Chartered Accountancy Scheme Syllabus

STUDENTS MANUAL
STUDENTS MANUAL
Chartered Accountancy
Professional Scheme & Syllabus
Effective From 1st December 2007
Education Department
The Institute of Chartered Accountants of Nepal
Babar Mahal, Kathmandu
Chartered Accountancy Professional Scheme & Syllabus

Publisher :

Babar Mahal, P.O.Box: 5289, Kathmandu
Tel: +977-1-4269130, 4258569, Fax: +977-1-4258568
Email: ican@ntc.net.np, Website: www.ican.org.np
Price
Rs. 350/-
First Edition
July, 2007
Second Edition
January, 2010
Designed & Printing
Print and Art Service

Putalisadak, Kathmandu
Tel: 01-4244419
No part of this publication may be translated, reprinted, reproduced or utilized in any form
either in whole or in part or by any electronic or other means, including photocopying, recording
or in any information storages and retrieval system, without prior permission in writing from
the publisher.
No responsibility for loss occasioned to any person acting or refraining from action as a
result of any material in this publication can be accepted by the publisher.
The Institute of Chartered

Accountants of Nepal
(ICAN)
aims to be recognized as a
respected and highly
professional accounting body,
providing leadership on
standards,
education and
self-regulation
in Nepal.
Foreword to Second Edition

Institute of Chartered Accountants of Nepal, a statutory organization set up by an Act of
Parliament has a great responsibility to regulate the accountance profession and produce
qualified and deserving accountants to provide accountng, auditing, consulting services
to corporate arena and contributes a lot for the economic development of the country.
This manual is useful as guidelines to those who are interested about Chartered Accountancy
education and want to make their career in accounting field. More importantly, this
manual covers the areas such as chartered accountancy educatiion and scheme, procedural
requirement, registration, examinations, practical training including industrial training,
detailed syllabus, various forms and reporting requirement of articleship training etc. In
fact, chartered accountancy education scheme and syllabus are structured to prepare
candidates to face those challenges in the emerging business environment.
The issue of uniform curricula of Chartered Accountancy education in South Asian Region
has already been developed and our syllabus is fully compatible with the common
minimum curriculum as set by the SAFA Board. The present syllabus which is based on
the IEG-9 Guidelines of the International Federation of Accountants (IFAC) has already
been operative from 1 December 2007. Students of CAP-I & CAP-II have already written
their examinations from June 2009. To make compatible with the common minimum
syllabus as set by the SAFA, we have added certain chapters and contents in certain
subjects of the existing syllabus. The Council is committed to review the syllabus from
time to time to keep abreast with changing reuqirements to face the challenges posed
by the changing global and national economic scenarios. This manual gives some reviewed
modular structure of the CAP-I, CAP-II and CAP-III level of CA education.
I sincerely believe, this manual would provide requisite guidance to the students and
others who are keen interest in accountancy profession in easier understanding and
compliance with the requirements thereon. Finally I wish to put on record my sincere
appreciation to the members of the Education Committee and contributions made by Mr.
Paramananda Adhikari, FCA Technical Director of the Institute for their untiring effort
to review the contents of the syllabus and other relevant information.
Suvod K. Karn, FCA

January, 2010
President
Foreword to First Edition

The Institute of Chartered Accountants of Nepal (ICAN) has the responsibility to
produce qualified, deserving human resources with high potential to provide technical
as well as management expertise to the development of nation. Thus, the Institute is
devoted to be a part of professional academic Institute of the country.
Students often make several queries seeking detailed information, career prospectus,
duration, cost and other matters relating to the Chartered Accountancy course.
Moreover, these issues were raised even during the 64th SAFA Assembly held in
Colombo in January 2007. The issue of uniform curricula of Chartered Accountancy
education in the South Asian Region was also raised in the Assembly.
The Council has decided to bring out the Students Manual as guideline to those
who are interested for Chartered Accountancy education and want to pursue a career
in this field. The Manual broadly covers various provisions and procedures relating
to the education, cost, practical training scheme, syllabus etc.
Chartered Accountancy education scheme is structured to prepare candidates to
face the challenges posed by the changing global scenarios and the Chartered
Accountants must be equipped to face these challenges. The Council, therefore,
had introduced education and training scheme of Chartered Accountancy Course
from circa 2000. The education scheme was reviewed and revised from time to time
to keep abreast with changing requirements. This manual contains the new syllabus
of CA education, in detailed.
I hope that the manual would provide requisite guidance to the students in easier
understanding and compliance with the requirements for Chartered Accountancy
Education.
I must express my gratitude to the members of the Education Committee and its
Chairman, Mr. Tirtha Raj Upadhyay, FCA for their valuable inputs to bring out this
Manual.
The contributions made by Mr. Paramananda Adhikari, Joint Director of the Institute
also deserve acknowledgement.
Binod B. Rajbhandary, FCA
Kathmandu
16 July 2007.
President
Preface
The Nepal Chartered Accountants Regulations, 2004 contain interalia, various
provisions relating to Chartered Accountancy education such as registration,
examination, practical training scheme etc.
In the absence of a comprehensive guideline on the requirement of various
rules and regulations for pursuing Chartered Accountancy course, the students
often face difficulty in understanding facts about CA education, admission
procedure and other details.
This Manual provides detailed procedural guidelines and requirement of
pursuing the Chartered Accountancy course.
I sincerely believe that this Manual will be helpful to present and prospective
students pursuing Chartered Accountancy course and other persons interested
as well in the accounting profession thereby promoting the Chartered
Accountancy education
I wish to thank the members of the Education Committee and staffs of the
Institute, specially Mr. Paramananda Adhikari, Joint Director, for their effort in
developing and bringing out this Manual.
Kathmandu
16 July 2007
Tirtha Raj Upadhyaya, FCA

Chairman
Education Committee
CONTENT
1.
About The Institute
2.
Chartered Accountancy as a Profession
3.
Levels in Chartered Accountancy Course
4.
Chartered Accountancy Professional (CAP)-I/Foundation Level
4.1 Eligibility for Registration to Foundation Level
4.2 Provisional Registration
4.3 Course Contents
4.4 Eligibility for Appearing in Foundation Examination
4.5 Examinations
5. Chartered Accountancy Professional (CAP)-II/Intermediate Level
6.
7.
5.1 Eligibility for Registration in Intermediate Level
5.2 Registration Procedures
5.3 Course Contents
5.4 Eligibility Test Scheme
5.5 Examinations
10
Chartered Accountancy Professional (CAP)-III/Final Level
12
6.1 Eligibility for Registration to Final Level
12
12
6.3 Course Contents
13
6.4 Eligibility Test Scheme
13
6.5 Examinations
14
Practical Training
16
7.1 Members Entitled to Train Articled Trainees
16
7.2 Stipend to Articled Trainees
17
7.3 Additional Articled Trainee
17
7.4 Industrial Training
17
7.5 Exchange of Articled Trainee
18
7.6 Termination of Deed of Articleship
18
7.7 Notifying the Principals Position
18
7.8 Record of Trainees
19
7.9 Leave to an Articled Trainee
19
7.10 Working Hours of Articled Trainees
19
7.11 Action Against Misconduct by The Principal and Articled Trainees
19
7.12 Action Against Principal
19
7.13 Issue of Certificate of Completion of Articleship
20
7.14 Prohibition to Receive Financial Benefit from Articled Trainees
20
8.
Annexures
Annexure-1 Detailed Syllabus of Chartered Accountancy Professional (CAP)-I
23
Paper 1: Fundamentals of Accounting
23
Paper 2: Fundamentals of Economics
25
Paper 3: Business Communication
28
Paper 4: Mathematics & Statistics
29
Paper 5: Management and Organizational Relations
33
Paper 6: Fundamentals of Information Technology
36
Annexure-2 Detailed Syllabus of Chartered Accountancy Professional (CAP)-II
38
Paper 1: Advanced Accounting
38
Paper 2: Audit and Assurance
40
Paper 3: Corporate & Other Laws
43
Paper 4: Financial Management
46
Paper 5: Cost and Management Accounting
47
Paper 6: Business Communication & Marketing
50
Paper 7: Income Tax & Vat
54
Annexure-3 Detailed Syllabus of Chartered Accountancy Professional (CAP)-III
59
Paper 1: Advanced Financial Reporting
59
Paper 2: Advanced Financial Management
61
Paper 3: Advanced Audit and Assurance
63
Paper 4: Corporate Laws
66
Paper 5: Management Information and Control System
70
Paper 6: Advanced Taxation
73
Paper 7: Advanced Cost and Management Accounting
77
Paper 8 : Strategic Management and Decision Making Analysis
81
Annexure- 4 Application for Registration in CAP-I/Foundation Level
83
Annexure- 5 Application for Registration in CAP-II/Intermediate Level
84
Annexure- 6 Application for Registration in CAP-III/Final Level
85
Annexure- 7 Deed of Articleship
86
Annexure- 8 Certificate of Service on Discontinuance or Termination of Articleship
89
Annexure- 9 Report of Non Compliance of Articled Training
90
Annexure- 10 Record of Assignment
91
Annexure- 11 Report of Practical Training
92
Annexure- 12 Certificate of Service Under Articles
93
Annexure- 13 Letter of Completion of Articleship Training
94
Annexure- 14 Eligibility Certificate
95
Students Manual 2010
1.
ABOUT THE INSTITUTE
The Institute of Chartered Accountants of Nepal (ICAN) was established under a special Act, The Nepal
Chartered Accountants Act, 1997 to enhance social recognition and faith of people at large in the accounting
profession by raising public awareness towards the importance of accounting profession as well as towards
economic and social responsibility of the accountants, and to contribute towards economic development
of the country. The Institute is an autonomous body and the Council is fully authorized by the Act to undertake
accountancy profession in Nepal.
Objectives
The Institute has full responsibility to regulate, develop and promote the accounting profession in Nepal.
The Institute as part of its quality education, enrolls students for the Chartered Accountancy (CA) course,
imparts theoretical education to them, requires the students of CA course to undergo practical training and
monitors effectiveness of their training programs. It also holds qualifying examination for them and grants
membership to successful candidates and certificate of practice to the members intending to practice the
accounting profession. The Institute also supports the government with constructive suggestions towards
formulation and revision of legislations relating to trade, commerce, accounting, revenue, etc. and helps
support the economic development process of the country by increasing the confidence among investors
and general public at large towards the capital market by pronouncing the standards of disclosures in
financial reporting practices.
Governing Body
The Institute is governed by a council in accordance with the provisions of the Chartered Accountants Act,
1997. It consists of 17 members of whom 10 are elected from among the Chartered Accountant members,
4 elected from among the Registered Auditor members, and the remaining 3 nominated by the Government
of Nepal on the recommendation of the Auditor General. The Council is fully autonomous and has right to
regulate accountancy profession in the country. The Council is also empowered to constitute Standing and
Non-Standing Committees for the attainment of the objectives of the Institute.
The Regulations and Bye-Laws

