Paper –II: For technical discipline ECONOMICS
(THE SYLLABUS IS ONLY ILLUSTRATIVE AND NOT EXHAUSTIVE)
Section I : Economics (50% weightage)
1. Micro Economics : Theory of Consumer Behaviour, Theory of Firm, Theory of Markets, Theory of Distribution and General Equilibrium
2. Macro Economics : National Income Accounting, Macro Economic Stabilisation Policies, Fiscal and Monetary Policies – Classical, Keynesian and Monetarists, Rational Expectation and Supply Side Economics, Public Finance – Theory of Taxation, Expenditure and Borrowing/Debt.
3. Economics of Development and Planning – Theory of Growth and Development, Regional Imbalances, Planning – Types, Models and Evaluation of Plans, Project Economics, and Economic & Financial sector reforms.
4. International Economics – Theories of Trade, Foreign Exchange Market, Balance of Payments, International Monetary System and WTO.
5. Money & Banking
Section II : Agricultural Economics (30% weightage)
1. Basic Principles of Farm Management
2. Role of Agriculture in Economic Development
3. Factor Market – Land Market, Labour Market, including wages and Capital Market
4. Agricultural Marketing, Agricultural Prices and Terms of Trade
5. Rural Credit Structure – Formal and Informal, Capital Formation in Agriculture
6. Development Programmes including Poverty Alleviation and Rural Employment
7. Agricultural Policy and Planning
Section III : Elementary Statistics for Economists (20% weightage)
1. Measures of central tendency and dispersion – correlation, regression, Time-series analysis and index number
2. Theory of Probability, Sampling theory, Sampling Design and its application
3. Statistical Inference and Estimation, Statistical Tools and their application in Economic Analysis and Input-Output Analysis
(THE SYLLABUS IS ONLY ILLUSTRATIVE, NOT EXHAUSTIVE)
I. FINANCIAL ACCOUNTING
1. Meaning; Objectives; Basic Accounting: Principles, Concepts and Conventions; Limitations of Financial Accounting.
2. Preparation of Financial Statements – Nature of Financial Statements; Capital and Revenue Expenditure; Trading Account; Profit & Loss Appropriation Account and Balance Sheet; Limitation of Financial Statements.
3. Analysis & Interpretation of Financial Statements – Tools of Financials Statements Analysis: Ratio Analysis – different types of ratios; Advantages and Limitation of ratio analysis.
4. Depreciation : Reserves and Provisions – Meaning; Need for providing Depreciation; Methods of providing Depreciation; Provisions and Reserves; Choice of Methods; Objectives of Depreciation Policy.
5. Inventory Valuation – Nature and Importance of Inventory Valuation; Types of Inventory Systems; Methods of Inventory Valuation; Choice of Method.
6. Developments in Accounting – Interim Reporting – Segment Reporting – Value added Statement – Corporate Social Reporting – Human Resource Accounting – Accounting for Intangible Assets – Accounting for Financial Instruments – Environmental Accounting – Inflation Accounting.
7. Statement of Sources and Application of Funds – Meaning of Funds; Distinction between Funds and Cash; Preparation of Fund Flow Statement; Analysis of flow of funds; Utility of Fund Flow Statement; Preparation of Cash Flow Statement ; Utility of Cash Flow Statement.
8. Preparation of Final Accounts of Banking, Insurance and Electricity Companies – Prudential Norms like Capital Adequacy Ratio, Non-Performing Assets – Provisions therefore for Banks and Financial Institutions.
9. Accounting Standards, Accounting Standards Interpretations and Guidance Notes on various accounting aspects issued by the ICAI and their applications. 10. Overview of International Accounting Standards (IAS)/ International Financial Reporting Standards (IFRS), Interpretations by International Financial Reporting Interpretation Committee (IFRIC), Significant difference vis-a-vis Indian Accounting Standards.
11. Consolidated Financial Statements of Group Companies, Concept of a Group, purposes of consolidated financial statements minority interest, Goodwill, Consolidation procedures.
12. Financial Reporting by Mutual Funds, Non-banking finance companies, Merchant bankers, Stock & Commodity market intermediaries.
II. MANAGEMENT ACCOUNTING
1. Meaning and scope of Management Accounting; Financial Accounting Vs. Management Accounting; Role of Management Accounting; Function and Position of Controller.
2. Variable Costing – Fixed Costs and Variable Costs; Distinctions between viable costing and absorption costing; application of Variables Costing as a technique; Differential costing and decision making.
3. Management Control System – distinction between strategic planning, Operational Control and Management Control System; Responsibility Accounting; Transfer Pricing; Tools of Control – Residual Income and Return on Investment Performance Budgeting; Economic Value Added.
4. Appraisal of Firms – Objectives; Uniform Costing: Ratio Based Comparison; Credit Rating; Risk Management.
5. Appraisal of Projects – Methods of appraisal – preparation of project report – Economic, Technical, Financial feasibility – Techniques for evaluation of projects like Pay Back Method, Discounted Cash Flow, Net Present Value, Internal Rate of Return, etc. – Sensitivity analysis in capital budgeting – Impact of inflation in capital budgeting – Risk analysis in capital budgeting – Social cost benefit analysis – Simulation and decision tree analysis.
