Applicability of Standards/Guidance Notes/Legislative Amendments etc. for May, 2017 – Final Examination

Paper 1: Financial Reporting

I. Framework for the Preparation and Presentation of Financial Statements.

II. Accounting Standards

AS No.    AS Title
1    Disclosure of Accounting Policies
2    Valuation of Inventories
3    Cash Flow Statements
4    Contingencies and Events Occurring after the Balance Sheet Date
5    Net    Profit   or   Loss   for   the   Period,   Prior   Period   Items   and   Changes  in
Accounting Policies
7    Construction Contracts (Revised 2002)
9    Revenue Recognition
10    Property, Plant and Equipment (2016)
11    The Effects of Changes in Foreign Exchange Rates (Revised 2003)
12    Accounting for Government Grants
13    Accounting for Investments
14    Accounting for Amalgamations
15    Employee Benefits
16    Borrowing Costs
17    Segment Reporting
18    Related Party Disclosures
19    Leases
20    Earnings Per Share
21    Consolidated Financial Statements
22    Accounting for Taxes on Income
23    Accounting for Investment in Associates in Consolidated Financial Statements
24    Discontinuing Operations
25    Interim Financial Reporting
26    Intangible Assets
27    Financial Reporting of Interests in Joint Ventures
28    Impairment of Assets
29    Provisions, Contingent Liabilities and Contingent Assets
III.  Guidance Notes on Accounting Aspects

1. Guidance Note on Accrual Basis of Accounting.

2. Guidance Note on Accounting Treatment for Excise Duty.

3. Guidance Note on Terms Used in Financial Statements.

4. Guidance Note on Accounting Treatment for MODVAT/CENVAT.

5. Guidance Note on Accounting for Corporate Dividend Tax.

6. Guidance Note on Accounting for Employee Share-based Payments.

7. Guidance Note on Accounting for Credit Available in respect of Minimum Alternate Tax under the Income Tax Act, 1961.

8. Guidance Note on Measurement of Income Tax for Interim Financial Reporting in the context of AS 25.

9. Guidance Note on Applicability of AS 25 to Interim Financial Results.

10. Guidance Note on Turnover in case of Contractors.

11. Guidance Note on the Schedule III to the Companies Act, 2013.

12. Guidance Note on Accounting for Expenditure on Corporate Social Responsibility Activities.

13. Guidance Note on Accounting for Derivative Contracts.

14. Guidance Note on Accounting for Depreciation in Companies in the context of Schedule II to the Companies Act, 2013

IV. Applicability of the Companies Act, 2013 and other Legislative Amendments

The relevant notified Sections of the Companies Act, 2013 and legislative amendments including relevant Notifications / Circulars / Rules / Guidelines issued by Regulating Authority up to 31st October, 2016 will be applicable for May, 2017 Examination.

V. Applicability of Indian Accounting Standard (Ind AS)

Topic of “Introduction of Indian Accounting Standards (Ind AS); Comparative study of ASs vis-a-vis Ind ASs; Carve outs/ins in Ind ASs vis-à-vis International Financial Reporting Standards (IFRSs)” has been made applicable in place of “Overview of International Accounting Standards (IAS) / International Financial Reporting Standards (IFRS), Interpretations by International Financial Reporting Interpretation Committee (IFRIC), Significant differences vis-a-vis Indian Accounting Standards; Understanding of US GAAPs, Applications of IFRS and US GAAPs”.

Considering the significance and relevance of the Ind AS, the above topic has been included in the syllabus and the students are expected to have an overall knowledge of the contents covered therein. However, considering the extensive coverage of the contents covered in such topic, from the examination perspective, simple problems involving conceptual or application issues may be asked in the examination.

VI. Applicability of Amendments made by MCA in the Companies (Accounting Standards) Rules, 2006 and Companies (Indian Accounting Standards) Rules, 2015

Amendments made by MCA on 30.3.2016 in the Companies (Accounting Standards) Rules, 2006 and Companies (Indian Accounting Standards) Rules, 2015 are applicable for May, 2017 examination.

