The next examinations of Chartered Accountancy (CA) Final course after Nov 2016, will be held in May, 2017. The Institute of Chartered Accountants of India (ICAI) has announced the applicability of Standards, Guidance Notes and Legislative Amendments etc. for May, 2017 – Final Examination.
Accordingly, you may go through these topics and amendments viz. Accounting Standards (ASs), Standards on Auditing (SAs), Guidance Notes (GNs), Circulars, Notifications, Companies Act and Finance Act etc. which are very important and relevant for CA Final May 2017 examinations.
Paper 1: Financial Reporting
39 Indian Accounting Standards (Ind AS) have been prepared by the National Advisory Committee on Accounting Standards (NACAS) and the Ministry of Corporate Affairs (MCA), Government of India has now notified Roadmap in a phased manner from 2016-17 onwards for applicability of Ind AS vide Notification No. G.S.R. 111(E) dated 16 February, 2015, for compliance by the class of companies specified in the said roadmap.
All 39 IFRS converged Indian accounting standards (Ind AS) has been hosted on MCA official website MCA.GOV.IN along with the Companies (Indian Accounting Standards) Rules, 2015 which has come into force on the 1st day of April, 2015. After notification of Ind AS in February, 2015, the CA Institute has also announced dated 23/11/2015 that Ind AS 32, Ind AS 107 and Ind AS 109 would be applicable in place of AS 30, AS 31 and AS 32 to the topic ‘Accounting for Financial Instruments’.
Accordingly, Ind AS 32 “Financial Instruments: Presentation”, Ind AS 107 “Financial Instruments: Disclosures” and Ind AS 109 “Financial Instruments” shall be applicable on the topic ‘Accounting for Financial Instruments’ instead of AS 30 “Financial Instruments: Recognition and Measurement”, AS 31 “Financial Instruments: Presentation” and AS 32 “Financial Instruments: Disclosures” in May, 2017 examinations for Paper-1: Financial Reporting at the Final level. In view of the complexities involved, simple practical problems involving conceptual issues or application issues may be asked in the examination.
Further, some topics has been newly included by ICAI vide notification dated 30th May, 2015 in the syllabus of CA Final Course May, 2016 exams onward.
i) Introduction of Indian Accounting Standards (Ind AS);
ii) Comparative study of ASs vis-a-vis Ind ASs; and
iii) Carve outs/ins in Ind ASs vis-à-vis International Financial Reporting Standards (IFRSs).
Note that CA Institute has excluded following topics from the syllabus of CA Final and the same would not be applicable for May, 2017 Examination:
i) International Financial Reporting Standards (IFRS);
ii) Overview of International Accounting Standards (IAS);
iii) Significant differences vis-a-vis Indian Accounting Standards;
iv) Understanding of US GAAPs, Applications of IFRS and US GAAP;
v) Interpretations by International Financial Reporting Interpretation Committee (IFRIC).
Following are the list of all 28 Accounting Standards (AS) which are fully applicable for CA Final May, 2017 examinations:
AS 1: Disclosure of Accounting Policies
AS 2: Valuation of Inventories
AS 3: Cash Flow Statements
AS 4: Contingencies and Events Occurring after the Balance Sheet Date
AS 5: Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies
AS 6: Depreciation Accounting
AS 7: Construction Contracts (Revised 2002)
AS 9: Revenue Recognition
AS 10: Property, Plant and Equipment (2016)
AS 11: The Effects of Changes in Foreign Exchange Rates (Revised 2003)
AS 12: Accounting for Government Grants
AS 13: Accounting for Investments
AS 14: Accounting for Amalgamations
AS 15: Employee Benefits
AS 16: Borrowing Costs
AS 17: Segment Reporting
AS 18: Related Party Disclosures
AS 19: Leases
AS 20: Earnings Per Share
AS 21: Consolidated Financial Statements
AS 22: Accounting for Taxes on Income
AS 23: Accounting for Investment in Associates in Consolidated Financial Statements
AS 24: Discontinuing Operations
AS 25: Interim Financial Reporting
AS 26: Intangible Assets
AS 27: Financial Reporting of Interests in Joint Ventures
AS 28: Impairment of Assets
AS 29: Provisions, Contingent Liabilities and Contingent Assets
Amendments made by MCA on 30.3.2016 in the Companies (Accounting Standards) Rules, 2006 and Companies (Indian Accounting Standards) Rules, 2015 are applicable for May, 2017 examination.