The activities of the Institute are administered under the Nepal Chartered Accountants Regulation, 2004
and Nepal Chartered Accountants (Finance and Administration) Bye-Laws, 2001. In addition, the Council
also lays down procedures for regulating activities not covered by the regulation.
About the Institute
2. CHARTERED ACCOUNTANCY AS A PROFESSION

Chartered Accountancy is a prestigious and rewarding profession in the society. It is a challenging career
that imparts the best of technical skills in financial and management areas. Chartered Accountants today
hold top management positions in public as well as private sector enterprises. They also render professional
services as accountants and management consultants to various private and public sector organizations.
Rapid changes in economy and globalization have further opened opportunities to the Chartered Accountants
for many challenging and rewarding career development options.
In the changing global context, roles and responsibilities of chartered accountants are not confined to
performing mere traditional duties in the fields of Auditing, Accounting, Taxation, etc. They are now expected
to have a greater understanding of and experience in the fields of business finance, information technology,
corporate management, etc. Therefore, the business managers of today must have adequate managerial
skills in decision making, problem solving and in ensuring effective communication in organizations.
Professional expertise and skills in these subjects, therefore, constitute the indispensable parts of the
CA Education. To this end, our CA education system is designed with appropriate syllabi framed to
cater to the learning needs of the students facing development challenges in all national as well as
global fronts.
Chartered Accountancy as a Profession
3. LEVELS IN CHARTERED ACCOUNTANCY COURSE

There are two ways of admission procedures for access into the Chartered Accountancy course. The first
one is an entry into the Chartered Accountancy Professional (CAP) I/Foundation Level course, which is
designed in the pattern of entry level test of the students. Students who have not fulfilled all the criteria
necessary for direct entry access into the Chartered Accountancy Professional (CAP) II course. The second
one is direct admission into the Chartered Accountancy Professional (CAP) II course, i.e. Intermediate Level
course. This is meant for those, who have met all the necessary requirements for admission in the Intermediate
Level course. Chartered Accountancy course classified into three levels. They are:
(i)
Chartered Accountancy Professional (CAP) I /Foundation Level
(ii)
Chartered Accountancy Professional (CAP) II/Intermediate Level
(iii) Chartered Accountancy Professional (CAP) III/ Final Level
THE PATH OF CA EDUCATION
10+2/PCL or Graduates/
Post Graduates scoring
less than 50% marks
Graduates/Post Graduates
with Minimum Required
Marks
Entry for CA Professional

Course
1 Year CAP I/Foundation
CAP II/Intermediate Level
3 Years Articleship under

Practising Chartered
Accountant / or
Industrial Training
CAP III/Final Level
Apply for Membership
Levels in Chartered Accountancy Course
4.
CHARTERED ACCOUNTANCY
PROFESSIONAL (CAP)-I/FOUNDATION LEVEL
This is an entry level test for Chartered Accountancy Course. The duration of CAP-I/Foundation Course
is one year. The course has been designed to provide students basic knowledge and skills as part of the
entry standard for the professional level.
4.1 Eligibility for Registration to CAP-I/Foundation Level
The following students are eligible to register for the Foundation course:
i.
Students completing the higher secondary (10+2) or certificate level examination from
recognized academic institutions,
ii.
Graduates or Post Graduates who have scored less than 50% in Commerce and/ or less than
60% in any faculty other than Commerce, but remaining ineligible to register directly for the
Intermediate Course.
Note:
Higher secondary or certificate level course means higher secondary or certificate level course/s
recognized by the Government except subjects like song, music, fine arts, dance, language, literature,
culture, etc.
Graduate /Post Graduate stands for Graduation/Post Graduation courses recognized by the
Government except subjects like song, music, fine arts, dance, language, literature, culture etc.
Where a candidate has passed the examination under grading system, he should have scored grades
equivalent to the percentage marks as mentioned above.
4.2 Provisional Registration
Candidates who have appeared in 10+2 or equivalent examinations may also register provisionally
for the CAP-I/Foundation Course. However, such provisional registration shall be confirmed only after
satisfactory proof of having passed the said examination within a period of six months from the date
of provisional registration.
Failure to comply with this shall result in the cancellation of provisional registration. Fees paid for
provisional registration shall not be refunded.
Procedure for Registration
Registration for the CAP-I/Foundation Course is open throughout the year. Prescribed application form
for registration is given in Annexure 4.
Examination is held twice a year - one in June and the other in December. For appearing in the June
examination registration should be done on or before the end of May and on or before end of
November for the December examination.
The candidate must fill up the application form along with the following documents, duly attested by
any gazetted officer or ICANs Officers, and submit it to the Institute:
Copy of Marksheet / Transcript etc. starting from SLC

Copy of Citizenship Certificate / Passport
Copy of Character Certificate
Receipt of Fee Paid.
CAP-I/Foundation Level
Fee Structure
Registration fee for CAP-I/Foundation course is Rs. 25,000/- to be paid at the time of registration along
with other applicable fees. However, the registration fee can also be paid on installments. Accordingly,
Rs. 12,500/- shall be paid at the time of registration and balance amount shall be paid within 30th
November for the students registered till 31st May and within 31st May of the next year for the
students to be registered till 30th November. The registration fee shall not be refundable and includes
cost of Institutes Study Material, Pre-test exam, Institutes Newsletter and Institutes Journal.
4.3 Course Contents
The CAP-I/Foundation Course consists of six papers, each carrying 100 marks and divided into two
groups:
Group I
PAPER 1
Fundamentals of Accounting
PAPER 2
Fundamentals of Economics
PAPER 3
Business Communication
PAPER 4
Mathematics and Statistics
PAPER 5
Management & Organizational Relations
PAPER 6
Fundamentals of Information Technology
Group II
Detailed courses of study are given in Annexure-1.

Study Materials
On receipt of application for registration along with the prescribed fee, study materials shall be issued
to the students.
Library Facility
Students can enjoy all library facilities including professional books and other reference materials.
Students are required to use their Identity Cards issued by the Institute for access into the library.
4.4 Eligibility for Appearing in CAP-I/Foundation Examination
For appearing in the CAP-I/Foundation examination students should complete the pre-test exams i.e.
both in Postal and Hall. The students should pass in at least two papers of each subject i.e. minimum
one from postal test and one from hall test or at least two from hall test papers in each subject and must
secure a minimum of 40% marks in each paper.
(a) Postal Tests Scheme
Under this scheme students are provided with a set of test papers at the time of registration.
Students are required to solve the test papers at home under the examination conditions and
submit them to the Institute. These test papers can be submitted personally or by post. A
student is allowed to submit two papers of each subject free of cost. However, if any student
wishes to attempt more than two test papers, he/she will be charged Rs. 150 per paper .If any
student has submitted more than one answer paper, the paper with the highest score shall be
recorded at the Institutes documentation section.
Postal tests, if found copied from others works/writings shall be considered invalid and no marks shall
be awarded to such answers.
(b) Hall Tests Scheme

Under this scheme, tests are taken in an examination hall. The Institute shall fix center for such
tests, necessary number of invigilators with timing of examination. Normally, tests are held
each Saturday. A student can sit for Hall Tests as many times as he wishes but only two
sittings per subject shall be allowed free of cost. Extra sittings shall be charged at Rs. 150/per paper. A student who registers his name but fails to appear on the scheduled date shall be
considered as having appeared for the test but marked as absent.
A student should register his/her name for Hall Test at least a week before the test. Each sitting of
the examination shall be of 3 hours.
Eligibility Certificate
After successful completion of Pre-test exam scheme, eligibility certificate shall be issued to the
student. A student shall get eligibility certificate at least two months ahead of examination date. The
tests are conducted till the end of July for the students appearing in the December Examination and
till the end of January for the students appearing in the June Examination. A prescribed eligibility
certificate is given in Annexure 14.
A student must get eligibility certificate within three years from the date of registration, subject to
cancellation in case of failure to obtain eligibility certificate. However such student can re-register
as de-novo.
A student who registered provisionally and has not submitted the required documents as well as
not paid second installment within the prescribed period, he may not be eligible to appear in
CAP-I/Foundation examination.
4.5 Examinations
The CAP-I/Foundation Examinations are held twice a year, one in June and the other in December. A
candidate can appear in the Examination, provided he/she has:
i)
Completed one year of study from the date of registration, and
ii) Obtained eligibility certificate.

The candidate should pass the Eligibility Test within 3 years from the date of registration. If a
candidate fails to complete the test examinations within the stipulated duration, his/her registration
shall be cancelled on expiry of three years from the date of registration.
The medium of writing the examinations shall be Nepali or English as decided by the Council.
It must be noted that a student must clear the Foundation Examination within five years from the
date of registration, irrespective of the date of getting the eligibility certificate. If a student fails to
complete examinations within the stipulated duration, his/her registration shall be cancelled on expiry
of five years from the date of his registration. However, such a student can re-register as de-novo.
Examination Notices and Fees
Students eligible to appear in the examination shall have to submit examination form within the
timetable announced by the Institute. Generally, for appearing in the June examination, the form
should be submitted on or before the end of April and by the end of October for the December
examination. Notice regarding the examination will be published in newspapers, Institutes Journal,
Notice Board of the Institute and Institutes Web-Site.
Examination Fees :
Form fee
Rs 100/-
Exam fee / Paper
Rs 500/-
Late fee
Rs 500/-
Duplicate admit card fee
Rs 100/-
Retotaling of marks/Paper
Rs 200/-
Duplicate mark-sheet fee
Rs 200/-
Results
A candidate shall be declared passed in the CAP-I/Foundation Examination only if he passes

in both the groups.
A candidate shall be declared passed in both groups simultaneously if he secures at one

sitting :
i)
a minimum of 40 % marks in each paper of each of the groups with an aggregate of 50 % of

all the papers of each of the groups
OR
ii) a minimum of 40 % in each paper of both the groups and 50 % in aggregate of all the papers
of both groups taken together.
A candidate shall be declared passed in one group if he/she secures, at one attempt, a
minimum of 40 % marks in each paper of the group and 50 % in aggregate of all the papers
of that group.
Exemption
There is no exemption facility in CAP-I/Foundation Level.
Distinction
A student scoring 75 % or above in aggregate shall be considered to have secured distinction.
Verification of Marks
A candidate may apply, with requisite fees to the Institute, for verification of marks in any paper (s)
within a period of 30 days from the date of publication of examination results. However, re-evaluation
of the answers not permissible.
5.
CHARTERED ACCOUNTANCY PROFESSIONAL

