GUIDE TO ICAS SYLLABUS 2011/12

Contents
Welcome................................................................................. 3 ICAS Overarching learning outcome ................................ 4 The ICAS syllabus 2011/12 ................................................ 4 Syllabus and Learning Outcomes ..................................... 5 Test of Competence............................................................. 6
Business Law ............................................................................ 6 Business Management ............................................................. 7

Finance ...................................................................................... 8 Financial Accounting ............................................................... 8 Principles of Auditing & Reporting ........................................ 9

Test of Professional Skills................................................ 10

Advanced Finance ................................................................. 10 Assurance & Business Systems ............................................11 Financial Reporting ............................................................... 12

Tax .......................................................................................... 13

Test of Professional Expertise......................................... 14 Business Ethics ................................................................. 15

Welcome to the ICAS syllabus for 2011/12

The CA qualification is comprised of ten technical subjects and examinations along with business ethics, training contract and work experience requirements. The objective of Test of Competence (TC) is to provide CA Students with basic concepts and knowledge in core areas of accountancy, finance, law and auditing to enable CA students to progress on to later levels. The objective of Test of Professional Skills (TPS) is to equip CA Students with the practical skills in core areas necessary for an entry level professional accountant. This requires the development of an understanding of relevant concepts, principles and techniques, the ability to apply these in realistic settings and the exercise of judgement in selecting and advising on the most appropriate treatment. The TPS examinations test both the understanding and the application of these skills and techniques. Test of Professional Expertise (TPE) brings together the knowledge, skills and techniques acquired at TC and TPS along with new topics introduced at TPE in order to provide professional advice to business people in real life situations. The CA Student needs to be able to use their knowledge to analyse a given problem, and, from that analysis, form an acceptable professional judgement in a given situation. The CA Student also needs to be able to present the information in a clear and logical format and to prioritise the communication such that it addresses the major issues from both an objective professional viewpoint and the specific viewpoint and background of the reader. The TPE casestudy tests both the understanding and the application of these skills and techniques.

The ICAS syllabus 2011/12

YeaR 1 The Test of Competence (TC): Acquisition of knowledge base

YeaR 2 The Test of Professional Skills (TPS): Development of practical skills

YeaR 3 The Test of Professional Expertise (TPE): Judgement and application of expertise

Test of Competence (TC)

Business Law

Business Management

Finance Financial Accounting

Principles of Auditing and Reporting

1 23
Advanced Finance Multi-discipline case study Assurance and Business Systems Financial Reporting Taxation

Test of Professional Skills (TPS)

Test of Professional Expertise (TPE)

Business Ethics
In addition to including ethics within the appropriate subject areas at Test of Competence, Test of Professional Skills and Test of Professional Expertise, Business Ethics forms a stand alone subject and assessment.

Syllabus and Learning Outcomes

The syllabus for the CA qualification is designed in such a way to ensure that on completion of the CA qualification, the newly qualified CA will have developed the necessary technical knowledge and skills combined with professional skills in judgement, analysis, communication and presentation to deal with a wide variety of complex and often unpredictable issues and situations. The development of these technical and professional skills will also enable the newly qualified CA to formulate and communicate professional solutions which are appropriate to the circumstances. In addition, the newly qualified CA will have developed the necessary professional and ethical values to deal with and make informed judgements on complex, ethical and professional issues. The requirements for the CA qualification are set out in the CA syllabus in the form of learning outcomes. Learning outcomes are statements that identify what an individual will know or be able to do as a result of a learning activity within a subject and are usually expressed in terms of knowledge, skills or attitudes. The learning outcomes establish the breadth and depth of knowledge required for each of the subjects and are set in such a way as to ensure as a CA student progresses through the qualification they develop the depth and breadth of the required knowledge and skills. The learning outcomes for the CA qualification are organised into 6 hierarchical levels and move from the lowest level (knowledge) through to the highest level (evaluation). The levels are identified within the syllabus for each learning outcome within a subject and the meaning of each level is described below:

