Ica Gh Syslabus

Objectives and Expected Performance Outcome of each part THE INSTITUTE OF CHARTERED ACCOUNTANTS (GHANA) Syllabus for ICAG Qualifying Examinations ACCRA 2009 Institute of Chartered Accountants, Ghana 1 Proposed Sylabus for ICAG Qualifying Examinations Contents Introduction Features and Inovations of the New Scheme Objectives and Expected Performance Outcomes of Each Part PART 1 1. 1 1. 2 1. 3 1. 4 Financial Accounting Fundermentals Business Management Economics Management Information Systems PART 2 2. 1 2. 2 2. 3 2. Quantitative Tools in Business Audit and Internal Review Business and Corporate Law Principles and Practice of Taxation PART 3 3. 1 3. 2 3. 3 3. 4 Financial Reporting Public Sector Accounting Cost and Management Accounting Financial Management PART 4 4. 1 4. 2 4. 3 4. 4 Advanced Financial Reporting Advanced Audit and Professional Ethics Corporate Strategy and Governance Advanced Tax Planning and Fiscal Policy Review of Qualifying Examinations Syllabus May 2010 Proposed Tra nsitional Arrangements 1 2 3 4 11 17 25 32 37 42 50 55 61 68 73 80 86 98 108 115 116 2 Institute of Chartered Accountants, Ghana Financial Accounting FundamentalsINTRODUCTION After nearly four years of organizing examinations on the current syllabus of the Institute of Chartered Accountants (Ghana), professional programme, the first of which was held in May 2005, it is now considered appropriate and timely to revise and update it in order to bring it in line with current state of knowledge and to make it more relevant to the current demands of employers and clients. The job of the Chartered Accountant has become more sophisticated because of the effects of globalisation, developments in information technology and the complexity of the modern business organisation.The modern day chartered accountant, for instance, not only expresses an opinion on the accuracy and fairness of financial statements, but also advises management on the viability of investment projects, tax matters and ren ders specialised advisory services, etc. In many cases, he is called upon to serve the nation as a member of a special investigation panel. In order to perform these functions creditably, he needs to have acquired proficiency in accounting theory and practice. The new syllabus would be examined in May 2010. The new syllabus attempts to meet the dual goals of the scheme through the subject structure and coverage.The 16-subject, 4-level-structure examination combines subjects which address the practical skills requirements of the potential professional accountants with others which are mainly of the theoretical or conceptual nature and therefore serves as a good grounding for the Professional Accountant. SUMMARY OF NEW STRUCTURE Exhibit 1: Chart of New Examination Scheme 1. 1 1. 2 1. 3 1. 4 Financial Accounting Fundamentals Business Management Economics MIS & Business Systems 3. 1 3. 2 3. 3 3. 4 Financial Reporting Public Sector Accounting Cost and Management Accounting Financial Mana gement PART 1PART 3 PART 2 PART 4 2. 1 2. 2 2. 3 2. 4 Quantitative Tools in Business Audit and Internal Review Business and Corporate Law Principles and Practice of Taxation 4. 1 4. 2 4. 3 4. 4 Advanced Financial Reporting Advanced Auditing and Professional Ethics Corporate Strategy and Governance Advanced Taxation and Fiscal Policy Institute of Chartered Accountants, Ghana 1 Proposed Sylabus for ICAG Qualifying Examinations FEATURES AND INNOVATIONS OF THE NEW SCHEME This new scheme was developed on a well-established context for a review and change. The following new features and innovations stand out. A four-part structure of 16 papers in total. †¢ Fusion and integration of some courses. This is meant to encourage an integrative learning approach and to minimize the negative of the â€Å"tunnel vision† subject-by-subject training. The combination of related courses is therefore meant to derive more meaning and synergies. For example, it is not uncommon to find very sim ilar questions and requirements on â€Å"Budgeting and Variance Analysis† in both the old [i. e. Current] Management Accounting and Cost Accounting papers. †¢ Clearly defined and achievable learning outcomes from Part to Part.This should partly resolve the problems associated with the placement of partly qualified candidates in industry and on other programmes. †¢ A more rational, easy-to-fit and implement, graduate conversion and exemption scheme has been incorporated. It is hoped that this will motivate higher grade candidate entrants—degree and diploma holders —to acquire sufficient accountancy competence and speed up their eventual professional qualification. †¢ All students have ten (10) years from the date of registration within which to complete all the examinations of the Institute of Chartered Accountants (Ghana).After the ten (10) years period any student who has not completed the examinations of the Institute will not be eligible to tak e the examinations. †¢ Better focus on business [financial] strategy and reporting or communication skills, thereby enabling candidates to appreciate the overall realities of the business environment and to use advisory skills more effectively. †¢ Introduction of some more relevant programmes and appropriate titles — the New Business Strategy is more about management, making accountants strategic decisions makers. Increased emphasis on business advisory skills at the final Part 4. 2 Institute of Chartered Accountants, Ghana Financial Accounting Fundamentals OBJECTIVES AND EXPECTED PERFORMANCE OUTCOME OF EACH PART Each of the 4 Parts of this examination scheme has a broad objective and expected performance outcome as stated below. Additionally, within each subject at any Part, the syllabus coverage as well as the detailed but specific objectives and learning outcomes are stated. The broad objective and learning outcomes of the four (4) Parts are as follows: PART 1 â € ¢ 4 basic/foundation papers. Provision of basic principles and knowledge required to understand the Business Environment. PART 2 †¢ Four (4) traditional core papers. †¢ Test of technical expertise required of a modern accountant. †¢ Acquisition of background knowledge and skills necessary for effective performance at middle management level. PART 3 †¢ Four (4) core papers. †¢ Emphasis on business cases, strategy and advisory skills. PART 4 †¢ Four (4) core papers. †¢ Emphasis on business cases, strategy and advisory skills. Result and Interpretation The pass mark is 50%. The results will be published as â€Å"pass† or â€Å"fail.A candidate who fails has the option of rewriting this paper in subsequent examinations till his/her candidature expires. Institute of Chartered Accountants, Ghana 3 Proposed Sylabus for ICAG Qualifying Examinations PROFESSIONAL PART 1 PAPER 1. 1: Financial Accounting Fundamentals 1. OBJECTIVES AND LEARNING OUTC OMES This paper is designed to enable candidates acquire and appreciate fundamental accounting knowledge in organisations. At the end of the course, the candidate should be able to: Demonstrate sound knowledge and understanding of accounting principles, concepts and their application in the preparation of financial statements.To ensure that students have a sound understanding of the techniques of double entry accounting and can apply its principles in recording transactions, adjusting financial records and preparing non-complex financial statements. Able to identify and correct omissions and errors in accounting records and financial statements. Able to specify the components of financial statements and prepare and present non-complex accounts for sole traders, partnerships and limited companies. Specify why an entity maintains financial records and prepares financial statements.Identify the sources of information for the preparation of accounting records and financial statements. R ecord and account for transactions and events resulting in income, expenses, assets, liabilities and equity in accordance with the appropriate basis of accounting and the laws, regulations and accounting standards applicable to the financial statements. Prepare a trial balance from accounting records and identify the uses of the trial balance. Prepare accounts and financial statements from incomplete records. Understand the different bases of preparing financial statements. Apply some international financial reporting standards.Define the qualitative characteristics of financial information and the fundamental bases of accounting FORM OF EXAMINATION The examination will be a three-hour paper consisting of five compulsory questions. (All the five questions must be answered. ) 3. SYLLABUS WEIGHTING GRID This grid shows the relative weightings of topics within this subject and should guide the relative study time spent on each. The marks available in the assessment will equate to the w eightings below. 