VII. Non-applicability of AS 30, 31 and 32 on the topic ‘Accounting and Reporting of Financial Instruments’

Ind AS 32 “Financial Instruments: Presentation”, Ind AS 107 “Financial Instruments: Disclosures” and Ind AS 109 “Financial Instruments” have been made applicable to the topic ‘Accounting and Reporting of Financial Instruments’ instead of AS 30 “Financial Instruments: Recognition and Measurement”, AS 31 “Financial Instruments: Presentation” and AS 32 “Financial Instruments: Disclosures”.

In view of the complexities involved, simple practical problems involving conceptual issues or application issues may be asked in the examination.

Paper 3: Advanced Auditing and Professional Ethics

I. Statements and Standards

1. Statement on Reporting under Section 227(1A) of the Companies Act, 1956 (Section 143 (1) of the Companies Act, 2013).

 
2. Framework for Assurance Engagements.

II. Engagements and Quality Control Standards on Auditing

S.No    SA    Title of Standard on Auditing
1    SQC 1    Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information, and Other Assurance and Related Services Engagements
2    SA 200    Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Standards on Auditing
3    SA 210    Agreeing the Terms of Audit Engagements
4    SA 220    Quality Control for Audit of Financial Statements
5    SA 230    Audit Documentation
6    SA 240    The Auditor’s    responsibilities  Relating to   Fraud  in  an Audit of
Financial Statements
7    SA 250    Consideration of Laws and Regulations in An Audit of Financial Statements
8    SA 260    Communication with Those Charged with Governance
9    SA 265    Communicating Deficiencies in Internal Control to Those Charged with Governance and Management
10    SA 299    Responsibility of Joint Auditors
11    SA 300    Planning an Audit of Financial Statements
12    SA 315    Identifying   and  Assessing   the   Risks  of Material    Misstatement
through Understanding the Entity and its Environment
13    SA 320    Materiality in Planning and Performing an Audit
14    SA 330    The Auditor’s Responses to Assessed Risks
15    SA 402    Audit    Considerations   Relating  to   an   Entity   Using  a   Service
Organization
17    SA 500    Audit Evidence
18    SA 501    Audit Evidence – Specific Considerations for Selected Items
19    SA 505    External Confirmations
20    SA 510    Initial Audit Engagements-Opening Balances
21    SA 520    Analytical Procedures
22    SA 530    Audit Sampling
23    SA 540    Auditing Accounting Estimates, Including Fair Value Accounting Estimates, and Related Disclosures
24    SA 550    Related Parties
25    SA 560    Subsequent Events
26    SA 570    Going Concern
27    SA 580    Written Representations
28    SA 600    Using the Work of Another Auditor
29    SA 610 (Revised)    Using the Work of Internal Auditors
30    SA 620    Using the Work of an Auditor’s Expert
31    SA 700    Forming an Opinion and Reporting on Financial Statements
32    SA 705    Modifications to the Opinion in the Independent Auditor’s Report
33    SA 706    Emphasis of Matter Paragraphs and Other Matter Paragraphs in the Independent Auditor’s Report
34    SA 710    Comparative      Information     –      Corresponding     Figures     and
Comparative Financial Statements
35    SA 720    The Auditor’s Responsibility in     Relation to Other Information in
Documents Containing Audited Financial Statements
36    SA 800    Special Considerations-Audits of Financial Statements Prepared in Accordance with Special Purpose Framework
37    SA 805    Special     Considerations-Audits    of    Single    Purpose    Financial
Statements    and  Specific   Elements,   Accounts   or   Items   of a
Financial Statement
38    SA 810    Engagements to Report on Summary Financial Statements
39    SRE 2400 (Revised)    Engagements to Review Historical Financial Statements
40    SRE 2410    Review    of    Interim    Financial   Information    Performed   by    the
Independent Auditor of the Entity
41    SAE 3400    The Examination of Prospective Financial Information
42    SAE 3402    Assurance Reports on Controls At a Service Organisation
43    SAE 3420 (New)    Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus
44    SRS 4400    Engagements to Perform Agreed Upon Procedures Regarding Financial Information
45    SRS 4410 (Revised)    Compilations Engagements
 