(CAP)-II/INTERMEDIATE LEVEL
CAP-II/Intermediate Level course is basically designed with an aim of providing students with requisite
knowledge and skills in the subject.
5.1 Eligibility for Registration in CAP-II/Intermediate Level
A person in order to join the CAP-II/Intermediate Level should,
i)
ii)
pass the CAP-I/Foundation Course Examination, or

be a Graduate or Post Graduate in Commerce, Business Administration or Management having
secured a minimum of 50 % aggregate marks, or
iii)
be a Graduate or Post Graduate other than (ii) above with a minimum of 60% aggregate
marks.
Note:
Graduate/Post Graduate stands for Graduate/Post Graduate recognized by the government except
subjects like Music, Fine Arts, Dance, Language, Literature, Culture etc.
Students who have passed examination under grading system, should provide evidence that his/her
grades are equivalent to the percentage marks as mentioned in (ii) and (iii) above.
Registration in CAP-II/Intermediate Course is open throughout the year. Sample application form for
registration is given in Annexure 5. The duration of Intermediate course is one year.
Examinations are held twice a year: one in June and the other in December. For appearing in the
June examination, registration should be done on or before the end of May of the previous year, and
on or before the end of November of the previous year for the December examination.
Candidates must fill up the application form along with the following documents, duly attested by
any gazetted officer or ICANs Officer and submits them to the Institute:
Copy of Marksheet / Transcript starting from SLC

Copy of Citizenship Certificate / Passport
Copy of Character Certificate
Receipt of fee paid.
Provisional Registration
Candidates who have appeared in the final year of graduation or post graduation examination can
register provisionally for Intermediate Level. However, such provisional registration shall be confirmed
only upon proof of having passed the aforesaid examination with minimum marks furnished within a
period of 6 months from the date of provisional registration.
Failure to comply with this condition is subject to cancellation of provisional registration. The fees
paid on provisional registration shall not be refunded.
CAP-II/Intermediate Level
Fee Structure
Registration fee for the CAP-II/Intermediate Level is Rs. 30,000/-. It can be paid in full at the time
of registration along with other applicable fees. However, the registration fee can also be paid on installment
basis. Accordingly, Rs. 15,000/- shall be paid at the time of registration and the balance amount to
be paid within 30th November for the students registered till 31st May and up to 31st May of the next
year for the students registered till 30th November. The registration fee is not refundable and this
includes the cost of Institutes study materials, pre-test exam , Institutes Newsletter and Institutes
Journal.
5.3
Course Contents
The CAP-II/Intermediate Course consists of Seven papers. Each paper carries,100 Marks and is
divided into two groups:
GROUP I
PAPER 1 : Advance Accounting
PAPER 2 : Audit & Assurance
PAPER 3 : Corporate & Other Laws
GROUP II
PAPER 4 : Financial Management
PAPER 5 : Cost & Management Accounting
PAPER 6 : Business Communication & Marketing
PAPER 7 : Income Tax & VAT
Study Materials
On receipt of application for registration along with the prescribed fee, study materials will be issued
to the student.
Library Facility
Students can have access to the library including professional books and other reference materials.
Students should produce the Institute-issued ID Card for use of library facilities.
5.4
Eligibility Test Scheme

For appearing in the examination students should complete the Pre- test exams -both Postal and
Hall. Students should pass in at least two papers of each subject with a minimum of one from each
postal and hall test or at least two from hall test papers in each subject and must secure minimum
of 40% marks in each paper.
(a) Postal Tests Scheme
Under this scheme, students are provided a set of test papers at the time of registration. Students
are required to solve the test papers at home under examination conditions and submit them
to the Institute. These test papers can be submitted personally or by post. A student is allowed
to submit two papers of each subject free of cost. However, students wishing to attempt more
than two test papers shall be charged an additional Rs.150/- per paper. If any student has
submitted more than one answer paper, the paper with the highest score shall be recorded.
Postal test contents found copied from others work shall be considered invalid and shall not
be awarded.
(b) Hall Tests Scheme

Under this scheme, tests are taken in an examination hall. The Institute shall fix center/s for
such tests, requisite number of invigilators and timing of tests. Normally, tests are held each
Saturday. A student can sit for Hall Tests as many times as he wishes, but only two sittings
per subject shall be allowed free of cost. Extra sittings shall be charged at Rs 150/- per paper.
A student registered for a test, if fails to appear on the scheduled date, shall be considered
absent.
A student should register his name for Hall Test at least a week ahead of the test. Each sitting of the
examination shall be of 3 hours.
After successful completion of Pre-test scheme, an eligibility certificate shall be issued to the student.
A student shall get eligibility certificate at least two months ahead of examination date. The tests are
conducted till the end of July for the students appearing in the December Examination and till the
end of January for the students appearing in the June Examination. A prescribed eligibility certificate
is given in Annexure - 14.
A student must get eligibility certificate within 3 years from the date of registration. Failure to do this
is subject to cancellation of registration. However, such a student can re-register with the Institute
as de-novo.
A student who registered provisionally and has not submitted the required documents as well as
not paid second installment within the prescribed period, he may not be eligible to appear in
CAP-II/Intermediate examination.
5.5
Examinations
Examinations are held twice a year, one in June and the other in December. A candidate can appear
for the CAP-II/Intermediate Examination after one year from the date of registration and after obtaining
eligibility certificate (EC) of pre-test exam. The candidate should pass the Eligibility Test within 3 years
from the date of registration. If a candidate fails to complete the test examinations within the stipulated
duration, his/her registration shall be cancelled on expiry of three years from the date of registration.
The medium of examination will be Nepali or English as decided by the Council.
It must be noted that a student must pass CAP-II/Intermediate examination within five years from the
date of registration. If a student fails to pass the qualifying examinations within the stipulated duration,
his/her registration shall be cancelled at the expiry of five years from the date of registration.
However, such a student can re-register as de-novo.
A candidate can appear either in both groups or in any of the group at a time.
Students eligible to appear in the examinations shall have to submit an examination form within the
dates announced by the Institute. For appearing in the June examination, the form should be submitted
on or before the end of April and end of October for the December examination. All examination
notices shall be published in newspapers, Institutes Journal, Notice Board of the Institute and
Institutes Web-Site.
10
The fees for the Examination are as follows:

Form fee
Exam fee / Paper
Late fee
Retotaling of marks/Paper
Duplicate mark-sheet fee
Rs 100/Rs 700/Rs 500/Rs 100/Rs 200/Rs 200/-
Results
A candidate will be declared to have passed CAP-II/Intermediate Examination only if he passes in
both the groups.
A candidate will be declared to have passed in both groups simultaneously if he secures at one
sitting:
i)
a minimum of 40% in each paper of each of the group and an aggregate of 50% of all the
papers of each of the groups
OR
ii)
a minimum of 40% in each paper of both the groups and 50% in the aggregate of all the papers
of both groups taken together.
A candidate shall be declared to have passed in one group if he secures at one attempt a minimum
of 40 % in each paper of the group and 50% in the aggregate of all the papers of that group.
Exemption
A student who has scored 60% or more in any paper(s) but has failed in that group, shall be entitled
for exemption in that particular paper(s), provided, he has scored a minimum of 30% in any one of
the subjects of that group, and should have attempted all the papers in that group.
The exemption shall remain valid for the next three consecutive examinations but those students
who are entitled for exemption are not considered for rank.
Distinction
A student scoring 75% or above, in the aggregate of both groups, at one sitting, shall be considered
to have secured distinction.
A candidate may apply to the Institute within a period of thirty days from the date of declaration of
results of the examination accompanied with the requisite fees for verification of marks in any paper(s).
However, re-evaluation of the answers is not permissible.
11
6.
CHARTERED ACCOUNTANCY
PROFESSIONAL (CAP)-III/FINAL LEVEL
This CAP-III/Final Level course along with the practical training is basically designed to give the students
a deeper insight into advanced level of professional expertise and skills . During the CAP-III/Final Level
course, students should undergo paid articleship training for the period of three years under a practicing
Chartered Accountant.
6.1
Eligibility for Registration to CAP-III/Final Level

Eligibility Criteria
To enroll in the CAP-III/Final Level, a candidate must have:
i.
passed both groups of CAP-II/Intermediate Level Examinations
ii. registered as an articled trainee under a practicing Chartered Accountant by signing an Articleship
Deed. It must however be noted that the Articleship Deed must be registered with the Institute
within one month from the date of signing the Deed.
6.2
Registration Procedures
1.
An application form shall be duly filled up. (The form is given in Annexure 6).
2. Entered into a contract of articleship with a Chartered Accountant Member in practice to serve
as an articled trainee for practical training. The Form of the Articleship Deed is given in
Annexure 7.
3. The Articleship Deed shall be duly filled and signed both by the Principal and the Articled
Trainee along with the following attested documents and submits to the Institute for registration
as an articled trainee.
Copy of Mark Sheet of CAP-II/Intermediate Examinations

Copy of Certificate of CAP-II/Intermediate Examinations
Receipt of Fee paid.
Duration of practical training

An articled trainee should undergo and complete a practical training for a period of three years.
In order to gain practical experience, the articled trainee, at his discretion, may serve as a industrial
trainee in any of the financial, commercial or industrial undertakings for a period not exceeding
one year.
Special Consideration for Registered Auditor (RA) Members of the Institute
A Registered Auditor Member, who fulfills the conditions prescribed by the Council, may be exempted
from undergoing articleship training for a maximum period upto two years.
Fee Structure
Registration fee for the CAP-III/Final Course is Rs. 30,000. It can be paid in full at the time of
registration along with other payable fees. However, the registration fee can also be paid on installment
basis. Accordingly, Rs. 15,000 shall be paid at the time of registration and balance amount within
one year from the date of registration in CAP-III/Final Level. The registration fee is not refundable
and this includes cost of Institutes study materials, pre-test exam paper, Institutes newsletters and
journals.
CAP-III/Final Level
12
6.3
Course Contents
The CAP-III/Final Course consists of eight papers. Each paper shall carry 100 marks and is divided
into two groups:
GROUP I
PAPER 1
Advanced Financial Reporting
PAPER 2
Advanced Financial Management
PAPER 3
Advanced Audit & Assurance
PAPER 4
Corporate Laws
PAPER 5
Management Information & Control System
PAPER 6
Advanced Taxation
PAPER 7
Advanced Cost & Management Accounting
PAPER 8
Strategic Management & Decision Making Analysis
GROUP II

