Accountancy & Auditing

Accountancy And Auditing

Accountancy And Auditing

Accountancy And Auditing Paper-I (MARKS-100)

(A) Financial Accounting (50 Marks)
I. Fundamental Accounting Principles, Concepts, Assumptions and Conventions:
Nature and Scope of Accounting, Accrual/Matching Concept, Consistency of
Presentation and Comparability, True and Fair View, Neutrality, Materiality, Prudence,
Completeness, Understandability and Usefulness, Going Concern, and Substance
over Form.

II. Accounting Cycle/Process and Financial Statements in Accountancy And Auditing : Transactions and/or Events,
General Journal, General Ledger, Trial Balance (Unadjusted),Adjusting Entries and
Adjusted Trial Balance, Work Sheet, Financial Statements including Income
Statement, Statement of Financial Position (Balance Sheet), Statement of Cash
Flows and Statement of Changes in Equity in accordance with the Financial Reporting
Framework as specified by International Accounting Standard Board (IASB) through
IFRSs/IASs, and by Securities and Exchange Commission of Pakistan through
Companies Ordinance 1984, and Closing and Reversing Entries.

III. Attributes, and Significance of Accounting Information: Attributes of Accounting
Information, Information/Reporting Requirements of various Users/Stakeholders of
Financial Statements including External (Investors/Shareholders, Creditors, Suppliers,
Lenders/Financiers, Government Agencies etc.) and Internal (Board of Directors,
Partners, Managers, Employees etc.) Stakeholders.

IV. Accounting for common Legal Forms of a Business: Accounting Principles and
Financial Statements of Sole-proprietorships, Partnerships and Joint Stock
Companies including Banking Companies (Excluding Advanced Topics like
Amalgamation, Capital Reduction, Consolidation etc.)

V. Accounting for Associations Not-for-profit, and for Public Sector in Accountancy And Auditing : Accounting
Principles and Financial Statements – of Associations Not-for-profit, and – of Public
Sector Entities as per Standardized Financial Reporting Framework provided by
International Public Sector Accounting Standards (IPSAS) Board and Practices being
followed in the country.

VI. Accounting for Non-current Tangible Assets: Fundamental Concepts and
Principles concerning Non-current Assets: Cost; Depreciable Amount; Depreciation;
Fair Value; Property, Plant and Equipment; Residual Value; and Useful Life.
Depreciation Methods and their Application (as specified by International Accounting
Standards Board):Straight-line Method; Reducing Balance Method; Number of Units
Produced and basic know-how of other Methods/Techniques being commonly used
by the Industry.

VII. Fundamental and Technical Analysis of various Forms of Organizations:
Financial Statements’ Analysis including both Horizontal (Measuring Change) and
Vertical (Ratio) Analysis including Liquidity Ratios, Activity Ratios, Debt Ratios,
Profitability Ratios and Market Ratios; Technical and Industry Analysis.

(B) Cost and Managerial Accounting (50 Marks)

VIII. Fundamental Cost Accounting Principles and Concepts: Nature and Scope of
Cost and Managerial Accounting; Cost Concepts, Elements and Classification;
Underlying Differences among Financial, Cost, and Management Accounting.
IX. Accounting for Material, Labour and Factory Overheads (FOH):Recognition and
Valuation Principles for Material Inventory, and Methods to control Material Inventory;
Calculation/Measurement and Accounting for Payroll for all forms of Labour, Time
Rate and Piece Rate Systems; Commonly used Group Incentive Schemes; Factory
Overhead Costs and FOH Rate, Departmentalization of FOH Costs, their Allocation,
Apportionment and Reapportionment (Primary and Secondary Distributions), Methods
for Secondary Distribution including both Repeated Apportionment/Distribution and
Algebraic Method.

X. Costing for Specific Jobs, and Process Costing in Accountancy And Auditing: Nature of a Specific Job, and
Job-order Costing; Process Flow and Process Costing by the use of Cost of
Production Report (CPR).
XI. Management Accounting for Planning, Decision-making and Control:
Budgeting and its Use: Meaning and Nature of a Budget; Major Forms of a Budget
including Production and Sales Budget, Cash Budget, Flexible Budgets, Zero-based
Budget, Master Budget etc.

Break-even Analysis: Difference between Marginal and Absorption Costing
Techniques; Concept of Relevant Cost; Application and Use of Contribution Margin
and other Concepts for Planning and Decision-making (under Break-even Analysis)
Variance Analysis: Meaning and Use of Standards and Variances; Major
Classification of Variances including Material, Labour and FOH Variances, and their

Accountancy And Auditing Paper-II (MARKS-100)

(A) Auditing (40 Marks)
I. Fundamental Auditing Principles and Concepts in Accountancy And Auditing : Audit and Auditing, True and Fair
View, Audit Assertions, Reasonable Assurance, Documentation and Audit Evidence,
Audit Program, Audit Risks, Computer Information Systems (EDP Systems) and
Computer-assisted Audit Techniques (CAAT), Inspection, Fraud, Going Concern,
Audit Materiality, Misstatement, Governance and Premise, Tests of Control and
Substantive Procedures.