4 Institute of Chartered Accountants, Ghana †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ 2. Financial Accounting FundamentalsHowever, there might be slight variations in some instances as they serve as a guide only. SYLLABUS COVERAGE Conceptual Framework of Accounting, Maintaining Financial Records Principles of Double Entry & Books of Prime Entry Adjustments to Accounting Records and Financial Statements Accounting for non-current Assets (tangibles and intangibles) Preparation of Financial Statements including Cash Flow Preparation of Financial Statements for Non-profit Making Organisations, Preparation of Financial Statements from Incomplete Records Accounting for specialised transactions Introduction to financial statements analysis TOTAL WEIGHTING (%) 0 15 20 20 15 10 100 Institute of Chartered Accountants, Ghana 5 Proposed Sylabus for ICAG Qualifying Examinations PAPER 1. 1 Financial Accounting Fundamentals MAI N TOPIC SYLABUS CONTENT (Cont’d. ) 1. 1 Conceptual Framework of Accounting a. Define and explain the scope of accounting, financial accounting, book-keeping, cost and management accounting, and their similarities and differences. b. Explain the needs of external and internal users of accounting information. c. Describe forms of Business Entity: and explain the meaning of ‘entity. ’ d.Explain the categories of business organisations. (i) Sole Proprietorships: Their characteristics, benefits and limitations. (ii) Partnerships: Their characteristics, benefits and limitations. (iii) Limited Liability Companies: Their characteristics, benefits and limitations e. Explain the differences between Partnerships and limited liability companies. f. Explain the purpose of financial statements by 1AS 1. g. Explain the accounting assumptions and concepts. h. Outline the components of financial statements. i. Identify the main users of financial information and their information needs. . Identify and explain accounting concepts and conventions. k. Outline the qualitative characteristics of financial statements. l. Outline the elements of financial statements and the basis of their recognition and their measurements. m. Explain Accounting Standards: their purpose, standards setting process, IASB membership. a. Specify why an entity maintains financial records and prepares financial statements. b. Identify the sources of information for the preparation of accounting records and financial statements. c.Record and account for transactions and events resulting in income, expenses, assets, liabilities and equity in accordance with the appropriate basis of accounting and the laws, regulations and accounting standards applicable to the financial statements. d. Record and account for changes in the ownership structure and ownership interests in an entity. 1. 2 Maintaining Financial Records 6 Institute of Chartered Accountants, Ghana Financial Accounting Fundamental s PAPER 1. 1 Financial Accounting Fundamentals MAIN TOPIC SYLABUS CONTENT (Cont’d. ) 1. 3 Principles of Double Entry and Books of Prime Entry a.Understand and apply the accounting equation. b. Identify the elements of financial statements: †¢ Types, definitions, relationships and distinctions. †¢ The nature of transactions. c. Outline the contents and purpose of different types of business documentation, including: quotation, sales order, purchase order, goods received note, goods dispatched note, invoice, statement, credit note, debit note, remittance advice, receipt. d. Identify the main types of ledger accounts and books of prime entry (cash books, the sales day book and the sales ledger, the purchases day book and the purchases ledger) and understand their nature and function. . Understand and illustrate the uses of journals and the posting of journal entries into ledger accounts. f. Identify the main types of business transactions e. g. sales, purchases, paymen ts, receipts. g. Identify correct journals from given narrative. h. Illustrate how to balance and close a ledger account. 2. 1 Adjustments to accounting records and financial statements a. Identify and explain the types of errors that can affect trial balance and its effects on financial statements. (i) Explain how these can be corrected. (ii) Explain the purpose of suspense accounts. iii) Explain the uses of journals to correct errors in draft financial statements. b. Explain the accounting for the following in financial statements; (i) Stocks/inventories. (ii) Tangible non-current assets. (iii) Fixed Assets and Depreciation. (iv) Intangible non-current assets and amortisation. (v) Accruals and prepayments. (vi) Debtors/receivables and trade creditors/ payables. (vii) Provisions and contingencies. (viii) Returns inwards and outwards. (ix) Discount received and discount allowed. (x) Capital and revenue expenditures. Institute of Chartered Accountants, Ghana 7Proposed Sylabus for ICA G Qualifying Examinations PAPER 1. 1 Financial Accounting Fundamentals MAIN TOPIC SYLLABUS CONTENT (Cont’d. ) xii. Bad debts, provisions for doubtful debts, provisions for discounts on debtors. c. Prepare Bank Reconciliation Statement. 2. 2 Accountingfor Non-current Assets a. Describe the accounting treatment for property, plant and equipment in accordance with IAS 16. b. Explain the methods and policies of depreciation (limited to straight line, reducing balance and revaluation methods). c. Explain the reasons for depreciation and accounting for provision for depreciation. . Account for disposal of property, plant and equipment using ledger accounts. e. Account for recognition of Intangible assets in accordance with IAS 38. f. Explain the differences between depreciation and amortization. a. Prepare and present income statement and balance sheet of a sole trader: i Manufacturing Account ii Trading Account iii Profit and Loss Account iv Balance Sheet a. Describe the procedure for forming a partnership. b. Outline the provisions in the Incorporated Private partnership Act 1962 (Act 152) in relation to the preparation of partnership accounts. c.Prepare final accounts of partnership: †¢ Trading, profit and loss account †¢ Profit and loss appropriation account †¢ Partners’ capital and current accounts †¢ Balance sheet d. Explain the procedure for admission of a partner. e. Explain the methods of valuing goodwill. f. Explain revaluation in relation to an admission of a new partner, change in the profit sharing ratio, or a retirement/death. 3. 2. Preparation of Financial Statements of a Partnership Firm 3. 1 Preparation of Financial Statements of a Sole Trader 8 Institute of Chartered Accountants, Ghana Financial Accounting FundamentalsPAPER 1. 1 Financial Accounting Fundamentals MAIN TOPIC SYLLABUS CONTENT (Cont’d. ) g. Prepare partnership accounts for an admission, change in the profit sharing ratio, or a retirement. h. Pre pare accounts for simple dissolution (excluding piecemeal realisation). 