Study Material
With the completion of application, registration and payment of registration fee, students shall be
entitled to receive study materials.
Library Facility
A modern library equipped with standard professional books and adequate reading and reference
materials is an added attraction of the Institute. A student must produce his/her Identity Card for
access into the library.
6.4
Eligibility Test Scheme

For appearing in the examination students should complete the Pre-test exam i.e. Hall Test only. The
students should pass at least one paper of each subject and must secure a minimum of 40% mark
in each paper.
Hall Test Scheme
Students registered in Chartered Accountancy CAP-III/Final Level, only hall tests are taken in an
examination hall. The Institute shall waive the hall test scheme and provides Postal Test Scheme to
the student who produce letter from his/her principal that he/she is outstation for practical training.
The Institute shall fix center/s for such tests, necessary number of invisilators with timing of tests.
Normally, tests are held each Saturday. A student can sit for Hall tests as many times as he wishes
but only two sitting per subject shall be allowed free of cost. Extra sittings shall be charged at Rs 150
per paper. A student who registers his name but fails to appear on the scheduled date shall be counted
as having appeared for the test and shall be marked as absent.
A student should register his name for Hall Test one week prior to the test date. Each sitting of the
examination shall be of 3 hours.
13
CAP-III/Final Level
After successful completion of Pre-tests exam, an eligibility certificate shall be issued to the student.
A student shall get eligibility certificate at least two months ahead of examination date.Tests are
conducted till the end of July for the students appearing in the December Examination and till the
end of January for the students appearing in the June Examination. A prescribed eligibility certificate
is given in Annexure- 4.
6.5
Examinations
Examinations are held twice a year: one in June and the other in December. A candidate appearing
in the CAP-III/Final Examination must have:
i) Completed two years from the date of registration in CAP-III/Final Course,
ii) Obtained the eligibility certificate of pre-test exam, and
iii) Completed the prescribed period of practical training, i.e. 3 years or has yet to serve not more
than 12 months of articleship prior to the first day of the month in which Examination is held.
A candidate can appear either in both groups of tests simultaneously or in one group in one
examination and in the other group at any subsequent examination.
Students eligible to appear in the examinations shall have to submit an examination form within the
dates announced by the Institute. For appearing in the June examination, the form should be submitted
on or before the end of April and examination by end of October for the December examination.
Notice regarding the examination will be published in newspapers, Institutes Journal, Notice Board
of the Institute and Institutes Web-Site.
The examination fees shall be as follows:
Form fee
Exam fee/Paper
Late fee
Re-totaling fee
Rs 100/Rs 1,000/Rs 500/Rs 100/Rs 200/ -
Duplicate mark sheet fee
Rs 200/-
Results
A candidate shall be declared to have passed the CAP-III/Final Examination only if he passes in both
the groups.
A candidate shall be declared to have passed in both groups simultaneously if he secures at one
sitting:
i.
A minimum of 40 % marks in each paper of each of the group and an aggregate of 50 % marks
of all the papers of each of the groups
OR
ii.
A minimum of 40 % marks in each paper of both the groups and 50 % in the aggregate of all the
papers of both groups taken together.
CAP-III/Final Level
14
Exemption
A student who has scored 60 % or more in any paper (s) but has failed in that group, shall be entitled
for exemption in that particular paper (s), provided, he has scored a minimum of 30 % in any one of
the subject of that group, and should have attempted all the papers in that group.
The exemption shall remain valid for the next three consecutive examinations but those students
who are entitled for exemption shall not be considered for rank.
Distinction
A student scoring 75 % or above, in the aggregate of both groups, at one sitting, shall be considered
to have secured distinction.
A candidate may apply to the Institute within a period of 30 days from the date of publication of
examination results accompanied with the requisite fees for verification of marks in any paper(s).
However, re-evaluation of the answers is not permissible.
15
CAP-III/Final Level
7.
PRACTICAL TRAINING
In Chartered Accountancy Education, practical training is instrumental in shaping accountancy as a well

founded and highly dignified profession exposing the students to adequate knowledge of accounting,
auditing, taxation, information technology, system design etc. It also ensures job opportunities for striving
and thriving students devoted to accountancy as a prestigeous profession for the overall development of
the country. Here, the students can make the best use of the practical training period working with a
practicing chartered accountant member. They can also work as an industrial trainees in financial, commercial
or industrial undertakings. The period of such Industrial training may not be more than a year.
7.1
Members Entitled to train Articled Trainees

i.
Only those Chartered Accountants members, who have obtained the Certificate of Practice as
per Rule 49 of the Nepal Chartered Accountants Regulation 2004, are entitled to train articled
trainees.
ii.
A Chartered Accountant member, herein after referred to as Principal also shall be entitled to
train articled trainee provided he:
Under the above provisions, the date of commencement of the practice shall be calculated from
the date of issue of Certificate of Practice as per the Rule 49 of the Nepal Chartered Accountants
Regulation 2004.
Training requirements
Number of trainees
(a) has been in continuous practice for a period of at
2 Articled Trainees
least 3 years
(b)
has been in continuous practice for a period of at
4 Articled Trainees
least 5 years
(c) has been in continuous practice for a period of at
5 Articled Trainees
least 7 years
(d) has been in continuous practice for a period of at
6 Articled Trainees
least 10 years
(e) has been in continuous practice for a period of at
7 Articled Trainees
least 15 years or more
iii.
A Chartered Accountant member, who has not completed three years practice, shall be entitled
to train one articled trainee, if he is a partner in a firm of chartered accountants which has at
least one partner entitled to train one or more articled trainees.
iv.
A Chartered Accountant member, who has taken up practice as his main occupation after having
been engaged in other occupation, shall be considered to have been in practice as follows:
Practical Training
16
Number of Years Engaged

in Occupation
7.2
Number of Years of Deemed

Equivalent Practice
Three Years
One Year
Five years
Three Years
Eight or more years
Five Years
Stipend to Articled Trainees

Every principal who engaged the Articled Trainee for practical training, shall pay to the Trainee a
minimum monthly stipend at the rates specified below:
7.3
1st Year
NRs. 3,000
2nd Year
NRs. 4,000
3rd Year
NRs. 5,000
Additional Articled Trainee

A Chartered Accountant member can engage an additional articled trainee in training activity/
programm, subject to the following conditions:
(a)
an additional training period needed by a Chartered Accountant member holding Certificate of

Practice from a foreign accounting firm whose training period is not equivalent to the required
period or standards in accordance with Nepal Chartered Accountants Regulation, 2004.
(b)
remaining training period needed to be attended by an articled trainee from the date of death of
the principal or his termination by the Institute or his giving up accountancy profession
(c)
for the remaining period needed to attain because of abruption due to the situations as stated in
sub-rule (2) of rule 12, sub-rule (3) of rule 36 or sub-rule (3) of rule 37 of the Nepal Chartered
Accountants Regulation 2004.
7.4
Industrial Training
(i)
In order to gain practical experience, an article trainee may serve in a particular industry as part
of the practical training activity for a period not exceeding one year.
(ii)
The industrial training shall be received under the guidance of a Chartered Accountant member
of the Institute engaged in such an organization. This is subject to prior approval from the industrial
organization to be served or such principal. The following are some of the list of organizations
which an articled trainee may serve during the period of practical training
a.
The Office of Auditor General,
b.
Nepal Rastra Bank,
c.
Commercial bank/s or Financial Institutions incorporated under the prevailing laws
d.
Fully or partially owned Governments undertaking,
e.
Insurance companies,
f.
Any Public Company whose paid up capital is not less than Rupees fifty million
g.
Any other Institution or Organization approved by the ICAN Council.
17
Practical Training
(iii)
Industry shall be responsible for paying stipend to the trainee as per Rule 27 of Nepal Chartered
Accountants Regulation 2004. However, a higher stipend than prescribed can be paid to the
articled trainee.
(iv) The period of industrial training shall be as calculated by the Institute under Rule 24 of Nepal
Chartered Accountants Regulation 2004.
(v)
A Chartered Accountant is eligible to take up two Industrial trainee at a time.
(vi) Leave taken by the trainee during the period of industrial training shall be adjusted within the
total leave granted to him during three years period of training.
(vii) An articled trainee desirous to join industrial training shall have to fulfill the following conditions.
The articled trainee :
7.5
a.
must have enrolled in Chartered Accountancy CAP-III/Final Course.
b.
must have served at least two years as an articled trainee prior to commencement of the
industrial training.
c.
shall convey to his principal his intention of taking the training at least one month before
the date of commencement of the training program. Approval of the Council must be
obtained where a student wishes to undergo industrial training under a foreign principal.
Exchange of Articled Trainee

With a view to provide special skill and practical experience in a particular area, a principal can
depute an articled trainee to another principal with mutual consent of both. The period of the exchange
should not exceed one year. Such exchange of articled trainee must be reported to the Institute.
7.6
Termination of Deed of Articleship

i.
The deed of articleship can be terminated at any time through mutual consent of both articled
trainee and his Principal.
ii.
Information regarding termination of the deed of articleship must be reported to the Institute
within seven days from the date of termination.
iii.
After the termination of the deed of articleship, the articled shall be served to another
Principal for the remaining period of practical training.
iv.
If an articled trainee remains absent continuously for more than 15 days without any prior
information, the Principal may request to the Institute for permission to terminate the trainees
deed of articleship. The Institute may grant permission to terminate the deed of articleship after
proper investigation on the request forwarded.
v.
The Principal with one months prior permission from the Institute and similar information from
the articled trainee can terminate the deed at any time.
The prescribed Form of Termination of Articleship Deed is given in Annexure 8.
7.7
Notifying the Principals Position

In case a Principal dies or gives up his accountancy profession or is unable to continue his training
job for some unforeseen reasons, his partner, or any or his legal representative or an employee
working in his accounting firm shall have to inform the Institute of submit a report about the Principals
situation within 30 days from the date of the above occurrence with detailed information about the
articled training. The prescribed Form is given in Annexure 9.
Practical Training
18
7.8
Record of Trainees
The Principal shall keep an updated individual record of every articled trainees performances in the
format as specified in Annexure 10. The Principal shall report detailed particulars of training of individual
articled trainee in the format specified in Annexure 11. This should be reported to the Institute in
every six months or as and when demanded by the Institute.
7.9
Leave to an Articled Trainee

(i)
An articled trainee shall be granted forty days leave in one year, not exceeding more than 120
days in three years, excluding public holidays.
Leave exceeding the prescribed days under the regulations shall be adjusted in the leave earned
during working extra days during the extended period of articleship training.
(ii) Public holidays during leave period shall be included in the duration of leave taken.
7.10 Working Hours of Articled Trainees
The working hours of an articled trainee shall be 40 hours a week and working hours must be between
9 AM to 5 PM.
7.11 Action against Misconduct by the Principal and Articled Trainees
Misconduct or breach of the existing rules and regulations by the Principal or by the articled trainees
is subject to thorough investigation and penalization to the guilty,
(i)
Complaint by the Principal against misconduct or breach of regulations as described in Sub