II. Audit Considerations, Dimensions and Conduct: Internal Control System and
Internal Audit, Internal VS External Audit, Responsibility for Financial Statements,
Audit Planning, Scope of an Audit, Objectives of an Audit, Inherent Limitations of an
Audit, Risk Assessment and Management, Internal Audit and Corporate Governance,
Classification of Audit, Qualities of an Auditor, Auditing in Computer Information
Systems (EDP Systems) and Computer-assisted Audit Techniques, General Auditing
Principles and Techniques commonly applicable to various Types of Undertakings
including Merchandizing, Manufacturing, Banking, Insurance, Investment Entities etc.,
Audit Performance and Audit Completion.

III.Role and Responsibilities of an Auditor: Auditor’s professional and legal Rights,
Responsibilities & Duties, and Liabilities; Auditor’s Opinion and Report, and their
Accountancy And Auditing

classification (Types); – as specified under the Companies Ordinance 1984, and in the
handbook of IFAC.

(B) Business Taxation in Accountancy And Auditing (30 Marks)

IV. Tax Structure, and Fundamental Concepts vis-à-vis Income Tax in Pakistan in Accountancy And Auditing : Tax
Structure in Pakistan; Fundamental Definitions/Terminologies defined under Section 2
of the Income Tax Ordinance 2001.
V. Income Tax and Sales Tax Principles, and their Application in Accountancy And Auditing: Selected Provisions
from Income Tax – Income for Tax Purposes [Section 4, 9 & 10], Heads of Income
[Section 11], Tax Payable on Taxable Income [First Schedule to the Ordinance],
Salary Income and Taxation [Sections 12 to 14], Income from Property [Sections 15 &
16], Income from Business[Sections 18 to 20], Capital Gains[Sections 37 to38],
Income from other sources[Section 39, 40, 101(6), 111],Tax Credits [Sections 61 to
65], Taxation of Individuals, AOPs and Companies [Sections 86, 92, 94], Due Date for
Payment of Tax [Section 137], Deduction of Tax at Source/With-holding Tax [Sections
147, 149, 153, 155]and related Income Tax Rules 2002.

Selected Definitions and Provisions from Sales Tax –Scope of Tax [Section 3],
Exempt supply [Section 2(11)], Goods [Section 2(12)], Input Tax [2(14)], Registered
person [Section 2(25)], Supply [Section 2(33)], Tax [Section 2(34)], Retail Price and
Retailer [Section 2(27)& 2(28)], Taxable Activity [Section 2(35)], Taxable Supply
[Section 2(41)], Tax Fraction [Section 2(36)], Tax Period [Section 2(43)], Time of
Supply [Section 2(44)], and Determination of Tax Liability [Section 7].

(C) Business Studies, and Finance in Accountancy And Auditing (30 Marks)

VI. Business Studies: Nature and Scope of a Business Entity, Contemporary
Challenges posed to a Business; Common Legal Forms of a Business Entity – Sole proprietorship, Partnership, Joint Stock Company, their Features, Formation and
Management; Business Combinations and their Scope; Business Cycle and its
Implications; Role of Information Technology in Business.
VII. Finance: Meaning, Nature and Scope of Finance, and Financial Management;
Common Modes (Types) of Business Finance – Short-, Medium-, and Long-term
Financing; Nature and Scope of Financial Markets and Institutions; Features and
Classification of Financial Markets; Financial Management Techniques for Decision making: Time Value of Money, Cost of Capital and Capital Budgeting Techniques.

Suggested Reading For Accountancy And Auditing

S.No.Title of BooksAuthor
Accounting Paper – I (100 Marks)
1Financial Accounting, and Intermediate
Kieso, Weygandt and
2Fundamentals of Accounting PrinciplesWild. Larson. Chiappetta
3Accounting for Decision-makingMeigs, William and Haka
5Principles and practice of Book Keeping and
Vickery, B.G
6Financial AccountingM. Hanif and A. Mukherjee
7Principles of Accounting, and Advanced
Sohail Afzal
8Principles of Accounting, and Advanced
M.A Ghani and Ejaz
9Cost Accounting – Planning and controlUsry, Hammer, Matz
10Managerial AccountingPeter C. Brewer, Ray H.
Garison, Eric W. Noreen.
11Cost AccountingJain and Narang
12Cost AccountingNisar ur Din.
Accounting Paper – II (100 Marks)
13Auditing- Principles and TechniquesS. K. Basu
14AuditingDickseee, L.R
15Practical AuditingSpiecer and Pegler
16Companies Ordinance 1984SECP
17AuditingS. K. Millichamp, ELBS
18Handbook of International Quality Control,
Auditing, Review and Other Assurance
19AuditingM. Irshad
20Advanced AuditingProf. Dr. Khuaja Amjad Seed
21Income Tax Ordinance 2001FBR
22Introduction to Taxation / Synopsis of Taxes in
Mirza Munawar Hussain
23Law in Practice – Income and Sales TaxAbdul Razzaq
24Business TaxationIjaz Ali Waince
Accountancy And Auditing
S.No.Title of BooksAuthor
25Principles of Managerial FinanceLawrence J.Gitman
26Fundamental of Financial ManagementVan Horne. Wachowicz Jr.
27Basic Business FinanceHunt, Williams and
28Business StudiesHall, Jones and Raffo
29Foundations of Financial Markets and
Fabozzi, Modigliani, Jones
and Ferri
30Contemporary BusinessKurtz and Boone
31Principles and Practice of CommerceStephenson
32Introduction to BusinessM. Saeed Nasir
Accountancy And Auditing

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