Level & Meaning

Knowledge (K): Remembering of previously learned material (recall of facts). Comprehension (C): Demonstrate understanding of facts and ideas by organising, comparing, translating, interpreting, giving descriptions and stating main ideas. Application (A): Use new knowledge. Solve problems to new situations by applying acquired knowledge, facts, techniques and rules in a different way. Analysis (An): Examine and break information into parts by identifying motives or causes. Make inferences and find evidence to support generalisation. Synthesis (S): Compile information together in a different way by combining elements in a new pattern or proposing alternative solutions. Evaluation (E): Ability to judge the value of material for a given purpose.

Test of Competence
The syllabus applies to examinations scheduled for the period September 2011 to August 2012

Business Law
On completion of this course students will be able to:
K 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Identify the sources of law Explain the legal status of various types of company and how to form a company Explain the nature of a companys constitution and the administration rules which apply to a company Explain the legal implications of issuing share and loan capital Explain the roles and responsibilities of the officers of a company Explain the elements of a legally binding contract and factors affecting the validity of a contract Explain how a contract may be discharged and the remedies for breach Explain the legal issues relating to agency, partnership and employment contracts Explain the legal issues surrounding the concept of negligence Identify the various forms and uses of trusts, the key types of intellectual property and the implications of data protection and environmental legislation X X X X X X X X X X C A An S E

Syllabus coverage
INTRODUCTION TO LAW Role and nature of law Sources of law Human Rights Act The UK courts FORMATION OF COMPANIES AND RECORDS Nature, function and classification of companies Corporate personality Formation procedure Companys constitution and its effect Minority protection ADMINISTRATION OF THE COMPANY Role and responsibilities of company officers Meetings, resolutions and records SHARE AND LOAN CAPITAL Types, features and classes of share capital Allotment, payment and transfer of shares London Stock Exchange and issue of securities to the public Securities and charges Capital maintenance CONTRACT LAW Types, terms and constructions of contracts Essential elements of a valid contract Misrepresentation/factors affecting contract validity Exclusion clauses: common law and statutory rules Breach of contract and remedies Partnership Agency Electronic contracts Employment law NEGLIGENCE The meaning of negligence Duty of care and breach of duty of care Causation and remoteness of damage Defences Vicarious liability TRUSTS Types, terms and construction of trusts INTELLECTUAL PROPERTY Copyright Patents Trademarks Design rights REGULATION Data Protection Act 1998 Environmental legislation

Business Management
On completion of this course students will be able to:
K 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Describe organisational structures Describe marketing and associated business processes Describe the features and uses of business information Calculate cost information for business planning and control Explain pricing strategies and calculate unit prices Explain the processes associated with the development and implementation of business strategies Apply the principles and procedures involved in managing working capital Explain the principles of budgeting and prepare budgets and forecasts Calculate probabilities using statistical techniques Calculate contribution to aid decision making Calculate performance of products and business segments X X X X X X X X X X X C A An S E

Syllabus coverage
ORGANISATIONAL STRUCTURES Types of organisational structures Goals and objectives MARKETING Marketing mix Market analysis Market access and distribution Product life cycle BUSINESS INFORMATION Internal information systems Third party information sources COST ACCOUNTING Cost and management accounting systems Classification of costs Accounting for direct costs and overheads Cost allocation and apportionment Costing techniques Variance analysis PRICING STRATEGIES Influences on pricing and pricing decisions BUSINESS STRATEGY Strategy formulation Trading and operational strategies Business improvements BUDGETARY PLANNING & CONTROL Budgeting technique theory Behavioural aspects of budgeting Preparation of budgets Forecasting WORKING CAPITAL MANAGEMENT Stock Debtors Creditors QUANTITATIVE TECHNIQUES Planning and control Regression analysis Statistical techniques CONTRIBUTION ANALYSIS Cost volume profit Contribution and breakeven Limiting factors PERFORMANCE MEASUREMENTS Business unit performance assessment Non-financial indicators