Rule 2 of Rule 24 by any articled trainee shall be subject to investigation by the Council.
(ii) An articled trainee if found guilty, during the course of investigation, of breach of deed or of any
misconduct as specified in (i) above, the Council may either cancel the trainees registration or
may order him to serve for an additional training period ranging from six months to one
year. However, an opportunity to be heard shall be provided to the articled trainee prior to
issuing such an order.
(iii) If the Council finds, after necessary investigation, the complaint filed by the Principal baseless
or done with some evil intention, it may dismiss the principals complaint and also take necessary
action for the false complaint. However, the principal shall be provided a reasonable opportunity
to be heard before issuing such an order.
7.12 Action Against Principal
(i)
In case of any complaint by the articled trainee, against misconduct or the breach of training
regulations by the Principal as specified in Sub Rule 2 of Rule 24, of Nepal Chartered Accountants
Regulations 2004, the Council may initiate an investigation on such matter to resolve the issue
of complaint.
(ii) Complaint or information received from articled trainee/s regarding breach of conduct or acts of
misconduct by the Principal, and if the Principal is found guilty of breach of deed, or malafide
intention, misconduct from an investigation as in (i) above, the Council may issue warning to the
Principal or may pass an order to withdraw the entitlement of the Principal to engage the remaining
number of articled trainees for the period of six months to one year and it shall be the duty of the
Principal to comply such order. A reasonable opportunity to be heard shall be provided to the
Principal before issuing such order.
19
Practical Training
(iii) If the Council finds that the complaint filed by the articled trainee is baseless or motivated with
an evil intention, it may order cancellation of the registration of such articled trainee or to order
him to serve the Institute for an additional articleship period ranging from six months to one
year. A reasonable opportunity of hearing shall, however, be provided to the articled trainee
before issuing such an order.
(iv) Notwithstanding anything contained in this Rule, if the articled trainee who has filed the complaint
as in (i) above, does not wish to continue work under the current Principal, may join articled
training under another Principal as an additional trainee in accordance with Rule 26 of the Nepal
Chartered Accountants Regulation, 2004.
(v)
Prohibition against involving articled trainees in unrelated activities.

a. No Chartered Accountant member shall engage articled trainees of any other institutions in
any unrelated activities or issue training related certificate without prior permission of the
Council.
b.
No Chartered Accountant member shall be allowed to provide training to the Articled trainees
of foreign accounting body as a member of such accounting body without prior permission
from the Council.
c.
Articled Trainee registered according to this Rule shall not be engaged to any foreign
accounting firm in excess of 180 days.
7.13 Issue of Certificate of Completion of Articleship

The Principal shall inform the Institute successful completion of the articleship training in the form
prescribed in Annexure 12 & 13. The Institute, after receiving such information from the Principal,
shall issue Certificate of Completion of Articleship to the students successfully completing the articled
training.
7.14 Prohibition to Receive Financial Benefit from Articled Trainees
The Principal shall not receive/accept any kind of fee, donation, charge, loan, deposit or any other
kind of financial benefit or facility from articled trainee.
Practical Training
20
8. Annexures
Annexure-1 Detailed Syllabus of Chartered Accountancy Professional (CAP)-I
23
Group-I
23
25
28
Group-II
29
33
36
Annexure-2 Detailed Syllabus of Chartered Accountancy Professional (CAP)-II
40
Group-I
40
42
45
Group-II
49
50
53
Paper 7: Income Tax & Vat
57
Annexure-3 Detailed Syllabus of Chartered Accountancy Professional (CAP)-III
62
Group-I
62
64
66
69
Group-II
73
76
81
85
Annexure- 4 Application for Registration in CAP-I/Foundation Level
87
Annexure- 5 Application for Registration in CAP-II/Intermediate Level
88
Annexure- 6 Application for Registration in CAP-III/Final Level
89
Annexure- 7 Deed of Articleship
90
Annexure- 8 Certificate of Service on Discontinuance or Termination of Articleship
93
Annexure- 9 Report of Non Compliance of Articled Training
94
Annexure- 10 Record of Assignment
95
Annexure- 11 Report of Practical Training
96
Annexure- 12 Certificate of Service Under Articles
97
Annexure- 13 Letter of Completion of Articleship Training
98
Annexure- 14 Eligibility Certificate
99
21
Annexures
Annexure-1
Detailed Syllabus of Chartered Accountancy Professional (CAP)-I

(One Paper-Three Hours-100 Marks)
Level of Knowledge
Basic
Objectives
i.
To enable the candidates to understand the basic fundaments of financial

accounting system.
ii.
To enable the candidates to apply theory to basic financial accounting issues

and process financial transactions.
iii. To enable the candidates to prepare accounting statements of sole

proprietorship and partnership and not-for-profit entities.
Detailed Course Contents

1.
2.
Introduction
a.
Business and its common types organized/incorporated bodies, partnerships, sole

proprietorship/traders, Cooperatives, Trusts, Clubs, Not-for-profit organizations. Forms of
their capital and capital structure.
b.
Accounting as a profession Meaning of accounting as a language of business and measurement

discipline, interrelationship between accounting and other professions economics
and statistics. Role of accounting profession in business and society as a whole.
c.
Basic accounting concepts related to revenue, assets and liabilities recognition and generally
accepted accounting practices, brief introduction to Nepal Accounting Standards and Framework
for the preparation and presentation of financial statements as promulgated by Nepal Accounting
Standard Board.
d.
Types of financial statements Balance Sheet, Income Statement, Cash Flow Statement,
Statement of Changes in Equity and Notes to Accounts, Users of financial statements and
significance of accounting in meeting their needs for making economic decisions.
Accounting Systems and Processes

a.
Introduction to double entry book keeping systems, rules of debit and credit, meaning of assets,
liabilities, income, revenue, gain, expenses, expenditure, accounting equation. Basis of accounting
Cash, Accrual (mercantile) and hybrid.
b.
Form and content of accounting records manual and computerized
c.
Books of original entry and ledgers, journal, sales and purchase ledgers, columnar/analytical
cash book, cash and bank book, subsidiary ledger, main/general ledger, extracting of trial balance,
and consumable and non-consumable inventory including fixed assets ledgers. Bank reconciliation
statement and its preparation. Use of control and suspense accounts.
d.
Adjustment or correction before preparation of final financial statements accrual and

prepayments adjustment, depreciation, refundable tax (e.g. VAT) treatment, provisions for
uncollectible receivables and advances, slow-moving, non-moving and obsolete inventory,
suspense treatment and locating errors in trial balance hit and trial method and preparation
of final adjusted trial balance.
e.
Brief introduction of computerized accounting systems, controls and data safekeeping.
23
CAP-I/Paper 1: Fundamentals of Accounting
3.
Accounting treatment of fixed assets and depreciation

recognition and measurement of cost, reasons and methods of depreciation calculation (straight
line, written down value, double declining, sum of the years digits) and assets valuation. Treatment
of disposal and write off of fixed assets. Treatment of fixed assets and depreciation for income tax
purposes. Physical verification of fixed assets and record updating.
4.
Accounting treatment of inventory

definition and types of inventory, determination of cost of inventory, methods of inventory costing
(FIFO, LIFO and average methods), types of inventory management systems (periodic and
perpetual), valuation of inventory (Net Realizable Value method), provisions for obsolescence and
movement.
5.
Accounting for Special Transactions (simple practical problems for each of them)
consignments, joint ventures, branch (excluding foreign branch), bills of exchange, department and
royalty.
6.
Financial statements preparation

sole proprietor/trader and not-for-profit organizations. Trading and profit and loss account,
manufacturing account and balance sheet of sole traders. Receipts and payments account, income
and expenditure account and balance sheet (Fund Accountability Statement) of not-for-profit
organizations.
7.
Partnership Accounts
Concept and treatment of goodwill and profit sharing, admission, retirement, death of partner and
dissolution of partnership.
Text Books:
1.
Study Material-ICAN
Reference Books:
1.
Advanced Accounts, M.C. Shukla, T.S. Grewal & S.C. Gupta, S. Chand & Co. Ltd., New Delhi
2.
Advanced Accountancy, S.P. Jain & K.L. Narang, Kalyani Publishers
3.
Nepal Accounting Standards (NAS)
CAP-I/Paper 1: Fundamentals of Accounting
24

Level of Knowledge
Basic
Objectives
To provide basic and conceptual understanding of micro & macro economics and
development of Nepalese economy and problems thereof.
Part A: Microeconomics (50 Marks)
1.
Introduction to Microeconomics
Meaning of economics
Basic issues in economics: scarcity, efficiency and alternatives
Introduction to microeconomics
Scope and uses of microeconomics in business decision making
Microeconomics and macroeconomics - basic differences
Demand and Supply Analysis
Concepts of demand: factors affecting demand, demand schedule, individual and market
demand, law of demand, movement along and shift in demand.
Concepts of supply: factors affecting supply, supply schedule, individual firms and market supply
law of supply, movement along and shift in supply.
Elasticity of demand: concepts and measurements of price, income and cross elasticity of
demand. 3 Consumer Behavior (6)
Concepts of utility: cardinal and ordinal
Basic concepts of total, average and marginal utility and understanding of the law of diminishing
marginal utility.
4.
5.
Indifference curves: concept, properties, Marginal Rate of Substitution (MRS)
Theory of Production
Concepts of production, factors of production and production functions
Production with one variable input: concepts of total, average and marginal products
The Law of Variable Proportions.
Production with two variable inputs: production isoquants, isocost lines.
Concepts of Returns to Scale.
Costs and Revenues
Concepts of costs: economic costs, accounting costs, sunk costs
Short-run and long-run costs: total, average and marginal costs;
Concepts of revenues: total, average and marginal revenues under conditions of perfect and
imperfect competition
Concept of and conditions for profit maximisation by firms
25
CAP-I/Paper 2: Fundamentals of Economics
6.
Market Forms and Product Pricing
Perfect competition: features, pricing and production decisions in the short and long-run time
periods
Monopoly: features, pricing and production decisions in the short and long-run time periods.
Monopolistic competition: features, pricing and production decisions in the short and long-run
time periods
7.
Oligopolistic competition: features and basic distinction with monopolistic competition
Markets for Factor Inputs
Pricing of factors of production: Land, Labour, Capital and Entrepreneurs.

