch Costing Recommended Book:
Cost Accounting
By Milton F. Usry / Lawrence Hammer / Adolph Matz
7- Process Costing
COMMERCIAL LAWS AND PROFESSIONAL ETHICS [15%]
1- Personal Ethics  Conceptual framework Approach
 Ethics and its importance  Relationship and circumstance that may create threat to
 Difference between Immoral, Amoral and Moral the fundamental ethical principles
 Major resource of ethical values (Religion, Philosophy,  Categories of threat to fundamental principles of ethics
Culture and Law)  Measures (safeguards) taken to eliminate threat
 Moral Reasoning (Moral Right Views, Individualism  Importance of integrity and objectivity
View, Utilitarian View and Justice View)  Communicating with those charged with government
 Values, Types of values, Terminal Values, Instrumental  Situations that may cause risk to integrity and objectivity
Values  Importance of confidentiality and the risk of disclosure of
information
2- Professional Ethics  Situations when confidential information may be disclosed
General Application of the Code of Ethics issued by
IFAC and SAFA Part - A 3- Ethical Conflict
 Role of ethical codes and importance to the professional  Ethical Conflicts and Approaches for Controlling Ethical
accountant Behaviour
 Difference between rule based and principle based ethical  Ethical Conflict of a professional accountant
codes  Causes of ethical conflicts
 Fundamental principles of IFAC code of ethics  Measures to be taken to resolve ethical conflicts