Finance
On completion of this course students will be able to:
K 1. 2. 3. 4. 5. 6. 7. Explain the financial environment within which an organisation functions Apply an understanding of the structure of the UK equity and debt markets and its financial system to practical situations Apply the major capital market models to practical situations Prepare data used in financial analysis Prepare plans and forecasts for an organisation Calculate investment returns from competing projects Explain the fundamentals of micro and macroeconomics X C X X X X X X A An S E

Syllabus coverage
FINANCIAL ENVIRONMENT
External financial environment Internal finance strategies

FINANCIAL ANALYSIS
Stock exchange indicators Ratio analysis Present value techniques

INVESTMENT RETURNS FROM COMPETING PROJECTS

Payback Accounting rate of return Net present value Internal rate of return Capital rationing Uncertainty, risk and probability

UK EQUITY & DEBT MARKETS AND FINANCIAL SYSTEM

Sources of finance Institutional investors Types of securities and valuation Markets for securities

PLANS AND FORECASTS FOR AN ORGANISATION

Cash flow projections Profit projections Reconciliation of cash flow and profit projections Components of business plans

CAPITAL MARKET MODELS

Efficient markets Capital asset pricing model Cost of capital calculation Traditional and Modigliani-Miller theories Portfolio theory

FUNDAMENTALS OF MICRO AND MACROECONOMICS

Microeconomic theory Macroeconomic theory

Financial Accounting
On completion of this course students will be able to:
K 1. 2. 3. 4. 5. Apply fundamental accounting concepts Prepare journal entries to record transactions in the books of prime entry using double entry book-keeping Apply control techniques used in financial accounting information Explain the structure and accounting requirements of sole traders, partnerships, limited companies and not-for-profit entities. Prepare financial statements for sole traders, partnerships and limited companies X X C A X X X An S E

Syllabus coverage
PREPARATION OF FINANCIAL STATEMENTS
Trial balance extraction Sole trader, partnerships and limited companies under international formats Cash flow statements

BUSINESS STRUCTURES AND ACCOUNTING REQUIREMENTS

Sole trader Partnership Private company Public company Not-for-profit organisations UK statutory format International accounts formats Form of the notes to the accounts Historical development of accounts Other primary statements

FUNDAMENTAL ACCOUNTING CONCEPTS

The reporting entity The profit and loss account and balance sheet Measurement and recognition Accrual concept Prudence principle

RECORDING TRANSACTIONS
The accounting equation and double entry Books of prime entry and the nominal ledger Recording transactions Correction of errors and incomplete records

CONTROL TECHINQUES
Computerised accounting packages Bank reconciliations Use of the trial balance

Principles of Auditing & Reporting

On completion of this course students will be able to:
K 1. 2. 3. 4. 5. 6. 7. 8. Explain the need for and nature of third party assurance Explain the audit process and be able to apply judgement to different stages in the process Explain the role and responsibilities of the external auditor Describe the regulatory framework of auditing in the UK Describe the role and impact of the UK and international financial reporting framework and regulation Summarise the APB's Ethical Standards and their coverage Identify situations that would be covered by the International Auditing Standards (ISA's) Explain audit assertions and the principles of collecting and assessing evidence X X X X X C X X X A An S E

Syllabus coverage
INTRODUCTION TO THE CORPORATE REPORTING FRAMEWORK
Framework for the preparation and presentation of financial statements Elements of financial statements, recognition and measurements The Companies Act reporting requirements The standard setting process and role of accounting standards, UK and International Stock market influences Corporate governance

ROLE AND RESPONSIBILITIES OF THE EXTERNAL AUDITOR

The role of the external auditor The Companies Act auditor rights and responsibilities The auditors duty of care Legal liability and professional negligence Responsibility for fraud Anti-money laundering The external auditors report Auditing Practices Board Audit of listed companies