3. 3 Preparation of Financial Statements of a company a. Distinguish between. – Ordinary Share and Preference Share. – Authorised Capital and Stated Capital. – Income Surplus and Capital Surplus. b. Describe the nature and types of debentures. c. Explain the nature and purpose of final accounts of a limited liability company. . Draft company final accounts for internal use. e. Define cash flow and explain cash flow statement. f. Describe the usefulness of cash flow statement. g. Prepare a simple cash flow statement in accordance with IAS 7. a. Identify the type of entity that is a non-profit making organisation. b. Identify the purpose of such organisations. c. Outline the differences between income statement for non-profit making organisation and income statement for a profit making business. d. Prepare receipts and payments account, income statement and a balance sheet for a non-profit mak ing organisation.Prepare Income statement and balance sheet of an entity from incomplete records. 4. 1 Preparation of Financial Statements for Not-for-Profit Organisations 4. 2 Preparation of Financial Statements fromIncomplete Records 5. Accounting for a. Explain joint venture. Specialised b. Distinguish between joint venture and partnership. Transactions Joint Venture; c. Explain how to make entries in the accounts of a joint venture. Investments; d. Explain investments accounts, and how they are Royalties; used. Branch Institute of Chartered Accountants, Ghana 9 Proposed Sylabus for ICAG Qualifying Examinations PAPER 1. Financal Accounting Fundamentals MAIN TOPIC SYLLABUS CONTENT (Cont’d. ) e. Record transactions in investment accounts. f. Explain royalties, minimum rent and short workings. g. Record royalties in the books of the lessee and lessor (including sub-royalties or leases). h. Prepare departmental and branch accounts (excluding foreign branches). 6. Introduction to Financial Statement Analysis a. Calculate basic financial ratios from given income statement and/or balance sheet: – Profitability Ratios – Liquidity (Short term solvency) Ratios – Gearing/Leverage Ratios – Activity/Efficiency Ratios – Investment Ratios b.Explain the meaning and uses of the above ratios. c. Outline the limitations of financial ratios as tool for performance measurement. LIST OF RECOMMENDED TEXT 1. 2. 3. ICAG Study Text. Wood F. Business Accounting 1: Financial Times. Millichamp, R. A. (1992) Foundation Accounting; DPP. RELEVANT LEGISLATIONS 1. 2. Companies Code, 1963, Act 179. Incorporated Private Partnership Act 1962, Act 152. 10 Institute of Chartered Accountants, Ghana Business Management PAPER 1. 2 Business Management 1.OBJECTVES AND LEARNING OUTCOMES At the end of the course, candidates should be able to: †¢ †¢ †¢ †¢ †¢ †¢ explain the objectives of business and the functions of management; expl ain the major concepts, theories and techniques in the field of general management; apply the concepts, theories and techniques in analysing and providing solutions to business problems; describe the various functional areas of an organisation and how they relate to one another; describe the environment within which businesses operate; appraise the impact of economic, social, political, legal, technological and global changes in the environment on management decisions. . FORM OF EXAMINATION The examination will be a three-hour paper of seven (7) questions. Candidates will be required to answer any five (5) questions. 3. SYLLABUS WEIGHTING GRID This grid shows the relative weightings of topics within this subject and should guide the relative study time spent on each. The marks available in the assessment will equate to the weightings below. However, there might be slight variations in some instances as they serve as a guide only.Syllabus Coverage Introduction to Management Planning and Decision Making Organizing, Motivation, Leadership, Controlling Communication Groups and Team Work Human Resource Management Marketing Management Operations Management TOTAL Weighting (%) 10 15 30 15 10 10 10 100 11 Institute of Chartered Accountants, Ghana Proposed Sylabus for ICAG Qualifying Examinations PAPER 1. 2 Bussiness Management MAIN TOPIC (Cont’d. ) SYLLABUS CONTENT Introduction to Management a. Explain the objectives of business organisations. b.Explain the four (4) functions of management and state the other major elements in the management process. c. Explain the roles of management. d. Explain the types of skills needed by managers. e. Describe how managerial jobs differ according to the levels and areas of responsibility. f. Explain the evolution of management theories. g. Explain how socio-cultural, legal, economic, political and technological and global changes influence businesses. h. Explain the concept of stakeholders and distinguish between primary an d secondary stakeholders. i. Explain the nature of the power and interests of takeholders. j. Explain the social responsibility of businesses. Planning and Decision Making a. Define and differentiate between the following key terminologies: Planning †¢ Forecasting †¢ Objective setting †¢ Policies †¢ Programmes †¢ Schedules †¢ Procedures †¢ Budgeting b. State and describe types of plans. c. Categorise the types of planning at the different levels of management. d. Explain the planning process. e. Explain the steps in the decision making process. f. Appraise alternative solutions and select appropriate solution(s) to organisational problems. g.Evaluate and apply skills necessary for effective decision making as regards the entire spectrum of management and organisation. 12 Institute of Chartered Accountants, Ghana Business Management PAPER 1. 2 Bussiness Management MAIN TOPIC (Cont’d. ) SYLLABUS CONTENT Organising a. Describe the elements that make up organisational structure and its related units. b. Develop organisational charts and explain their importance. c. Describe the main approaches to job design. d. Explain the major methods of vertical co-ordination, including formalisation, span of management, centralization vs. ecentralisation, delegation, line and staff positions. e. Analyse delegation, authority, responsibility and accountability and their impact on motivation and organisational culture. f. Explain, analyse and evaluate the concept of coordination as an integral part of management. g. Distinguish between types and conditions for business and organisational integration. h. Identify and state the characteristics and relationships associated with planning, organising, leading and controlling in organisations. i. Appraise the role and importance of co-ordination. a.Define leadership. b. Explain the major sources of a leader’s power. c. Explain the following leadership theories: †¢ Traits theory â⠂¬ ¢ Behavioural theory †¢ Contingency theory †¢ Managerial grid †¢ Tannenbaum and Schmidt leadership continuum †¢ Fieldler’s contingency theory †¢ Situational leadership †¢ Path-goal theory. †¢ Contemporary theories d. Explain the various leadership styles Leadership Institute of Chartered Accountants, Ghana 13 Proposed Sylabus for ICAG Qualifying Examinations PAPER 1. 