Following are the list of 14 Guidance Notes which are fully applicable for CA Final May, 2017 examinations:
1. Guidance Note on Accrual Basis of Accounting.
2. Guidance Note on Accounting Treatment for Excise Duty.
3. Guidance Note on Terms Used in Financial Statements.
4. Guidance Note on Accounting Treatment for MODVAT/CENVAT.
5. Guidance Note on Accounting for Corporate Dividend Tax.
6. Guidance Note on Accounting for Employee Share-based Payments.
7. Guidance Note on Accounting for Credit Available in respect of Minimum Alternate Tax under the Income Tax Act, 1961.
8. Guidance Note on Measurement of Income Tax for Interim Financial Reporting in the context of AS 25.
9. Guidance Note on Applicability of AS 25 to Interim Financial Results.
10. Guidance Note on Turnover in case of Contractors.
11. Guidance Note on the Schedule III to the Companies Act, 2013.
12. Guidance Note on Accounting for Expenditure on Corporate Social Responsibility Activities.
13. Guidance Note on Accounting for Derivative Contracts.
14. Guidance Note on Accounting for Depreciation in Companies in the context of Schedule II to
the Companies Act, 2013
The Guidance Note on Treatment of Reserves created on Revaluation of Fixed Assets and the Guidance Note on Accounting for Depreciation in Companies shall not be applicable in May, 2016 CA Final exams.
The Companies Act, 2013:
Accounting related sections of the Companies Act, 2013, notified up to 31/10/2016 along with the clarifications issued by the Ministry of Corporate Affairs are applicable for May, 2017 Examination.
The cut-off date for any other legislative amendments including relevant Notifications, Circulars, Rules and Guidelines issued by Regulating Authority will be six months i.e. up to 31st October, 2016.
Paper 2: Strategic Financial Management
Generally, CA Institute not made amendment in Paper 3 (SFM) of CA Final Course and therefore, you may refer your old study materials.
However, ICAI may intruduce new topics in this subject as per Syllabus 2016 for May 2017 examinations.
Paper 3: Advanced Auditing and Professional Ethics
- The statement on reporting under Section 143 of the Companies Act, 2013 (Section 227(1A) of the Companies Act, 1956) shall be applicable for May, 2017 Examination. Companies (Auditor’s Report) Order, 2016 [CARO] issued by Ministry of Corporate Affairs on 29th March, 2016 is applicable for CA Final May 2017 Exams.
- All auditing related sections of the Companies Act, 2013 up to 31-10-2016 shall be applicable for CA Final May, 2017 Exams. All other legislative amendments including relevant Notifications / Circulars / Rules / Guidelines issued by Regulating Authority up to 31st October, 2016 is applicable for May 2017 Examination.
- SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Companies (Auditor’s Report) Order, 2016 are applicable for May, 2017 Examination.
Engagements and Quality Control Standards on Auditing:
Following are the lists of all 44 Engagements and Quality Control Standards on Auditing which are applicable in CA May, 2017 exams.