Part B: Macroeconomics and Nepalese Economy (50 Marks)
1.
2.
3.
Basic Concepts
Meaning of macroeconomics
Macroeconomic objectives: growth, employment and price stability
Stocks and flows
Economic organizations: Market, Command, Mixed Economies
Black economy
Concepts of Growth and Development
National Income
Circular flow of income
Concepts of GDP, GNP, NNP and their measurement
Nominal and Real GDP, and GDP Deflator
Personal income and disposable income and saving.
Consumption, Saving, Investment & Determination of Equilibrium Output

3.1 Consumption and Saving
The Consumption Function
The Saving Function
The Marginal Propensity to Consume and Save
3.2 Investment
Constituents of Investment
Determinants of Investment
The Investment Demand Curve
3.3 Determination of equilibrium level of income and output (Two Sector Economy Only).
3.4 Theory of employment
4.
Nepalese Banking and Monetary Policy
Banking system and the economy
Financial intermediaries and their role in the economy
Role of central bank
26
5.
6.
The concept of money supply: narrow and broad money supplies
Objectives and instruments of monetary policy
Fiscal Policy
Government budgeting
Fiscal policy: objectives and instruments
Taxation policy
Deficit financing
Foreign Trade
Meaning of Foreign Trade
Free Trade and Protectionism
The concept of balance of payments (BOP) and balance of trade (BOT)
Composition and direction of foreign trade in Nepal
Problems of Foreign Tade
Gains from international trade
An Introduction to International & Regional Organizations.
7.
The International Monetary Fund (IMF)
The World Bank
Asian Development Bank
World Trade Organization
South Asia Free Trade Area (SAFTA)
BIMSTEC
Nepalese Economy
Characteristics of the Nepalese economy: dual economy
Characteristics, issues and constraints in agriculture
Macroeconomic issues: poverty, inflation, employment
Industry: Investment, production and employment
Industrial Policy
Public Enterprises: types, performance and constraints
Contemporary Issues in Nepalese economic development
Text Book:
1.
Study Material-ICAN
Reference Books:
1.
2.
Samuelson, Paul A. and Nordhaus, William D., Economics, Tata McGraw-Hill., India.
Lipsey, Richard G. and K. Alec Chrystal, an Introduction to Positive Economics, Oxford University
Press, Great Britain.
3.
Devkota, S. C. Economic Theory, 2002, Ratna Pustak Bhandar, Kathmandu, Nepal.
4.
Latest Human Development Report, Kathmandu
5.
Latest Five Year Plan, National Planning Commission, Kathmandu
6.
Latest Economic Survey of Ministry of Finance/GoN, Kathmandu.
27

Paper-Three Hours-100 Marks)
Level of Knowledge
Objectives
Basic
To develop ability to communicate clearly and correctly in written English, in
matters having relevance to day-to-day business operations and emphasis on
quality of presentation.
Detailed Course Contents:

1.
Communication in organizations
2.
Reading and Writing: Paragraphs and Essays

i.
Beyond Television: The Future of Communication Eric Barnouw
ii.
A Technological Ombudsman Alvin Toffler
iii.
Moonmens Gadgets for Earthlings Pravin Kumar
iv.
Protection form Advertisements Gerald Barry et al
v.
Mass Media and Society Gerald Barry et al
vi.
Our World and Industrial Revolution J. Bronowsky
vii. Humanistic and Scientific Approaches to Human Activity Moody E. Prior

3.
Business Correspondence:
Email messages
Memos
Direct and indirect letters
Banking, insurance & other corporate sector correspondence
Resume and job application
4.
Reports, proposals and press releases.
5.
Interview, Meeting and presentation skills.
Text Book:
1.
Study Material-ICAN
Reference Books:
1.
Lesikar and Flatly Business Communication for the Internet Generation. New Delhi: Tata McGraw-Hill.
2.
Arora, V.N. and Lakshmi Chandra, Improve Your Writing. New Delhi : Oxford, 1981.
CAP-I/Paper 3: Business Communication
28

Paper-Three Hours-100 Marks)
Section A: Mathematics (50 Marks)

Level of Knowledge
Basic
Objectives
To acquaint students with quantitative techniques those are relevant to economics,

business and accounting. The students should be able to assimilate the
knowledge within a business context so that they understand how techniques
can be used by accountants.
Detailed Course Contents:

1.
2.
3.
4.
5.
Mathematics of Finance:
1.1
Simple Interest and Compound Interest
1.2
Annuity, Sinking Fund, Present Value of Annuity, Perpetuities
Number System:
2.1
Bases
2.2
Conversion amongst Number Systems
Permutations and Combinations:

3.1
Permutations
3.2
Permutations with restrictions
3.3
Circular permutations
3.4
Combinations
Progressions:
4.1
Arithmetic Progression
4.2
Geometric Progression
Matrices and Determinants:

5.1
6.
7.
Matrix Operations
5.2
Matrix Inversion
5.3
Solution of System of Linear Equations
Functions:
6.1
Coordinate System, Slope
6.2
Straight line, Quadratic Equation, Break-even Point
6.3
Exponential and Logarithmic Function
Graph of Linear Inequalities:

7.1
Graph of Linear Inequalities in Two Variables
29
CAP-I/Paper 4: Mathematics & Statistics
8.
9.
Elements of Trigonometry:
8.1
Systems of Measurement
8.2
Trigonometrical Ratios
8.3
Trigonometrical Identities
8.4
Compound Angles and Standard Angles
8.5
Multiple and Sub multiple angles
8.6
Product -Sum Relations
8.7
Inverse Circular Functions
Differential Calculus:
9.1
Derivative and the Slope of a Graph
9.2
First Principle Method
9.3
Techniques of Differentiation
9.4
Maximum and Minimum of a Function
9.5
Applications of Differentiation
10. Integral Calculus:

10.1 Anti-derivative, Indefinite Integrals
10.2 Substitution method, Integration by Part, Partial Fraction
10.3 Definite Integration, Geometrical Interpretation
10.4
Properties of Definite Integrals
10.5 Simple Applications of Definite Integration
30
Section B: Statistics (50 marks)

Course Objective
The objective of the course is to acquaint the students with statistical tools and
techniques and develop the skill of the students to use them in situations relevant
to the business, economics and accounting that are used by accountants.
1.
Introduction and Data Collection

1.1
Concept, Functions, Scope and Limitations of Statistics
1.2
Types of Data: Primary Data and Secondary Data
1.3
Sampling Techniques: Probability Sampling
Simple Random Sampling
Systematic Sampling
Simple Stratified Sampling
Cluster Sampling
Non-Probability Sampling
Judgemental Sampling
Convenience Sampling
Purposive Sampling
Quota Sampling
1.4
Collection of Data: Questionnaire method, Interview Method.
1.5
Probability: Simple Probability, Addition Theorem and Multiplication Theorem of Probability,

Conditional Probability (Simple cases)
2.
Classification, Tabular and Diagrammatic Presentation of Data

2.1
Types of Classification
2.1.1
Tabular Presentation: Discrete Frequency Distribution, Continuous Frequency Distribution,

Bi-variate Frequency Distribution, Cumulative Frequency Distribution
2.1.2
Diagrammatic/ Graphic Presentation: Bar Diagram, Pie Diagram, Histogram, Frequency

Curve and Ogive.
3.
4.
5.
Measures of Central Tendency

3.1
Types of Averages: Arithmatic Mean and Geometric Mean, Median and Mode
3.2
Positional Values: Quartiles, Deciles and Percentiles
Measures of Dispersion
4.1
Measures of Dispersion: Range, Mean Deviation and Standard Deviation
4.2
Measures of Skewness and Kurtosis
Correlation and Regression Analysis

5.1
Correlation: Cause and Effect Relationship, Karl Pearsons Correlation Coefficient and Rank
Correlation Coefficient
5.2
Regression: Regression Equation and Regression Coefficient.
31
6.
7.
Time Series Analysis
(8)
6.1
Component of Time Series, Mathematical Models of Time Series,
6.2
Measurement of Trend, Measurement of Seasonal Variation
Index Number
7.1
(8)
Definition, Uses of Index Number

Types of Index Number: Laspeyer, Paasches and Fishers Index Number, Ideal Index Number
7.3
Construction of Index Number: Methods and Problems
7.4
Cost of Living Index Number: Construction and Uses
Text Book:
1.
Study Material-ICAN
Reference Books:
1)
Brief Calculus, An Applied Approach, Fifth Edition, Larson Edwards Houghton Mifflin Company,
Boston New York.
2)
Business Mathematics, D.C. Sancheti, V.K. Kapoor, Sultan Chand and Sons
3)
Calculus with Finite Mathematics, Geoffrey C. Berresford, Andrew M. Rockett, Houghton Mifflin
Company, Boston New York.
4)
Business Mathematics, Hari Adhikari, Bhupal Baral, Asmita Books Publishers and Distributors.
5)
Levin, I. Richard and Rubin S. David; Statistics for Management, Prentice Hall of India,
6)
Levine M. David, Krehbiel, C. Timothy and Berenson. L. Mark, Business Statistics: A First Course
Pearson Education,
7)
Shrestha, Sunity and Amatya, Sunil; Business Statistics, Budha Academic Publishers & Distributors
Pvt. Ltd.
32

(Paper-Three Hours-100 Marks)
Level of Knowledge :
Basic
Objective
To develop knowledge and understanding of principles, functions and concepts

of management and organizational relations relevant to a professional accountant
and to provide with an understanding of management practices in modern
organizations.