2 Bussiness Management MAIN TOPIC (Cont’d. ) SYLLABUS CONTENT Motivation . Explain the theories of motivation. b. Describe the role of behavioural aspect of motivation. c. Evaluate the limitations to motivation theories. d. Describe how teamwork and consultative management are used as motivational tools. e. Outline the linkage between motivation and output. a. Explain the nature and importance of organizational control. b. Describe the control process. c. Discuss the different organisational control process. d. Explain the different control methods. a. Explain the mean ing and role of communication in modern organisations. b.Explain the main forms of communication. c. Describe the communication process. d. Distinguish between organisational communication channels and explain their role in managing effectively. e. Discuss the roles of negotiation in the management process both within an organisation and with external bodies. f. Identify and describe barriers to communication. a. Define and analyse the concept of management groups, inter or intra-group relations and how motivation influences group/managerial behaviour. b. Analyse and evaluate the concept of team approach in directing organisational activities. . Explain how groups are formed within organisations and how this affects performance. d. Explain the nature, functions and purposes of social groups in organisations. e. Explain inter-personal and inter-group relations and distinguish between them. f. Define and analyse the concept of organisational culture and business etiquette in organisat ions. Controlling Communication Groups and Teamwork 14 Institute of Chartered Accountants, Ghana Business Management PAPER 1. 2 Bussiness Management MAIN TOPIC (Cont’d. ) SYLLABUS CONTENT Human Resource Management a.Explain the role of the human resource management function and its relationship to other parts of the organisation. b. Describe the recruitment process. c. Distinguish between training and development and show their relationship. d. Explain the meaning and effects and/or application of job evaluation, staff appraisal, performance measurement and evaluation; promotion and demotion. e. Explain the disciplinary procedure in human resource management. f. Explain compensation systems and the significance of indirect compensation. g. Explain the concept of organisational health and safety and its benefits. . Distinguish between duties of employer's and employees responsibilities. Marketing Management a. Explain the marketing concept. b. Outline the strategic roles of ma rketing in organisations. c. Explain the main elements of a marketing plan and importance. d. Explain segmentation and targeting of markets and positioning of products within markets. e. Explain the elements of the marketing mix and their application. f. Describe the role of technology in modern marketing. g. Explain the differences and similarities in the marketing of products and services. h. Design and implement a pricing strategy. . Explain customer care strategies as a means of achieving competitive advantage and their relationship with total quality management. Institute of Chartered Accountants, Ghana 15 Proposed Sylabus for ICAG Qualifying Examinations PAPER 1. 2 Bussiness Management (Cont’d. ) MAIN TOPIC SYLLABUS CONTENT Operations Management a Explain the following types of production process: †¢ Job production †¢ Batch production †¢ Mass/continuous/flow production b. Explain and compare the following methods of plant layout: †¢ Process layout â € ¢ Product layout †¢ Fixed-position layout. c.Discuss the role of operations management in organizations. d. Explain the concept of quality and total quality management. e. Explain how the quality of products and services can be assessed, measured and improved. RECOMMENDED/REFERENCE TEXTS 1. 2. 3. 4. 5. ICAG Study Text. Appleby P. O. Modern Business Administration, Pitman. Boachie-Mensah, F. O. Essentials of Management, Woeli Publishing Services. Cole, G. A. Management: Theory and Practice. DP Publications. Marfo-Yiadom, E. Principles of Management, Woeli, Publishing Services. 16 Institute of Chartered Accountants, GhanaEconomics PAPER 1. 3 Economics 1. OBJECTIVES AND LEARNING OUTCOMES On completion with this paper, candidates should be able to: †¢ explain the nature and scope of economics; †¢ define and explain the fundamental problems of satisfying wants from scarce resources with alternative uses or describe resources allocation in relation to competing wants; à ¢â‚¬ ¢ explain and offer illustrations of the main techniques of economic analysis as a basis for business decisions; †¢ identify how macroeconomic variables and government economic policies affect and/or influence an organisation. explain the main features and contemporary trends of the Ghanaian economy and apply the concepts and techniques of economics to current business issues. 2. FORM OF EXAMINATION The examination will be a three (3) hour paper of seven (7) questions, five (5) of which should be answered by candidates. The paper will consist of two (2) sections, A and B. Section A will consist of four (4) questions on microeconomics and Section B will consist of three (3) questions on macroeconomics.Candidates are required to answer three (3) questions from Section A and two (2) questions from Section B. 3. SYLLABUS WEIGHTING GRID This grid shows the relative weightings of topics within this subject and should guide the relative study time spent on each. The marks availab le in the assessment will equate to the weightings below. However, there might be slight variations in some instances as they serve as a guide only. Institute of Chartered Accountants, Ghana 17 Proposed Sylabus for ICAG Qualifying Examinations PAPER 1. 3 Economics SYLLABUS COVERAGE (Cont’d. ) WEIGHTING (%)Basic Economics — Concepts and Systems Price and quantity determination Elasticity concepts Theory of consumer behaviour Theory of production Theories of costs and revenues Theory of the Firm National income accounting Money and banking Public Finance International Trade TOTAL 7 10 8 10 10 5 10 10 10 10 10 100 18 Institute of Chartered Accountants, Ghana Economics PAPER 1. 3 Economics SECTION A: Microeconomics MAIN TOPIC (Cont’d. ) SYLLABUS CONTENT Basic Economic Concepts and System a. Define and explain economics in relation to production, distribution. b. Consumption of goods and services. c.Explain the concepts of scarcity, choice and scale of preference. d. Explain the concept of opportunity cost in relation to individuals, firms and government. e. Identify the main characteristics of the various economic systems and explain their merits and demerits. f. Discuss the role of economics in business decision making. a. Define demand and supply and identify the types. b. Identify and explain the determinants of quantity demanded and supplied. c. Explain individual and market demand and supply using tables, graphs and equations. d. Distinguish between a change in quantity demanded and a change in demand. . State and explain the determinants of a change in demand and a change in quantity demanded. f. Distinguish between a change in quantity supplied and a change in supply. g. State and explain the determinants of a change in supply and a change in quantity supplied. h. Identify and explain the determinants of a change in supply and a change in quantity supplied. i. Explain the concepts of equilibrium price and quantity via demand and supply with the aid of tables and diagrams. j. Determine equilibrium price(s) and quantity(ies) mathematically for a single and a two-commodity model. . Define and explain maximum (ceiling) and minimum (floor) price legislations and give reasons for legislating prices. l. State and explain the consequences of price legislation with the aid of diagrams. m. Explain the remedies for the consequences of price legislation. Institute of Chartered Accountants, Ghana 19 Price and Quantity Determination Proposed Sylabus for ICAG Qualifying Examinations SECTION A: Microeconomics MAIN TOPIC (Cont’d. ) SYLLABUS CONTENT Elasticity Concepts a. Distinguish between own price (point/arc), cross and income elasticities of demand. b.Calculate and interpret coefficients of own price (point/arc), cross and income elasticities of demand. c. Identify and explain the determinants of price elasticity of demand. d. Calculate and interpret coefficients of price (point/ arc) elasticity of supply. e. Identify a nd explain the determinants of price elasticity of supply. f. Explain how