SQC 1: Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information, and Other Assurance and Related Services Engagements
SA 200: Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Standards on Auditing
SA 210: Agreeing the Terms of Audit Engagements
SA 220: Quality Control for Audit of Financial Statements
SA 230: Audit Documentation
SA 240: The Auditor’s responsibilities relating to Fraud in an Audit of Financial Statements
SA 250: Consideration of Laws and Regulations in An Audit of Financial Statements
SA 260: Communication with Those Charged with Governance
SA 265: Communicating Deficiencies in Internal Control to Those Charged with Governance and Management
SA 299: Responsibility of Joint Auditors
SA 300: Planning an Audit of Financial Statements
SA 315: Identifying and Assessing the Risks of Material Misstatement through Understanding the Entity and its Environment
SA 320: Materiality in Planning and Performing an Audit
SA 330: The Auditor’s Responses to Assessed Risks
SA 402: Audit Considerations Relating to an Entity Using a Service Organization
SA 450: Evaluation of Misstatements Identified during the Audits
SA 500: Audit Evidence
SA 501: Audit Evidence – Specific Considerations for Selected Items
SA 505: External Confirmations
SA 510: Initial Audit Engagements-Opening Balances
SA 520: Analytical Procedures
SA 530: Audit Sampling
SA 540: Auditing Accounting Estimates, Including Fair Value Accounting Estimates, and Related Disclosures
SA 550: Related Parties
SA 560: Subsequent Events
SA 570: Going Concern
SA 580: Written Representations
SA 600: Using the Work of Another Auditor
SA 610 (Revised): Using the Work of Internal Auditors
SA 620: Using the Work of an Auditor’s Expert
SA 700: Forming an Opinion and Reporting on Financial Statements
SA 705: Modifications to the Opinion in the Independent Auditor’s Report
SA 706: Emphasis of Matter Paragraphs and Other Matter Paragraphs in the Independent Auditor’s Report
SA 710: Comparative Information – Corresponding Figures and Comparative Financial Statements
SA 720: The Auditor’s Responsibility in Relation to Other Information in Documents Containing Audited Financial Statements
SA 800: Special Considerations-Audits of Financial Statements Prepared in Accordance with Special Purpose Framework
SA 805: Special Considerations-Audits of Single Purpose Financial Statements and Specific Elements, Accounts or Items of a Financial Statement
SA 810: Engagements to Report on Summary Financial Statements
SRE 2400 (Revised): Engagements to Review Financial Statements
SRE 2410: Review of Interim Financial Information Performed by the Independent Auditor of the Entity
SAE 3400: The Examination of Prospective Financial Information
SAE 3402: Assurance Reports on Controls At a Service Organisation
SAE 3420 (New): Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus
SRS 4400: Engagements to Perform Agreed Upon Procedures Regarding Financial Information
SRS 4410 (Revised): Engagements to Compile Financial Information
Guidance Notes and other publications:
Following are the list of 14 Guidance Notes and other publications which are fully applicable for CA Final May, 2016 exams:
1. Code of Ethics
2. Guidance Note on Independence of Auditors
3. Guidance Note on Audit under Section 44AB of the Income-tax Act (Revised in view of Latest Form 3CA, 3CB and 3CD notified on 25th July).
4. Guidance Note on Audit of Inventories
5. Guidance Note on Audit of Debtors, Loans and Advances
6. Guidance Note on Audit of Investments
7. Guidance Note on Audit of Cash and Bank Balances
8. Guidance Note on Audit of Liabilities
9. Guidance Note on Audit of Revenue
10. Guidance Note on Audit of Expenses
11. Guidance Note on Computer Assisted Audit Techniques (CAATs).
12. Guidance Note on Audit of Payment of Dividend.
13. Guidance Note on Audit of Capital and Reserves.
14. Guidance Note on Audit of Banks.
15. Guidance Note on Audit of Internal Financial Controls over Financial Reporting.
16. Guidance Note on Reporting under section 143 (3) (f) and (h) of the Companies Act, 2013.
17. Guidance Note on Reporting on Fraud under section 143(12) of the Companies Act, 2013.
18. Guidance Note on the Companies (Auditor’s Report) Order, 2016.
Paper 4: Corporate and Allied Laws
1. The Companies Act, 2013:
The relevant notified Sections of the Companies Act, 2013 and other legislative amendments including relevant Notifications / Circulars / Rules / Guidelines issued by Regulating Authority up to 31st October, 2016 will be applicable for May, 2017 Examination.
2. The Companies (Amendment) Act, 2016:
This amendment Act was enacted by Parliament in the Sixty-seventh Year of the Republic of India. The Companies (Amendment) Act, 2016 is applicable for May 2017 examination.
3. Relevant Study Material for May 2017 Examination:
January, 2016 edition of Study Material shall be relevant for May, 2017 examination. Chapter 9 of the study material (January 2016 edition) covering provisions relating to Revival and Rehabilitation of Sick-Industrial Companies shall not applicable for CA Final May 2017 examination.