III. FINANCIAL MANAGEMENT
i. Marginal Costing – Cost-Volume-Profit Analysis, Profit Planning; Break-even analysis – Break even Point and Break-even chart. ii. Methods of costing – Job costing – Contract costing – Batch costing – Process costing – Unit costing – Operation costing and Operating costing.
iii. Cost of Capital – cost of different sources of finance – Weighted average cost of capital – Marginal cost of capital – Concepts of operating and financial leverage – Capital structure patterns – Designing optimum capital structure – Different sources of finance – Long, medium and short term finance.
iv. Money market and their operations.
v. Business valuations – Mergers, Acquisitions and Corporate restructuring.
vi. Budgetary Control – Meaning and Objectives; Operation of Budgeting System; Types of Budgets; Preparation of Sales Budget, Production Budget, Cash Budget, Master Budget; Flexible Budgeting; Zero Budgeting.
vii. Stand Costing – Meaning of Standard Costing; distinction between Standard Costing and Budgeting Control; Advantages of Standard Costing; Setting up of Standards; Variance Analysis – Material, Labour and Overheads.
viii. Working Capital Management – Factors affecting Working Capital requirements; Assessment of Working Capital; Inventory Management; Receivable Management; Cash Management; Method of Financing Working Capital; different forms of bank credit; Working Capital and Banking Policy.
ix. Asset Liability Management – Components of assets and liabilities in Bank’s Balance Sheet and their management, liquidity management – Interest Rate Risk Management, Management of Exchange Risk – RBI guidelines.
x. Risk Management – Risk and Banking business, Risk Regulations in Banking Industry, Market Risk, Credit Risk, Operational Risk.
xi. (a) Indian Capital Market : Role of various primary and secondary market institutions.
(b) Capital Market Instruments : Financial derivatives – Stock futures, Stock options, Index futures, Index options, Interest rate futures. Option valuation techniques : Binomial model, Black Scholes Option Pricing Model, Greeks – Delta, Gamma, Theta, Rho and Vega. Pricing of Futures – Cost of carry model. OTC derivatives – Swaps, Swaptions, Forward Rate Agreements (FRAs), Caps, Floors and Collors.
xii. Security and Bond Analysis
Fundamental Analysis – Economic analysis, Industry analysis and Company analysis. Bond valuation, Price Yield relationship, Bond Price forecasting – application of duration and convexity, Yield curve strategies. Technical Analysis – Market cycle model and basic trend identification, different types of charting, support and resistance, price patterns, moving averages, Bollinger Bands, momentum analysis.
xiii. Portfolio Theory and Asset Pricing Efficient Market Theory – Random Walk Theory; Markowitz model of risk return optimazation
Capital Asset Pricing Model (CAPM) Arbitrage Pricing Theory (APT) Sharpe Index Model
Portfolio Management – Formulation, Monitoring and Evaluation Equity Style Management Principles and Management of Hedge Funds International Portfolio Management
xiv. Financial Services in India : Investment Banking, Retail Banking, Mutual Funds, Money Market Operations.
i. Auditing – Nature and scope – Audit process – Objectives of audit – basic principles governing an audit – Types of audit – Relationship of auditing with other subjects – Internal Audit and External Audit – Audit & Inspection.
ii. Planning and Progaramming of Audit – Division of work, supervision and review of audit notes and working papers; planning the flow of audit work.
iii. Conduct of Audit – Audit Programme; Audit Note Book; Working Papers and Audit Files.
iv. Internal Control – Internal Control, Internal Check, Internal Audit and Concurrent Audit.
v. Vouching – General consideration vouching of payments and receipts; Vouching of payment into and out of Bank; Vouching of Goods on consignment, Sale on approval basis, Empties, Sale under hire-purchase system and various types of allowances to customers.
vi. Verification – Meaning; General Principles; Verification of Cash in hand and Cash at Ban; Verification and Valuation of Investments and Inventories; Loans
Bills Receivables; Free hold and Leasehold property; Debtors, Plant and Machinery; Verification of different liabilities. vii. Audit of Limited Company – Statutory requirements under the Companies Act, 1956, – Audit of branches – Joint Audit – Concepts of true and fair and materiality and audit risk in the context of audit of companies.
viii. Dividends and divisible profits – financial, legal and policy considerations with special reference to depreciation – Audit reports – Qualification and Notes on accounts – Special report on offer documents.
ix. Audit under Income-Tax and Indirect Taxes – Special features of audit of banks, insurance companies, Co-operative Societies and Non-banking Financial Companies – Audit of Incomplete Records – Special audit assignments like audit of bank borrowers – Inspection of special entities like banks, financial institutions, etc. – Investigation including due diligence.
x. Concept of Cost Audit, Management Audit, Operational Audit, Environmental Audit and Entry Audit.
xi. Audit under computerised environments – Computer Auditing – Specific problems of EDP audit – need for review of internal control especially procedure controls and facility controls – techniques of audit of EDP output – use of computer for internal and management audit purpose – test packs – computerised audit programme – involvement of the auditor at the time of setting up the computer system.
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