elasticities are used in pricing decisions, production and incidence of taxation. a. Define and explain the concept of utility. b. Define and graph total, average and marginal utilities and calculate average and marginal utilities from total utility. . State and explain the law of diminishing marginal utility. d. Use the law of diminishing marginal utility to explain equilibrium of the consumer (one commodity, two or more commodities) and derive the demand curve. e. Use the equilibrium conditions for two commodities to determine the equilibrium quantities consumed via tables. f. Use the law of diminishing marginal utility to resolve the paradox of value. g. Explain substitution and income effects and use them to show the curvature of demand curves for normal, inferior and Giffen goods. a.Identify, define and explain the factors of production. b. Explain fixed and variable inputs in relation to short and long r un production periods. c. Define and explain total, average and marginal products. d. Calculate marginal and average products from total product and represent total, average and marginal products graphically. e. Identify and explain the relationships between total, average and marginal products. Theory of Consumer Behaviour The Theory of Production 20 Institute of Chartered Accountants, Ghana Economics SECTION A: Microeconomics MAIN TOPIC (Cont’d. ) SYLLABUS CONTENT . State and explain the law of variable proportions and use the law to explain the stages of production. g. Explain the long run behaviour of output (returns to scale). a. Distinguish between: †¢ Private and social costs. †¢ Implicit and explicit costs. b. Define, tabulate, represent graphically and explain the inter-relationship of short run costs (fixed and variables costs; total, average and marginal costs). c. Use the law of diminishing returns to variable proportions to explain the conventional shap es (Ushapes) of the average variable cost and marginal cost curves. d.Explain and represent graphically, long run costs. e. Explain economies and diseconomies of scale. f. Use economies and diseconomies of scale to explain: †¢ The position of the long run average cost curve in cost-output, space. †¢ The conventional shape of the long run average cost curve. g. Define and explain total, average and marginal revenues. h. Explain the behaviours of total, average and marginal revenues in both price-taking and pricemaking industries. a. Define the concept of profit in relation to normal and economic profits. b. Distinguish between accountant's and economist's profits. . Distinguish between economic profit and economic loss. a. Distinguish among factory, firm and industry. b. Explain the general concept of equilibrium of the firm. c. Define the various forms of market structures (perfect competition, monopoly, monopolistic competition) and identify the characteristics of each of them. d. Explain the short run and long run positions of the Institute of Chartered Accountants, Ghana 21 Theories of Costs and Revenues Theory of the Firm Proposed Sylabus for ICAG Qualifying Examinations SECTION B: Microeconomics MAIN TOPIC (Cont’d. )SYLLABUS CONTENT perfectly competitive firm, monopolistic firm and monopolistic competitive firm. e. Define oligopoly and identify its characteristics. f. Define, distinguish and give reasons for regulation, deregulation and privatization of firms. National Income Accounting a. Explain the stock and flow concepts of measurement. b. Define national income. c. Explain the following methods of measuring national income: †¢ Expenditure approach †¢ Product (output) approach †¢ Income approac d. Identify and explain the problems and factors that influence the size of national income. e.Explain the relevance of the size of national income. f. Define consumption, savings, investment, government expenditure, imports and exports. g. Identify and explain the determinants of consumption; savings, investment, government expenditure, imports and exports. h. Explain income determination, equilibrium income, the multiplier and the basic accelerator. i. Compute equilibrium income, tax, disposable income and savings. j. Define and explain aggregate demand and aggregate supply. k. Illustrate changes to equilibrium level of national income using aggregate demand and aggregate supply analysis. . Define, identify types and explain measures for tackling unemployment. a. Identify and explain the origins, nature, features and functions of money. b. Identify types of banks and explain the functions of central and commercial banks. c. Explain credit creation by commercial banks. d. Identify and explain the instruments of monetary policy. e. Explain Monetary Policy Formulation through the Monetary Policy Committee (MPC). Money and Banking 22 Institute of Chartered Accountants, Ghana Economics SECTION B: Microeconomic s MAIN TOPIC (Cont’d. ) SYLLABUS CONTENT f.Explain the effects of monetary policy on business organizations. g. Define stock exchange and explain its functions and importance. h. Define and explain demand and supply of money and the three motives of holding money. i. Define and explain inflation and the Philips curve. Public Finance a. Identify and explain the sources of government revenue b. Identify and explain the various items of government expenditure. c. Define National Budget and explain balanced budget, deficit budget and surplus budget. d. Identify and explain sources of financing budget deficit and its economic implications. . Explain Fiscal Policy and identify its tools. f. Define tax and explain the principles (progressive, regressive and proportional) and incidence of taxation. g. Outline the merits and demerits of direct and indirect taxes. h. Define national debt and identify the sources of national debt accumulation. i. Explain the arguments for and against in crease in national debt. j. Identify and explain ways of managing the national debt (e. g. debt swap, Highly Indebted Poor Countries (HIPC). Initiative, conversion of national debts into bonds etc. ) a. Give reasons for international trade. . Explain the concept and consequences of globalisation for business and national economies. c. Explain the concept of balance of payments and its implications for business and for government policy. d. Identify and explain the various components of balance of payments. e. Distinguish between balance of payments deficit and balance of payment surplus. Institute of Chartered Accountants, Ghana 23 International Trade Proposed Sylabus for ICAG Qualifying Examinations MAIN TOPIC SYLLABUS CONTENT f. Explain the causes and effects of fundamental imbalances in the balance of payments. g.Identify and explain exchange rate systems (fixed, flexible and managed float). h. Analyse the interrelationship between exchange rate and current accounts balance. i. I dentify and explain types of international trade controls, arguments for and against trade control and liberalization. j. Explain the role of major institutions (e. g. World Bank, International Monetary Fund) in fostering internal development and economic stabilization. RECOMMENDED/REFERENCE TEXTS 1. 2. 3. 4. 5. ICAG Study Manual on Economics Begg, D. Economics, McGraw-Hill Colander, D. C. Microeconomics, McGraw-Hill Colander, D. C. Macroeconomics, McGraw-Hill Pomayie, P.Macroeconomics, An Introductory Text 24 Institute of Chartered Accountants, Ghana Management Information Systems PAPER 1. 