1.
2.
3.
4.
5.
Concepts of Organization and Management

1.1
Organizations: Meaning, Nature and types
1.2
Organizational goals: Types, formation, succession, displacement
1.3
Management: Meaning, nature, functions, principles
1.4
Managerial skills and roles
Evolution of Management
2.1
Classical Theories: Scientific management, Administrative management
2.2
Human relations and behavioral theories
2.3
Management science theory
2.4
Systems theory
2.5
Contingency theory
Environmental Context of Management

3.1
Organization environment relationships
3.2
Internal environment forces
3.3
External environment forces
3.4
SWOT analysis of business environment in Nepal
Social Responsibility of Business

4.1
Social responsibility: Concept and approaches
4.2
Areas of social responsibility
4.3
Management ethics
Planning
5.1
Planning: Definition, types, importance and methods
5.2
Steps in planning process
5.3
Quantitative tools for planning
5.4
Strategic planning
5.5
Implementation of plans
33 CAP-I/Paper 5: Management and Organizational Relations
6.
Decision Making
6.1 Decision making : meaning, types, styles
6.2 Decision making-environment
6.3 Decision making process
6.4 Creativity and decision making
6.5 Information and decision making
7.
Organizing
7.1 Organizing : concept, approaches and principles
7.2 Forms of organizational structures: Traditional and modern
7.3 Delegation and decentralization of authority
7.4 Coordination
7.5 Emerging concepts is organizing
8.
Managing People
8.1 Human Resource Management: concept and importance
8.2 Components of human resource management
8.3 Human resource management in Nepal
9.
Leadership
9.1 Leadership : Concept, functions and styles
9.2
Leaderships and Management
9.3 Theories of leadership: Trait, behavioral, situational

9.4 Groups and teams
10.
Motivation
10.1 Motivation: concept and importance
10.2 Theories of motivation: Hierarchy of needs, motivation hygiene, achievement motivation theory,
theory X and theory Y.
10.3 Techniques of improving motivation
11.
Communication
11.1 Communication: concept, importance and process
11.2 Type of communication
11.3 Communication channels
11.4 Barriers to communication
11.5 Techniques for improving communication
12.
Controlling
12.1 Control: meaning, purposes and process
12.2 Types of control system
12.3 Requirements for effective control system
12.4 Techniques of control
12.5 Management information system for control
CAP-I/Paper 5: Management and Organizational Relations
34
13.
Emerging Concepts in Management

13.1 Change Management
13.2 Conflict Management
13.3 Time Management
13.4 Stress Management
13.5 Quality Management
13.6 Business process reengineering
13.7 Globalization
14. Management Practices in Nepal

14.1 Existing management scenario
14.2 Planning, decision making, organizing, human resource management, leadership, controlling
practices.
Text Book:
1.
Study Material-ICAN
Reference Books:
1.
Stephen P. Robbins and Mary Coulter. Management - Prentice - Hall
2.
Ricky W. Griffin. Management - AITBS Publishers
3.
Dr. Govind Ram Agrawal. Principles of Management in Nepal - M.K. Publishers and Distributors
35 CAP-I/Paper 5: Management and Organizational Relations

(Paper-Three Hours-100 Marks)
Level of Knowledge : Basic
Objectives
1.
2.
3.
: To develop and understanding of Information technology by the students and will

be able to follow the technology trends and technologies use by the business
community.
Computer System Concepts

1.1
Introduction to digital computer system, block diagram of computer
1.2
Numbering system
Hardware Technologies
2.1
Types of input device: key boards, mouse, joysticks
2.2
Types of output device: monitor, plotter, printer
2.3
Primary and secondary memory
2.4
Microprocessor: arithmetic logical unit, registers, control unit and bus organization.
2.5
Switching mode power supply
Information Concepts
3.1
Digital representation of data: bit and bytes and conversion system, fundamentals of source
3.2
Fundamental difference of data and information, file organization
coding
4.
5.
6.
Data Processing Concepts

4.1
Introduction and types of data processing
4.2
Batch processing, online processing, time sharing centralized and decentralized
Development tools
5.1
Introduction to flowcharts: system flow charts, runs flow charts, program flow charts
5.2
Decision tables: types, illustrations, benefits and limitations
System and Software

6.1
Introduction and types of software: system software, application software and utility software
6.2
General case study on Windows 2000 and its successors
6.3
General programming concepts in C

6.3.1 Introduction to C
C Basics; variables and constants, simple data types in C, operators, header files, input and
output statement: Unformatted I/O, Formatted I/O, type conversion, loops and decisions (For
loop, while loop, Do while loop, Nested loop Case-break and continue statements, If Else,
Else-If and Switch statements), functions (variables, returning a value from a function, sending
a value to a function, arguments, preprocessor directives, C libraries, macros, header files and
proto typing), recursion.
CAP-I/Paper 6: Fundamentals of Information Technology
36
6.4
7.
8.
9.
6.3.2
Arrays and Strings

Initializing arrays, Multidimensional arrays, String; functions related to the strings
6.3.3
Structures and Unions

Initializing structures, Nested type structure, Arrays and structures and Unions
6.3.4
Pointers
Pointer data type, Pointers and Arrays, Pointers and Functions, Pointers and
Structures
6.3.5
Files and File Handling

Opening and creating a file in different modes (Read, Write and Append)
Office application tools Words processor, spread sheets, presentation package, and project
management package
Data Base Management

7.1
Introduction and application of database for modern organizations, database hierarchy, file
organization terms and concepts
7.2
Modern approach to data base, merits and demerits of data base
7.3
Types of data models: hierarchical model, network model, relational model, E-R diagram
7.4
Normalization
7.5
Advancements in database technology: object oriented database, distributed database, client

server systems
Data Communication and Networking

8.1
Definition and application of computer networking for modern organizations, types of computer
networking (client server and peer-to-peer)
8.2
Local area networking, metropolitan area networking and wide area networking, network
topology (bus, ring, star, mesh)
8.3
Network components (work station, server, network interface card, hub switch, modem,
gateway, and router)
8.4
Application layer overview of open system interconnection (OSI): mail system, domain name
system, HTTP, internet security: concept of firewall and intrusion protection
Data Storage, Retrieval and Security

9.1
Types of data storage devices and retrieval from them (hard disk, floppy disk, compact disk,
magnetic disk, optical laser disk, flash memory)
9.2
Redundant array of independent disk system of data storage and retrieval
9.3
Importance of data security, fundamental of encryption and decryption
Text Book:
1.
Study Material-ICAN
Reference Books:
1.
PK Sinha, Computer Fundmentals Concept, Systems and Applications, bpb, 2001
2.
V. Rajaraman, Computer Programming in C, Prentice Hall India Pvt, 1998
3.
Alexian Leon, Matheos Leon, Fundamentals of Information Technology, Leon TECH world 1999
37
CAP-I/Paper 6: Fundamentals of Information Technology
Annexure-2
Detailed Syllabus of Chartered Accountancy Professional (CAP)-II

Working
Objectives
i.
To enable the candidates to understand the principles, methods and procedures

of accounting as followed by different entities.
ii. To enable the candidates to understand the relevant laws, principles and
practices for the preparation and presentation of financial statements of
companies.
iii. To provide understanding of the tools and techniques followed in the analysis
and interpretation and presentation of financial statements of companies.

1.
Accounting Standards Framework for the preparation and presentation of financial statements
as promulgated by Nepal Accounting Standard Board. Nepal Accounting Standards issued by Nepal
Accounting Standards Board (made mandatory as well voluntary compliance but not the exposure
drafts). Historical cost concept vs. realization concept for preparation and presentation of financial
statements. Effect of changes in price levels.
2.
Accounting for Special Transactions (higher level practical problems for each of them) lease,
hire purchase and installment transactions; goods on sale or return; contract accounts, investment
accounts, branch (including foreign branch) and departmental accounts. Computation of insurance
claims for loss of stock and profit.
3.
Preparation & presentation of financial statements for company

a.
Accounting for share capital and reserve funds types of shares, issue of fresh shares, bonus
shares, right issue, redemption of redeemable preference shares, issue, redemption and
conversion of debentures, and underwriting of shares and debentures.
b.
Preparation of financial statements as per provisions in Company Act, format and contents
as per the Act/Rules, interpretation of items in balance sheet and income statement.
c.
Winding up of companies and accounting treatment arisen therefrom Statement of Affairs

and Liquidators Account. Additional disclosures and comment on going concern concept in
relation to winding up.
d.
Concept of acquisition, absorptions, amalgamation, merger and reconstruction Simple

practical problems.
4.
e.
Cash flow statements objectives, preparation methods (direct and indirect) and interpretations.
f.
Application of Nepal Accounting Standards in the preparation of financial statements for

general purpose.
Partnership Accounts - Treatment of goodwill and profit sharing, admission, retirement and death
of partner (including annuity and policies methods). Conversion of partnerships to a limited company
and merger of firms.
CAP-II/Paper 1: Advanced Accounting
38
5.
6.
Preparation and presentation of financial statements of special organizations

a.
Financial Institutions, including banks, finance companies and cooperatives types of

financial institutions as per Banking and Financial Institutions Act, Formats and contents
as prescribed by Central Bank, accounting policies and disclosures requirement, interest income
recognition and loan loss provisioning, capital adequacy and cash reserve requirement. Simple
practical problems.
b.
Electricity companies nature of operation (generation, transmission and distribution), transfer

pricing and requirements as per Nepal Electricity Act. Simple practical problems.
c.
Insurance companies nature of operation (life and general), formats and contents of financial
statements prescribed by Insurance Board, accounting and disclosure requirements, premium
income recognition, liability recognition and treatment of re-insurance. Simple practical problems.
d.
Agricultural farm accounting concept and peculiarity of inventory costing and valuation
systems.
Incomplete Accounts concept of incomplete records and generation of need for financial
information from other records, preparation of final financial statements from incomplete
records.
7.
Government Accounting concept and salient features of government accounting system. Basis
of accounting and accounts classification. Differences between government and business accounting.
Simple practical problems. Framework of NPSAS.
8.
Analysis and interpretation of financial statements

a.
evaluation of financial statements under Nepal Accounting Standards and other applicable
International Financial Reporting Standards.
b.
Segmental information analysis
c.
Analysis of performance and position through cash flow, ratios and trend
d.
Related party transactions disclosure and treatment
Reference Books:
1.
Nepal Accounting Standards (NAS)/Nepal Public Sector Accounting Standards (NPSAS)
2.
International Financial Reporting Standards (IFRS)
3.
Advanced Accounting, R.L. Gupta & M. Radhaswamy, S. Chand & Son, New Delhi
4.
Advanced Accounting, H. Chakraborty, Oxford University Press, Calcutta
39
CAP-II/Paper 1: Advanced Accounting

Level of Knowledge : Working

Objectives
: 1. To develop candidates capability in understanding the relevant auditing

procedure.
2. To develop candidates capability to display the ability to document the
accounting and internal control system of an enterprise.
3. To develop candidates capability in identifying significant risks and apply risk
assessment tools to the engagement.