III. Guidance Notes and other publications

1. Code of Ethics

2. Guidance Note on Independence of Auditors.

3. Guidance Note on Audit under Section 44AB of the Income-tax Act.

4. Guidance Note on Audit of Inventories.

5. Guidance Note on Audit of Debtors, Loans and Advances.

6. Guidance Note on Audit of Investments.

7. Guidance Note on Audit of Cash and Bank Balances.

8. Guidance Note on Audit of Liabilities.

9. Guidance Note on Audit of Revenue.

10. Guidance Note on Audit of Expenses.

11. Guidance Note on Computer Assisted Audit Techniques (CAATs).

12. Guidance Note on Audit of Payment of Dividend.

13. Guidance Note on Audit of Capital and Reserves.

14. Guidance Note on Audit of Banks.

15. Guidance Note on Audit of Internal Financial Controls over Financial Reporting.

16. Guidance Note on Reporting under section 143(3)(f) and (h) of the Companies Act, 2013.

17. Guidance Note on Reporting on Fraud under section 143(12) of the Companies Act, 2013.

18. Guidance Note on the Companies (Auditor’s Report) Order, 2016.

IV Applicability of the Companies Act, 2013:

(i) The relevant notified Sections of the Companies Act, 2013 and other legislative amendments including relevant Notifications / Circulars / Rules / Guidelines issued by Regulating Authorities, cut-off date will be 31st October, 2016.

(ii) SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Companies (Auditor’s Report) Order, 2016 are applicable for May, 2017 Examination.

Paper 4 : Corporate and Allied Laws

Applicability of the following Amendments/Circulars/Notifications:

(I) The Companies Act, 2013

The relevant sections of the Companies Act, 2013, along with significant Rules/ Notifications/ Circulars/ Clarification/ Orders issued by the Ministry of Corporate Affairs upto 31st October 2016.

For updates, see http://www.mca.gov.in/

(II) SEBI (Issue of Capital and Disclosure Requirement) Regulations, 2009

Vide Notification No. SEBI/LAD-NRO/GN/2016-17/003 dated 25th May, 2016, SEBI hereby further amend the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 through the enforcement of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Third Amendment) Regulations,2016 from the date of their publication in the Official Gazette.

Amendments have been made in relevant Regulations 2, 4, 73 & 84 of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 and these shall be applicable to issuers filing offer documents with the Registrar of companies on or after the date of commencement of these regulations.

For amendment, refer the following Link

http://www.sebi.gov.in/cms/sebi data/attachdocs/1 46424532001 0.pdf

(III) The Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Act, 2016

Ministry of Law and Justice on 16th August, 2016 has published for general information, the Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Act, 2016.

It is an Act further to amend four laws: (i) Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI), (ii) Recovery of Debts due to Banks and Financial Institutions Act, 1993 (RDDBFI), (iii) Indian Stamp Act, 1899 and (iv) Depositories Act, 1996, and for matters connected therewith or incidental thereto.

Chapter II, of this amendment Act deals with the amendments to the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, whereby, it is an act to regulate securitisation and reconstruction of financial assets and enforcement of security interest and to provide for a central database of security interests created on property rights, and for matters connected therewith or incidental thereto.

For amendment, refer the following Link

http://financialservices.gov.in/Banking/LAWS.pdf

Non-Applicability of the following Amendments/Circulars/Notifications / chapters of the Study material:

Chapter 9 of the study material (January 2016 edition) covering provisions relating to Revival and Rehabilitation of Sick-Industrial Companies.

Paper 7 : Direct Tax Laws & Paper 8 : Indirect Tax Laws

Applicability of Finance Act, Assessment Year etc. for May, 2017 Examination

The provisions of direct tax laws and indirect tax laws, as amended by the Finance Act, 2016, including notifications and circulars issued up to 31st October, 2016, are applicable for May, 2017 examination. The relevant assessment year for Paper 7: Direct Tax Laws is A.Y.201 7-1 8.