4 Management Information System 1. OBJECTIVES AND LEARNING OUTCOMES This paper is concerned with the strategic importance of information systems to organisations in the modern business environment. It recognises that although may organisations employ Information Technology (IT) Professionals, Chartered Accountants now have a key role to play in the provision of information that adds significant v alue to the ever-increasing volume of data processed for management decision making.At the end of the course, candidates should be able to: †¢ Develop an understanding of general information system concepts and practices and technological environment of the contemporary organisation. Apply a systematic approach to the use of information technology in organisations. Appraise the technological environment in order to support the practical aspects of information provision and usage. Identify and apply project management techniques; and develop project proposals. †¢ †¢ 2. FORM OF EXAMINATION The examination will be a three-hour paper of six (7) questions made up of Sections A and B.Section A will consist of a compulsory case study question of 40 marks. Section B will consist of five (5) questions out of which candidates will be required to answer three (3) questions. 3. SYLLABUS WEIGHTING GRID This grid shows the relative weightings of topics within this subject and shoul d guide the relative study time spent on each. The marks available in the assessment will equate to the weightings below. However, there might be slight variations in some instances as they serve as a guide only. Institute of Chartered Accountants, Ghana 25 Proposed Sylabus for ICAG Qualifying Examinations PAPER 1. Management Information System SYLLABUS COVERAGE Systems Theory and Practice Information Systems Computers in Communication Information Technology and the Professional Accountant Business Strategy and IS/IT Alignment Project Management TOTAL MAIN TOPIC SYLLABUS CONTENT (Cont’d. ) WEIGHTING (%) 10 35 10 20 10 15 100 1. Systems Theory and Practice Systems concepts and definition a. Explain systems concepts and give examples of real systems. b. Explain the essence of systems approach to problem solving. c. Describe the holistic features of systems. d. Differentiate between system boundaries and environments. . Explain the following system types: †¢ Open †¢ Cl osed †¢ Adaptive †¢ Cybernetic †¢ Deterministic †¢ Probabilistic (or stochastic) System and Subsystems a. Explain the relationships among subsystems in a typical business context. b. Apply the theory of sub-optimality and systems objective. c. Explain the need for system control and feedback. d. Explain the following system control elements: †¢ Standard †¢ Comparators †¢ Sensor †¢ Effectors e. Represent the control mechanisms diagrammatically. 26 Institute of Chartered Accountants, Ghana Management Information Systems PAPER 1. 4 Management Information System (Cont’d. MAIN TOPIC SYLLABUS CONTENT 2. Information Systems Application of Information systems in the organisation a. Define and distinguish between data and information. b. Explain the attributes of good information, i. e. accuracy, timeliness, brevity, conciseness, reliability, etc. c. Explain the concept of the value of information. d. Explain the term, Information Technology. e. Explain the role and uses of information in organisation i. e. competitive advantage and support of managerial functions. f. Explain the different types of information systems, i. e. TPS, MIS, DSS, EIS, and ES. g.Describe the three levels of information in relation to the levels of management. Traditional file Structures and storage Media a. Explain the terms, computer file; record; field; record key. b. Explain the relationship and difference between transaction and master files. c. Describe the key methods of file organisation and access. d. List the characteristics and explain the workings of the different storage media — magnetic tape, magnetic disc, diskette, CD-ROM, DVD, Zip disc, flash disk, etc. Database Design and Implementation a. Define database and explain the importance of databases in the operations of an organisation. . Describe the types and enumerate the advantages and disadvantages of database models — hierarchical, network, relational and object-ori ented. c. Explain with examples, components of a Database Management System (DBMS) — hardware, software, people (users, designers, administrators, procedures, data/information). d. Apply database tools to real life systems — Entities, attributes and Relationships. e. Explain entity relationship modeling, data analysis and entity life history. Institute of Chartered Accountants, Ghana 27 Proposed Sylabus for ICAG Qualifying Examinations PAPER 1. 4 Management Information System (Cont’d. )SYLLABUS CONTENT 2. Information Systems (Cont’d) Computer Hardware and Software Concepts a. Explain the hardware concepts of the computer and list its benefits and shortcomings. b. Describe the categories/generations of computers — super, mainframe, mini and microcomputers. c. Draw the basic functional units of a computer system and show how they interrelate — CPU, input/output devices (peripheral devices). d. Describe the various types of computer memory â₠¬â€ semi-conductor memory, cache memory, video memory and flash memory. e. Explain operating systems — single user, multi user. f. Explain system software and describe its components. . Explain the functions of the operating system (os). h. Explain Applications software and describe Packagres. Bespoke software, special purpose software, general purpose software. i. Viruses, worm. j. Explain with examples the evolution of computer programming languages — machine language, assembly language, high level language, 4GL and 5GL. g. Explain the concept of software testing — unit testing, static testing, dynamic testing and regression testing. h. Explain the use of the following: †¢ CASE tools †¢ Prototyping tools †¢ Query language. i. Describe the qualities of a good programme.Representation of processes in computer Systems a. Draw diagrams to represent computer processes using the following tools: †¢ Programme flowchart †¢ Decision trees â₠¬ ¢ Decision tables †¢ Data flow diagram Human Computer Interfaces (HCI) a. Explain the various types of communication between users and computer systems — command driven, menu 28 Institute of Chartered Accountants, Ghana Management Information Systems PAPER 1. 4 Management Information System (Cont’d. ) SYLLABUS CONTENT driven, GUI, user-friendliness. b. Internal and External design of systems. 2. Information Systems (Cont’d) Systems Development Life-cycle (SDLC) a.Explain the following phases of the SDLC: †¢ Problem identification †¢ Feasibility studies †¢ System investigation †¢ System analysis †¢ System design †¢ Implementation †¢ Post-implementation review. b. Describe the methods required to measure the success of the system. c. Apply structured methodology to system development. Processing Systems Options a. Describe the processing options and their characteristics (batch, real-time, demand, online, distributed, cent ralized and decentralized processing). IS/IT in the organisation a. Explain the role and describe the staffing, functions and responsibilities of the IS/IT department in an organization. . Explain the principles of facilities management and outsourcing. Controls and Security of Computer Operations a. Explain the principles of system security and control. b. Explain the under-listed control measures: †¢ Administrative controls †¢ Input and output controls †¢ Operational controls †¢ General controls †¢ Verification and Validation c. Explain the principles of hardware/software maintenance (preventive, corrective, adaptive and perfective). Institute of Chartered Accountants, Ghana 29 Proposed Sylabus for ICAG Qualifying Examinations PAPER 1. 