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 INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF PAKISTAN
Recommended Book:
1. Business Ethics
By O.C.Ferrell, John Fraedrich, Linda Ferrell by Cengage
Learning
FINANCIAL ACCOUNTING [35%]
1. The Conceptual Framework
 Underlying assumptions for preparation of financial
statements
 Qualitative characteristics of financial statements and
the compliance with accounting standards
 The concept of financial and physical capital
maintenance and their affects in determination of
profits
 Limitations of financial statements
2. IAS 1 Presentation of Financial statements
 Recognition criteria and subsequent measurement of
elements of financial statements
 Preparation of statement of profit and loss/Statement
of Comprehensive Income
 Statement of Other Comprehensive Income
 Preparation of statement of changes in Equity
 Preparation of statement of Financial Position
 Disclosure requirement of notes to the accounts
3. Reporting Financial Performance
IAS – 8: Accounting Policies, Changes in Accounting
Estimates & Errors
 Selection of accounting policies
 Changes in accounting policies
 Changes in accounting estimates
 Correction of prior period errors
 Disclosure
IAS – 18: Revenue Recognition
Recognition criteria of Revenue from
 Sale of goods and Service
 Interest , Royalties & Dividend
 Disclosures
4. Other Reporting
IAS – 10: Event after the Reporting Periods
 Accounting treatment of Adjusting & Non-Adjusting
Events
 Disclosures
IAS – 37: Provisions, Contingent Liabilities &
Contingent Assets
 Recognition criteria of provision
 Difference between provision & contingent liability
 Recognition criteria of contingent assets
 Onerous executory contract
 Restructuring
 Disclosures
5. Accounting for Non-Current Assets
IAS – 16: Property, Plant & Equipment
 Cost calculation
 Initial recognition & subsequent measurement
 Depreciation
 Cost model & Fair value model
 Assets Disposal
 Disclosures
IAS – 23: Borrowing Costs
 Accounting treatment of capitalization of borrowing
costs
 General borrowing
 Specific borrowing
2. Handbook of the Code of ethics
By IFAC/SAFA
6. Accounting for Intangible Non-Current Assets
 IAS 38 Intangible Assets
 Accounting treatment of Intangible assets
7. IAS-36: Impairment of Assets
 Cash Generating Units and impairment loss of its
assets
 Impairment of Goodwill
 Accounting treatment of an Impairment Loss
8. IAS-17: Leases
 Characteristics of Leases
 Accounting for Leases
 Accounting for sale and lease back
 Concept of bargain purchase option
 Concept of guaranteed residual value
9. IAS -7: Statements of Cash Flows
 Preparing and interpreting Statement of Cash Flow of
a single company
10. IAS – 11: Construction Contracts
 Contract Revenue and Costs
 Recognition and measurement of Contract Revenue
and cost
 Percentage of completion by using cost to cost method
and work certified method
 Presentation in Financial Statement and Disclosures
11. Consolidated Statement of Financial Position (Single
Parent and Single Subsidiary Company)
 conditions when an entity is required to prepare
consolidated financial statements
 Circumstances when exemptions are allowed from the
preparation of consolidated financial statements.
 Pre and Post-Acquisition Profits and accounting for mid-
year acquisition
 Non-Controlling Interest
 Valuing investment and Net Assets acquired in a
subsidiary on Fair Values
 Accounting treatment of Unrealized Profit and Goodwill
 Preparation of consolidated statement of financial position
12. Consolidated Statement of Comprehensive Income
(Single Parent and Single Subsidiary Company)
 Intra-Company Transactions and why they need to be
eliminated
 Other Consolidated Income Statement Adjustments
 Preparation of consolidated statement of comprehensive
income
Recommended Book:
1. Gripping: IFRS Pakistan Edition
By Cathrynne Sowden-Service
Or
2. International Financial Reporting Standards
By IFRS Foundation / ICAP
3. Intermediate Accounting (IFRS Vol: 1&2)
By Donald E. Kieso / Jerry J. Weygandt / Terry D.
Warfield
4. Lease Accounting, Consolidated Financial Statements
Accounting for Construction Contract and Cash flow
Statement
By Javed H. Zuberi
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 INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF PAKISTAN
INFORMATION SYSTEM & IT AUDIT (IT AUDIT PORTION ONLY) [15%]
1. The Process of Auditing Information Systems  Information system maintenance practices
 Audit Mission and Planning  library control software
 Role and responsibilities of Internal, external and IT  Review of the practice of project management tools
Auditors, and techniques.
 Risk Assessment and Analysis
 Risk based Audit Approach 5. Information Security Management
 Compliance and substantive testing  Understanding of Facilities (Data centres, outsourced
 Internal Controls and their types, objectives and facilities, Storage, media libraries, backup vaults, UPS
procedures. & Disaster recovery sites)
 Performing an IT audit  Antivirus Software Implementation Strategies
 CAATs  Program and Data security techniques,
 Control self assessment.  Monitoring and surveillance techniques
 Environment Controls
2. Governance and Management of I.T  Smoke detectors
 Corporate and IT Governance  FIRE Suppression Access management controls
 IT Governance Frameworks  Physical design and access controls
 Policies and Procedures  Logical Access controls (user authorization matrix &
 Sourcing Practices Password managements / password change
 IS Roles and Responsibilities procedures)
 Segregation of duties and Controls within IS.  Network security (encryption, firewalls), and
 Auditing IT Governance, Structure and Humidity / Temperature)
Implementations.  Media Sanitization
 Auditing Information Security Management
3. Auditing Infrastructure and Operations
 Review of hardware and Operating Systems 6. Business Continuity and Disaster Recovery
 Database, local area network, network operating,  Defining a Disaster
control and information system operations reviews  BCP and DRP
 Lights-Out Operations  BCP Process
 Application controls and their objectives  Business Continuity Policy and Planning
 File creation;  Incident Management
 Data Conversion  Business Impact Analysis
 Input and output  Development of BCP
 Problem management reporting reviews  Insurance
 Hardware availability  Plan Testing
 Utilizing reporting and scheduling reviews.  Auditing Business Continuity

4. Auditing Systems Acquisition / Development process Recommended Book:

 Review of acquisition process for outsourcing
CISA Review Manual
 Risk of inadequate system development life cycle
By Information Systems Audit and Control Associations, Inc
(SDLC) and review of development procedures and
methodologies

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