AUDITING AND ETHICAL STANDARDS

International Standards on Auditing (UK & Ireland) Ethical Standards 1-5

APPROACH PROCESS
Overview of the audit process Audit methodology Analytical review Risk assessment/Materiality Systems and controls/control testing Substantive testing Quality control

PRINCIPLES OF THIRD PARTY ASSURANCE

The information gap and stewardship Fundamental concepts Judgement and materiality A true and fair view Third party assurance Independence ICAS Code of Ethics

REGULATORY FRAMEWORK OF AUDITING IN THE UK

Financial Reporting Council Auditing Practices Board International Auditing and Assurance Standards Board Professional conduct for members The Companies Act qualifying and supervisory bodies

AUDIT ASSERTIONS AND COLLECTING AND ASSESSING AUDIT EVIDENCE

Audit assertions Tests of control Gathering and evaluating sufficient appropriate evidence

Test of Professional Skills

This syllabus applies to examinations scheduled for calendar year 2012. It is the responsibility of candidates to ensure that their knowledge and skills are up to date. Test of Competence learning outcomes are assumed knowledge for Test of Professional skills.

Advanced Finance
On completion of this course students will be able to:
K 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Evaluate the plans, actions and financial positions of clients Advise clients on relevant sources of finance and funding methods Advise on investment products suitable for companies Advise on the corporate debt market and instruments and the principles of loan documentation Advise clients on corporate restructuring situations, company valuations, mergers and acquisitions Explain the forms of corporate insolvency Prepare a statement of affairs Analyse stock exchange requirements and the role of the accountant Analyse the use of derivatives in hedging risk Explain the impact of government policy and regulation on financial situations Integrate the Code of Ethics within the framework of Finance Analyse the Treasury Management function X X X X X X X C A An S E X X X X X

Syllabus coverage
ShoRt and medium teRm financial management
Cash flow forecasts and working capital management Money markets Trade and export finance

Insolvency
Forms of insolvency Preparation and use of the Statement of Affairs Directors duties

Advanced Capital Investment APPRAISAL

Investment appraisal Sensitivity analysis Risk in investment appraisal

Equity maRkets Long teRm financial policy

Capital structure Cost of capital Dividend decisions Raising finance Banks and bank credit Loan documentation Corporate debt securities Stock exchange regulation and reporting Issue of shares Role of the accountant and other intermediaries

pRofessional conduct
ICAS Code of Ethics Ethical considerations

Analysis of financial statements

Ratio analysis Financial distress

Impact of national economic policy AND REGULATORY ENVIRONMENT

Fiscal and monetary policy Financial impact Business impact Business and sustainability Regulation of the Financial Services Industry

Company RESTRUCTURING, valuations, meRgeRs and acquisitions

Restructuring Valuation of business interests Mechanics of mergers and acquisitions  Benefits to shareholders

DeRivatives swaps, foRwaRds, futuRes and options

Market Definitions and terminology Hedging interest rate and currency risk Risks associated with derivatives Financial implications of a derivative position

TREASURY MANAGEMENT
The Treasury function

10

Assurance & Business System

On completion of this course students will be able to:
K 1. 2. 3. 4. 5. 6. 7. Plan a statutory financial statement audit in compliance with auditing standards Evaluate findings obtained during a statutory financial statement audit Apply the relevant provisions of ethical standards, legislations and professional guidance Plan assurance engagements and related services in compliance with relevant standards Evaluate findings for other assurance engagements in accordance with relevant standards Advise on business risk and related governance and risk control frameworks Advise on manual and computerised business systems and controls X X X X X C A An S X X E

Syllabus coverage
THE ASSURANCE PROCESS
Non statutory assurance and related engagements The statutory audit requirement Acceptance and continuance procedures including ethical issues Documentation and quality control Planning and understanding the entity Materiality Assessing the risk of material misstatement Selection of items for testing Control risk assessment Substantive testing Physical and electronic evidence Completion and review Reporting Group engagements

BUSINESS RISK
Strategic risk Financial risk Operational, compliance and environmental risk