4 Management Information System (Cont’d. )MAIN TOPIC SYLLABUS CONTENT Data communication Principles, Objectives and Uses 3. Computers in Communications a. Explain the importance of computer networks and distributed pr ocessing. Computers in Communication a. Explain the following computer network types: †¢ Wide area †¢ Metropolitan area †¢ Local area b. Explain computer network topologies and protocols. c. Internet, Intranet, Extranet. Office Automation a. Explain office automation. b. Explain E-Business c. Explain the following: †¢ E-Commerce †¢ E-Mail †¢ Telecommuting †¢ E-Banking †¢ Telesales †¢ Video conferencing †¢ Tele conferencing †¢ EDI †¢ E-Learning 4.Information Technology andthe Professional Accountant Information Technology and the Contemporary Accountant a. Explain how information technology influencing the ways in which organization are structured, managed and operated. b. Identify the required level of knowledge of information technology by professional accountants which can be applied to practical problems in the organization. Information Technology Knowledge and Skills Areas a. Explain the role of the accountant in inform ation technology concepts for business systems under the following: 30 Institute of Chartered Accountants, Ghana Management Information SystemsPAPER 1. 4 Management Information System (Cont’d. ) MAIN TOPIC SYLLABUS CONTENT †¢ The professional accountant as a user information technology. †¢ The professional accountant as a manager information system. †¢ The professional accountant as a designer business information systems. †¢ The professional accountant as an evaluator information systems. 5. Business Strategy and IS/IT Alignment of of of of a. Explain the approach that an organisation may follow to formulate its strategic business objectives. b. Identify current trends in information technology and the opportunities they offer to organisations. c.Distinguish between a business strategy and an information systems strategy. d. Identify responsibility for the ownership of this strategy. e. Explain the use of IS/IT for competitive advantage, using Porter's mo del. a. Define Project Management and explain the terms of reference of a project. b. Explain the roles and responsibilities of staff who manage and participate in projects. c. Explain roles and responsibilities of the project manager. d. Explain the advantages of using a project management software package in the project management process. e. Construct and analyse a project network. f. Construct and interpret a Gantt chart. . Project Management LIST OF RECOMMENDED TEXT 1. 2. 3. 4. 5. 6. 7. 8. ICAG Study Manual. Stubbe, R. Computers and Information Systems. French, C. A. Data Processing and Information Technology; 9th Edition. Landon, K. C. Information Systems and the Internet. Kenneth E. Kedeall, K. E. Systems Analysis and Design. Senn, J. A. Information Systems in Management. Wadsworth. Anderson, J. A. Data Processing Vol. 1 & 2; M & E Pitman. French, C. S. Data Processing and Information Technology. DPP. Institute of Chartered Accountants, Ghana 31 Proposed Sylabus for ICAG Qual ifying Examinations PROFESSIONAL PART 2 PAPER 2. : Quantitative Tools in Business 1. OBJECTIVES AND LEARNING OUTCOMES At the end of the course, candidates should be able to: †¢ Develop the understanding and application of statistical and mathematical techniques needed to solve business and accounting problems. †¢ Explain and interpret the role of the relevant aspects of quantitative techniques needed to solve business and accounting problems. †¢ Make the most informed decision in business and accounting scenarios. 2. FORM OF EXAMINATION The examination will be a three-hour paper of seven (7) questions in all out of which candidates are required to answer any 5 questions. . SYLLABUS WEIGHTING GRID This grid shows the relative weightings of topics within this subject and should guide the relative study time spent on each. The marks available in the assessment will equate to the weightings below. However, there might be slight variations in some instances as they serve a s a guide only. SYLLABUS COVERAGE Data collection and interpretation Decision making under risk and uncertainty Forecasting techniques Planning and control techniques Optimisation and decision making techniques TOTAL 32 Institute of Chartered Accountants, GhanaWEIGHTING (%) 10 20 25 25 20 100 Quantitative Tools in Business PAPER 2. 1: Quantitative Tools in Business MAIN TOPIC SYLLABUS CONTENT (Cont’d. ) 1. Data Collection and Interpretation a. Collect statistical data using the various sampling methods. b. Classify and tabulate data in the form of frequency distribution table. c. Present data pictorially in the form of bar chart, pie chart, give, histogram, Z-Chart, Gantt chart, Lorenz curve, etc. d. Calculate measures of central tendencies ( mean, median and mode) from a given data. e.Calculate measures of dispersion (standard deviation, range, mean deviation, variation, coefficient of variation, quartile deviation and skewness, etc) from a given data. a. Define probability. b. Distinguish between equally likely and mutually exclusive outcomes. c. Explain marginal, joint and conditional probabilities. d. Apply Bayes' theorem to problem solving. e. Draw probability trees. f. Distinguish between dependent and independent events. g. Explain the laws of probability. h. Calculate and interpret expected value and standard deviation of a discrete random variable. . Use decision tree to solve problem. j. Prepare a conditional pay-off table. k. Use normal distribution to solve problems. Matrix Algebra a. Present matrix information in a tabular form. b. Solve matrix algebra: addition, subtraction, scalar multiplication, matrix algebra. c. Solve problems involving matrix inversion. d. Solve simultaneous equations by matrix algebra. e. Solve problems involving probability transition matrices. 2. Decision Making Under Risk and Uncertainty Institute of Chartered Accountants, Ghana 33 Proposed Sylabus for ICAG Qualifying Examinations PAPER 2. : Quantitative Tools in Business MAIN TOPIC SYLLABUS CONTENT (Cont’d. ) 3. Forecasting Techniques Simple Linear Regression Analysis a. Draw scatter diagram. b. Find the equation of the line of best fit using the east squares method. c. Draw the line of best fit on a scatter diagram. d. Interpret the regression coefficient. e. Use the regression equation to forecast. f. Use the computer output to test for regression (t-test, ftest). Simple Linear Correlation Theory a. Distinguish between regression and correlation. b. Explain negative zero and positive correlation. c.Distinguish between product-moment and Spearman's rank correlation coefficient. d. Calculate and interpret product-moment and Spearman's correlation coefficients. Time Series Analysis a. Explain time series. b. State and explain the components of a time series. c. Determine the trend using the methods of moving averages and least squares. d. Apply additive and multiplicative models to determine average seasonal variations. e. Use time se ries to forecast. 4. Planning and Control Techniques Network Analysis a. Distinguish between critical path method (CPM) and programme evaluation and review techniques (PERT). . Draw network diagrams using activity-on-arrow and activity-on nod models. c. Explain optimistic, most likely and pessimistic times for an activity. d. Calculate the expected duration and variance for an activity. e. Determine critical path and project duration. f. Distinguish among and calculate total float, independent float and free float. 34 Institute of Chartered Accountants, Ghana Quantitative Tools in Business PAPER 2. 1: Quantitative Tools in Business MAIN TOPIC SYLLABUS CONTENT (Cont’d. ) g. Calculate the probability and minimum time for completing a project. h.Crash a project using cost-time slope (lease incremental cost) concept. i. Use network analysis to allocate resources. Stock Control a. State the importance of keeping stock. b. Distinguish the simple economic order quantity (EOQ), gradu al replenishment and discounts models. c. Use these models to calculate the optimum quantity and determine reorder levels and safety stocks. d. Use the discrete probability to calculate the optimum quantity and determine reorder levels and safety stocks e. Use the normal distribution to determine the reorder levels, service levels and safety stocks. 