Additionally, the RTP of May, 2017 examination shall be referred side by side so as to know what is applicable/not applicable for May, 2017 examination.
4. SEBI (Issue of Capital and Disclosure Requirement) Regulations, 2009:
Vide Notification No. SEBI/LAD-NRO/GN/2016-17/003 dated 25th May, 2016, SEBI hereby further amend the
Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 through
the enforcement of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)
(Third Amendment) Regulations,2016 from the date of their publication in the Official Gazette.
Amendments have been made in relevant Regulations 2, 4, 73 & 84 of the Securities and Exchange Board of India
(Issue of Capital and Disclosure Requirements) Regulations, 2009 and these shall be applicable to issuers filing offer
documents with the Registrar of companies on or after the date of commencement of these regulations.
5. The Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Act, 2016:
Ministry of Law and Justice on 16th August, 2016 has published for general information, the Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Act, 2016.
It is an Act further to amend four laws: (i) Securitisation and Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002 (SARFAESI), (ii) Recovery of Debts due to Banks and Financial Institutions Act, 1993 (RDDBFI), (iii) Indian Stamp Act, 1899 and (iv) Depositories Act, 1996, and for matters connected therewith or incidental thereto.
Chapter II, of this amendment Act deals with the amendments to the Securitisation and Reconstruction of Financial
Assets and Enforcement of Security Interest Act, 2002, whereby, it is an act to regulate securitisation and reconstruction of financial assets and enforcement of security interest and to provide for a central database of security interests created on property rights, and for matters connected therewith or incidental thereto.
Paper 5 : Advanced Management Accounting
You may refer January 2015 Edition (Reprint Edition 2016) of CA Final Course Paper 5 (Advanced Management Accounting) Study Material, Practice Manual, PowerPoint Presentations, Podcasts.
Paper 6: Information Systems Control and Audit
Till the new edition released by ICAI, January 2016 Edition of Study Material, Practice Manual, PowerPoint Presentations, Podcasts of CA Final Course shall be applicable for May 2017. You may download the soft copy of these materials from official website of ICAI under . Note that CA Institute has not yet announced the applicability of new syllabus 2016.
Paper 7: Direct Tax Laws
Part-I of Paper-7 contain topics related to Direct Taxation. Accordingly, all amendments made in the provisions of Direct Tax by the Finance Act, 2016 including various circulars and notifications issued up to 31st October, 2016 will be applicable for CA Final May, 2017 examinations.
Accordingly, the applicable assessment year shall be A.Y. 2017-18 for Direct Tax Laws for CA Final May, 2017 Examination. Part-II of Paper-7 of CA Final New syllabus covers topics related to International Taxation.
You should note that CA Institute has already excluded the Wealth-tax Act, 1957 and Rules thereunder from the syllabus of CA Final Course and therefore not applicable for May 2017 examination.
Paper 8: Indirect Tax Laws (IDTL)
Amendments made in the provisions of Indirect Tax Laws by the Finance Act, 2016 including various circulars and notifications issued up to 31st October, 2016 will be applicable for CA Final May, 2017 examinations.
Paper 7 and 8 (DTL and IDTL)
CA Final students should read the latest study material (Reprint Edition November 2016) for preparation of May 2017 examination.
Supplementary Study Paper:
CA Final students appearing in May 2017 examination should read Supplementary Study Paper-2016 explaining the amendments made by the Finance Act, 2016 and significant notifications and circulars issued upto 30.4.2016. The amendments in the Supplementary Study Paper 2016 have been grouped chapter-wise in line with the Study Material to facilitate combined reading therewith.
You have to read the Practice Manual (December 2016 Edition) wherein the questions have been modified/adapted and answered on the basis of the provisions of tax laws as amended by the Finance Act, 2016.
Select Cases in DTL & IDTL – September 2016 Edition, wherein select significant Supreme Court and High Court decisions in direct and indirect tax laws, which are relevant in the context of tax laws as amended by the Finance Act, 2016, have been reported. This publication has also been divided chapter-wise in line with the Study Material, to facilitate combined reading therewith.