REGULATION
Professional standards and guidance, UK and International Ethical standards Statutory requirements and regulatory framework Fraud, theft and Proceeds of Crime Act including money laundering Case law Impact of Sarbanes-Oxley Act on auditors in UK and EU Companies Act 2006

CONTROL ENVIRONMENT AND BUSINESS SYSTEMS

Corporate Governance Corporate social responsibility Risk and control frameworks Internal Audit Systems design and evaluation

COMPUTERISED SYSTEMS
Ecommerce risks and controls IT strategy and management IT access controls System acquisition and development IT operations IT disaster recovery planning Application controls

11

Financial Reporting
On completion of this course students will be able to:
K 1. 2. 3. Apply generally accepted accounting principles Recommend the appropriate accounting treatment under International Financial Reporting Standards to account for specific transactions Prepare journal entries, with supporting calculations, to record a range of transactions in accordance with any relevant guidance on accounting treatment Compare International Financial Reporting Standards and UK Standards in the context of convergence Advise on how certain issues may be dealt with under UK Accounting Standards Construct primary financial statements for an individual company Construct primary financial statements for a Group Construct appropriate disclosures for inclusion within the annual report and accounts Explain the accounting requirements relating to small and medium-sized entities X X X X X C A X X An S E

4. 5. 6. 7. 8. 9.

X X

Syllabus coverage
ACCOUNTING FOR BUSINESS TRANSACTIONS
Revenue recognition Tangible non-current assets Intangible non-current assets Investment properties Financial assets and liabilities Inventories and contracts Current taxation Deferred taxation Provisions, contingent liabilities and contingent assets Employee benefits Leases Share capital Impairment reviews Government grants Foreign currencies Post balance sheet events Share-based payments Borrowing costs Specialised transactions

INDIVIDUAL COMPANY FINANCIAL STATEMENTS

Double entry bookkeeping and trial balance extraction Primary financial statement preparation Accounting standards Information contained within disclosure notes

GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

Accounting principles and IASB framework Impact on accounting for business transactions and preparation of accounts Accounting policies and changes First time adoption of international standards Current developments Interpretations

GROUP FINANCIAL STATEMENTS

Principles of consolidation Acquisition of subsidiaries and sub-subsidiaries Disposal of subsidiaries Adjustments for internal balances and transactions Foreign subsidiaries Accounting for associates and joint ventures Special purpose entities Group financial statement preparation Accounting standards Information contained within disclosure notes

FINANCIAL COMMUNICATION
Statutory requirements Business review Corporate, social and sustainability reporting

ACCOUNTING BY SMALL AND MEDIUM SIZED ENTITIES

FRSME FRSSE Companies Act requirements

12

Tax
On completion of this course students will be able to:
K 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Explain the key aspects of the administration of the tax system Prepare a tax adjusted trading profit (or loss) computation Construct an individuals tax liability Advise on an individuals income tax liability Advise on chargeable gains for individuals and companies Advise on a companys tax liability including tax planning Prepare VAT calculations for common business transactions Prepare stamp tax liabilities Prepare inheritance tax computations Apply best practice and act ethically when dealing with clients and HMRC Explain the main aspects of environmental taxes X X X X X C X X X X X X A An S E

Syllabus coverage
INTRODUCTION TO TAX
Administration of tax Self assessment Statute and other sources Penalties for non-compliance Collection of taxes

CORPORATION TAX
Taxable profits and rates Income tax on receipts and payments Losses Groups Basic tax planning Ecommerce International issues Transfer pricing

INHERITANCE TAX
Computational principles Reliefs and exemptions Basic planning advice

CHARGEABLE GAINS
Computational principles Reliefs and exemptions Losses Planning advice

PRINCIPLES OF COMPUTING TRADING INCOME

Principles of trading Allowable deductions Current year basis of assessment Capital allowances Trading profit/loss calculation

VAT
Taxable persons and registration Accounting and collection process Accountability and enforcement Tax rates Groups Transfer of a going concern Partial exemption and the capital goods scheme Land and buildings International aspects