5.Optimization †¢ and Decision Making Techniques Differential Calculus a. Differentiate polynomial functions (first and second derivatives only). b. Determine the turning points of a function (maximum, minimum, point of inflection). c. Use differential calculus to maximize revenue and profits (with or without tax) and to minimize cost (including the stock control, EOQ problem). d. Use differential calculus to determine point elasticity of demand. Integral Calculus a. Derive a function given its derivative. b. Apply integration to business problems. Linear Programming a. Formulate the primal linear programming problem. . Formulate th e dual linear programming problem. c. Solve the linear programming problem (involving two variables) graphically. d. Set the initial simplex tableau. Institute of Chartered Accountants, Ghana 35 Proposed Sylabus for ICAG Qualifying Examinations PAPER 2. 1: Quantitative Tools in Business MAIN TOPIC SYLLABUS CONTENT (Cont’d. ) e. Carry out the first iteration of the simplex tableau. f. Interpret the final simplex tableau. g. Explain limiting factors (scarce resources) and their shadow prices. h. Carry out sensitivity analysis on the graphical and simplex solutions.LIST OF RECOMMENDATION TEXT 1. 2. 3. ICAG Study Text Francis, A. Business Mathematics and Statistics. Continuum. Lucey, T Quantitative Techniques. Continuum. 36 Institute of Chartered Accountants, Ghana Audit And Internal Review PAPER 2. 4: Audit and Internal Review 1. OBJECTIVES AND LEARNNG OUTCOMES The course is aimed at developing the candidates' knowledge and understanding of the audit process from the planning st age through to the reporting stage and the techniques used in the conduct of internal and external audit. At the end of the course, candidates should be able to †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ 2. xplain the nature , purpose and scope of an audit; state and explain the purposes of the regulatory framework within which the auditor's work is conducted; outline the qualification, functions, responsibilities and rights of an auditor; describe the audit procedures required at the planning stage of an audit; explain the techniques for collecting and evaluating audit evidence; explain the techniques for collecting and evaluating audit evidence; explain and apply basic auditing concepts like internal controls, sampling, compliance test, substantive test, weakness test, etc; assess audit risk and design appropriate audit procedures; draw valid conclusions from the results of audit tests; and prepare various reports relating to audit assignments. FORM OF EXAMINATION The examination will consist of three-hour paper. Candidates are to answer all the five (5) questions set. 3.SYLLABUS WEIGHTING GRID This grid shows the relative weightings of topics within this subject and should guide the relative study time spent on each. The marks available in the assessment will equate to the weightings below. However, there might be slight variations in some instances as they serve as a guide only. SYLLABUS COVERAGE Nature, Purpose and Scope of an Audit. The Regulatory Framework of Auditing and Professional Considerations Audit Planning. Evidence Gathering Internal controls and Evaluation of Control Risk Internal Audit and Other Assurance Engagements Conduct of Audit and Assurance Concept, process and Need for Assurance Reporting Framework TOTAL WEIGHTING % 20 20 20 15 10 15 100 37Institute of Chartered Accountants, Ghana Proposed Sylabus for ICAG Qualifying Examinations PAPER 2. 4: Audit and Internal Review MAIN TOPIC SYLLABUS CONTENT (Co nt’d. ) 1. Nature, Purpose and Scope of an Audit a. Define an audit. b. Explain the purpose/general objectives of an audit (distinguish between primary and secondary objectives). c. Examine the advantages of auditing to stakeholders. d. Explain and distinguish between the following types of audit: †¢ Internal/External †¢ Statutory/non-Statutory †¢ Financial/Operational †¢ Interim/Continuous /Final e. Explain the inherent limitations of an audit. f. Explain the concept of expectation gap. a.Describe the nature, purpose and scope of auditing standards and auditing guidelines (International auditing Standards). b. Explain the procedure for developing auditing standards and auditing guidelines (International Auditing Standards). c. Examine the statutory and ethical considerations relating to acceptance and continuance of audit assignments. d. Assess the code of professional conduct — independence, objectivity, integrity, duty of care, confidentiality an d conflict of interest. e. State the qualification of an auditor. f. State persons disqualified for appointment as an auditor. g. Describe the procedure for appointing and removing an auditor. h.Examine the duties, responsibilities, powers and rights of auditors. i. Describe the process of accepting audit engagements. j. State and explain the contents of letter of engagement. k. Examine the legal liabilities of the auditor. l. Explain how auditors are remunerated. m. Explain management and auditors respective responsibilities for the presentation of financial statements and detection of fraud and error. 2. The regulatory framework of auditing and Professional Considerations 38 Institute of Chartered Accountants, Ghana Audit And Internal Review PAPER 2. 4: Audit and Internal Review MAIN TOPIC SYLLABUS CONTENT (Cont’d. ) 3. Basic Principles and Concepts of Auditing a.Explain the fundamental principles and concepts of auditing: †¢ Walk through test †¢ †¢ †¢ à ¢â‚¬ ¢ †¢ †¢ †¢ †¢ †¢ †¢ Weakness test Compliance test Substantive test Vouching Audit risk Audit sampling — judgmental and statistical, and sample selection methods Systems based audit Materiality True and fair view Directional and rotational testing Systems and risk based audit. 4. Auditing Planning and Evaluation a. b. c. d. Explain the purpose and advantages of audit planning. Describe the process of audit planning. Prepare audit planning memorandum. Examine analytical review procedures as a planning technique. e. Evaluate preliminary materiality levels and audit risks. f. Evaluate the adequacy of accounting system. 5. Internal Controls and Evaluation of Control Risk a. State the reasons for organisations having effective systems of control. b. Identify the fundamental principles of effective control systems. c. Identify the main areas of a business that need effective control systems. d.Identify the components of internal control in both man ual and IT environments, including: †¢ the overall control environment and Control Procedures †¢ preventive, detective and corrective controls †¢ internal audit as a control factor e. Define and classify different types of internal control, with particular emphasis upon those which impact upon the quality of financial information. f. Show how specified internal controls mitigate risk and state their limitations. Institute of Chartered Accountants, Ghana 39 Proposed Sylabus for ICAG Qualifying Examinations PAPER 2. 4: Audit and Internal Review MAIN TOPIC SYLLABUS CONTENT (Cont’d. ) 5. Internal Controls and Evaluation of Control Risk (Cont’d) g. Identify internal controls for an organisation in a given scenario. h. Identify internal control weaknesses in a given scenario. i.Identify, for a specified organisation, the sources of information which will enable a sufficient record to be made of accounting or other systems and i n t e r n a l controls. j. Defin e internal control. k. State and explain the types and limitations of internal control. l. Explain the following in relation to internal control: objectives, methods of ascertaining, recording, evaluation, testing systems, control environments and control p