STAMP TAXES
Stamp Duty Stamp Duty Reserve Tax Stamp Duty Land Tax

INCOME TAX
Employment income and benefits Losses Partnerships Investments Other income Basic personal tax planning Personal allowances Residence, ordinary residence and domicile Charges and charitable giving

PROFESSIONAL CONDUCT
Principles of best practice Meeting legal requirements Ethics

NATIONAL INSURANCE
Classes and collection

ENVIRONMENTAL TAXES
Aggregates levy Landfill taxes Land remediation levy Climate change levy

13

Test of Professional Expertise

This syllabus applies to examinations scheduled for November 2013 and May 2014. Test of Competence and Test of Professional Skills learning outcomes are assumed knowledge for Test of Professional Expertise. It is the responsibility of candidates to ensure that their knowledge and skills are up to date.

Test of Professional Expertise

On completion of this course students will be able to:
K 1. Critically appraise complex business performance data using appropriate technical skills and knowledge, including the use of theoretical models, covering the main areas of accountancy. Recommend integrated solutions to complex business problems drawing on wide-ranging information in an unpredictable variety of professional contexts. Recommend alternative strategies for future actions to clients in particular circumstances, based on updated technical knowledge. Evaluate contradictory information and make informed and balanced judgments in the absence of consistent data. Construct a wide range of accounting and finance computations covering the main areas of accountancy to provide information for the evaluation of business organisations and their situations. Advise on the development of improved business structures appropriate to the businesss scale and sector. Consider situations involving ethical and professional issues and make appropriate judgments on these. Prioritise the presentation of a variety of alternative solutions to business problems. Construct a report or equivalent, using style, content and language appropriate to a wide range of users, to communicate complex financial information. x x C A An S E x

2. 3. 4. 5.

x x x X

6. 7. 8. 9.

X x

Syllabus coverage
Business Plans
Objectives and goals Content of business plans Presentation of business plans

Business Management
Intellectual capital evaluation and management Organisational culture and management styles Internal control systems Managing acquisitions and disposals Remuneration packages Corporate governance Business ethics Personnel management and the law Fraud and control IT Developments

Business Performance Evaluation

Strategic information management Performance evaluation Activity-based costing, budgeting and management Change management Business valuation

Business Strategies
Corporate strategy Stakeholder objectives Choices of business structures Economic and market structures Strategic marketing McCarthys Marketing Mix Current position analysis Communication of strategy Funding strategies Corporate tax planning Expansion strategies Exit strategies

Auditing
Audit issues and risks Management letters Internal auditing

Treasury Risk Management

Treasury management Financial, interest and currency risk management

Professional ethics
The fundamental principles in ICAS Code of Ethics Objectivity and independence Confidentiality and conflicts of interest Bribery, fraud and insider dealing Money laundering Managing professional appointments

Personal Finance
Financial products and tax implications Personal tax planning

14

Business Ethics
On completion of this course students will be able to:
K 1. 2. 3. 4. 5. 6. 7. Explain the nature of ethics and its significance in the business environment Consider the consequences of unethical behaviour to the individual, the profession and society Consider the perspective of others when reviewing ethical issues Consider the long term consequences of unethical decisions Evaluate decisions in business using an ethical framework and relevant legislation Recommend ethical courses of action Apply professional ethics codes to business situations x C x x x x X X A An S E

Syllabus coverage
The natuRe of ethics
Ethics and values Ethics and the law Rules-based and framework approaches Individual values, attitudes and beliefs (heuristics) Ethical evaluation framework Use of theoretical models in ethical decision making

Ethical dilemmas in business

Exploration of ethical issues arising in the context of doing business Organisational cultures and ethical leadership Confidentiality and Whistleblowing Public Interest Disclosure Act Corporate Citizenship (social, environmental, employee) Effect of globalisation on ethical decision making Social Accountability International

ICAS Code of Ethics

Fundamental Principles and Statements

15

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