1.
Nature and Concepts of Assurance

a.
Principles of assurance
Concept of assurance
i.
Benefits of assurance
ii. Purposes and characteristics of different forms of assurance

iii. Objectives of assurance; expression of opinion, detection and prevention of fraud and error
iv. Basic principals governing an assurance
v. Relationship of assurance with other subjects; internal audit and External audit; Auditing and
Investigation.
b.
Regulatory and ethical issues

i.
Scope and terms of an assurance engagement
ii. Scope and authority of professional pronouncements; code of ethics issued by Institute of
Chartered Accountants of Nepal, Code of ethics issued by IFAC and Nepal Standards on
Auditing develop and issued by Auditing Standards Board.
iii. Ethical and professional issues: integrity, objectivity, independence, confidentiality, professional
competence and due care and professional behavior.
iv. Quality control
v. Regulatory framework: Companies Act, Bank and Finance Companies Related Act and
International Financial Reporting Standards and interpretations.
2.
Planning an assurance engagement

i.
Importance of knowledge and understanding of a business
ii. Application of analytical procedures

iii. Risk assessments
iv. Materiality, tolerable error, and sample sizes
v. Design and documentation of plan and program
vi. Co-ordinance and monitoring of the work
CAP-II/Paper 2: Audit and Assurance
40
vii.
Evaluation of internal control system
viii.
Transaction cycles (revenue, purchases, payroll, inventory, capital expenditure)
ix.
Communication with management and those charged with corporate governance.
x.
Evaluation of financial statement assertions: assets, liabilities, income and expenditure,

including accounting estimates.
3.
Gathering evidence during an assurance engagement

i.
Different methods of obtaining evidence
ii.
Identification and use of the methods for different business situations
iii.
Reliability of different types of assurance evidence
iv.
Identification of situations where analytical procedures, test of control and substantive

procedures are to be implied.
v.
Evidence from analytical procedures, test of control and substantive procedures
vi.
Quantity and quality of evidence needed for reports
vii.
Written confirmation of representations from management.
viii.
Audit of payments: General considerations, wages, capital expenditure, other payments

and expenses, petty cash payments, audit of payments into and out of the bank,
reconciliation of bank statements with cash book
ix.
Audit of receipts: General considerations, cash sales, receipts from debtors, other
receipts
x.
Audit of purchases, vouching cash and credit purchases, forward purchases, purchases
returns
xi.
Audit of sales, cash and credit sales, goods on consignment, sale on approval basis,
sales under hire-purchase agreement, returnable containers, various types of allowances
given to customers, sales returns, sales ledger
xii.
Audit of suppliers ledger and debtors ledger: Self-balancing and the sectional-balancing
system, total or control accounts, loose leaf and card ledgers, confirmatory statements
from credit customers and suppliers, provision for bad and doubtful debts, writing off
of bad debts
xiii.
Audit of impersonal ledgers: Capital expenditure, deferred revenue expenditure and

revenue expenditure, outstanding expenses and income, repairs and renewals, distinction
between reserves and provisions, implications of change in the basis of accounting
xiv.
Audit of assets and liabilities
xv.
Audit of share capital and transfer of shares
xvi.
Audit of incomplete records
xvii.
Audit of limited companies: Appointment of auditors, powers and duties of auditors.
xviii. Special points in audit of different types of undertakings: i.e., educational institutions,
hotels, clubs, hospitals, hire-purchase and leasing companies (excluding banks, electricity
companies, cooperative societies, and insurance companies)
xix.
Features and basic principles of government audit, local bodies and non- governmental
organizations.
41
Completing and reporting on an assurance engagement

i.
Subsequent events leading to adjustment or disclosure
ii.
Evaluation of results of assurance tests and procedures
iii.
Reports on assurance engagements consistent with results of assurance procedures
iv.
Elements of assurance reports
v.
Elements of auditors reports and recommendations on the nature of an audit opinion
vi.
Extracts for assurance reports
Reference Books:
1.
Nepal Accounting Standards (NAS)
2.
Nepal Standards on Auditing (NSA)
3.
4.
Contemporary Auditing, Kamal Gupta - Tata McGraw Hill Publishing Co.
42

(One Paper-Two Sections-Three Hours-100 Marks)
Level of Knowledge
Working Knowledge
Objective
To gain the general knowledge of Nepalese and Indian Corporate and other
laws and their practical application.
Part A: Indian Corporate Laws

1.
(25 Marks)
Companies Act, 1956
Meaning, concept and types of companies
Incorporation of Companies
Lifting of Corporate Veil
Conversion of public company into private company and vice-versa
Memorandum of Association (MOA) & Articles of Association (AOA) and amendments thereof.
Promoters, Board of Directors and their duties and functions
Preliminary and Pre-operating Contracts and Expenses
Shares and Debentures, Prospectus-meaning, contents, abridged form of prospectus, additional

disclosures and statement by experts, mis-statement and its consequences, allotment,
underwriting, use of application money, purchase of own-shares and financial assistance to
buy its own shares, buy-back, issue of bonus shares and dividends its restrictions and procedures
conversion of share into stock, alteration of stock, reduction vs. diminution, issue at discount,
premium, share warrant, calls on shares, transfer of shares
2.
General Meeting of Shareholders
Meeting of Board of Directors
Winding up & Liquidation of Company
Negotiable Instrument Act
Comparative analysis of relevant provisions of Nepalese Negotiable instruments Act with Indian
Negotiable Instrument Act, 1881.
Part B: Nepalese Corporate Laws

1.
(75 Marks)
Companies Act, 2063 and Securities Act, 2063

1.1
Meaning, Concept and types of Company
1.2
Incorporation of Company, Prospectus , Memorandum & Articles, Shares and Debenture,

General meeting and Board Meeting, Accounts and Audit, Liquidation of Company and
Offence, Punishment and Legal Proceedings, Relevant provisions of Nepalese CompanyAct.
1.3
Meaning and Concept of Securities and Security Exchange.
1.4
General Concept on Securities Exchange Board, Security Exchange Market and Transactions
of Securities, Securities Exchange Professionals, Offences, Penalties and Legal Proceedings
and other Relevant Provisions of Nepalese Securities Exchange Act, 2063.
43
CAP-II/Paper 3: Corporate & Other Laws
2.
3.
Banking Laws
2.1
Concept of Bank and Types of Bank
2.2
Role of Central Bank and directives issued by Central bank other to banks and financial institutions
2.3
Objectives and Functions of the Central Bank
2.4
Establishment and Management of Commercial and Development Bank
2.5
Supervision, Direction and Monitoring of the Banks
2.6
Banking Offences and Penalties
2.7
Relevant Provisions of Banking Acts (NRB Act 2058 and BAFIA 2063)
Industrial Laws
3.1
Meaning, Concept and Types of Industries
3.2
General Concept of Industry Promotion Board, Licensing, Registration of the Industry,

Offences and Penalties
3.3
Meaning and Concept of Foreign Investment and Technology Transfer
3.4
General Concept of Incentives for Foreign Investor and Dispute Settlement
3.5
Relevant Provisions of Nepalese Industrial Enterprises Act, 2049 and Foreign Investment
and Technology Transfer Act, 2049
4.
5.
6.
Labor and Bonus Laws

4.1
Concept of Labor / Capital Relations
4.2
Types Labor
4.3
Various Aspects of the labor, Code of Conduct and the punishment, Dispute Settlement
4.4
Meaning and Concept of Bonus
4.5
Bonus Distribution and Dispute Settlement
4.6
Relevant Provisions of Nepalese Bonus Act, 2030 and Labor Act, 2048
Law of Contract
5.1
Meaning, Concept, Types and Elements of valid contract
5.2
Breach of Contract and its Remedies
5.3
Performance of Contractual Liability
5.4
Relevant Provisions of Nepalese Contract Act, 2056
Insurance Law
6.1
Meaning, Concept and Types of Insurance
6.2
Fundamental Principles of Insurance
6.3
Premium and Policy
6.4
Insurance Offence and Penalties
6.5
Relevant Provisions of Nepalese Insurance Act, 2049
44
7.
8.
9.
Audit Law
7.1
Meaning and Concept of Audit
7.2
Basis of the Audit
7.3
Government Audit and Office of the Auditor General
7.4
Qualification of the Auditor
7.5
Relevant Provisions of Nepalese Audit Act, 2048
Laws Relating to the Negotiable Instruments

8.1
Meaning and Concept of Negotiable Instruments
8.2
Classification of instruments
8.3
Differences between Promissory Note, Bill of Exchange and Cheque
8.4
Negotiation, negotiability, assignability
8.5
Rights and obligations of parties to an instrument obtained illegally
8.6
Notice of Dishonor
8.7
Noting and Protesting
8.8
Presentation of Instrument
8.9
Payment and Interest
8.10
Other Relevant Provisions of Nepalese Negotiable Instrument Act.
Nepal Chartered Accountants Act & Regulations

9.1
About the Institute of Chartered Accountants of Nepal
9.2
Examination and Academic Qualification of Chartered Accountants, General Concept of

Code of Conduct and Penalties
9.3
Relevant Provisions of Nepal Chartered Accountants Act, 2053 and Regulations 2061
Reference Books:
1.
Paul L. Davies, Principles of Modern Company Law
2.
Avtar Singh, Company Law (11th Edition, 1996), Eastern Book Company, Lucknow
3.
Bharat Raj Uprety, Company Kanoon
4.
Ellinger and Lommicka, Modern Banking Law, 2nd Edition
5.
J. Beatson, Law of Contract, 28th Edition
6.
M N Mishra, Insurance Principles and Practice, 6th Edition
7.
M.C. Shukla, A manual of Mercantile Law
8.
Kashi Raj Dahal, Industrial Jurisprudence
9.
Gyaindra Bahadur Shrestha, Byawasayako Kanooni Batabaran
10.
Madhav Aryal, Banking Kanoon
11.
Ram Prasad Shrestha, Legal Environment of Business
12.
Rishikesh Wagle and Kirti Bilash Pant, Legal Environment of Business in Nepal
45

Objectives
: To develop knowledge and understanding of financial management methods for

analyzing the various sources of finance and capital investment opportunities
and application of various tools and techniques for business planning and control.

1.
Introduction and Fundamental Concepts of Financial Management

An overview of financial management; objectives of financial management; the financial environment:
markets, institutions, and interest rates; risk and return: the basics, portfolio theory and asset pricing
models, time value of money.
2.
Analysis of Financial Statements

Overview, analysis of financial statements, precautions in statements analysis, horizental analysis,
vertical analysis, ratio analysis, cash flow analysis, reporting fundamentals.
3.
Valuation of Securities
Fixed income securities- characteristics and valuation, common stock, characteristics, valuation
and issuance.
4.
Capital Investment Decision

Concepts of cost of capital, capital budgeting, evaluating cash flows, cash flow estimation, investment
evaluation and capital rationing.
5.
Strategic Financial Decision

Basics of Capital structure, Capital structure management, Dividend policies.
6.
Working Capital Management and Financial Forecasting

Financial forecasting and working capital policy, management of cash and marketable securities,
management of accounts receivables, short-term and long-term funding alternatives.
7.
Strategic Finance and Policy

Short-term finance: how companies raise finance, shareholders funds, methods of raising equity
finance, long-term debt finance, dividend decision: the strategic and legal dimensions of dividend,
theory of dividend policy, capital structure: introduction, operating and financial gearing, gearing and
the required return, cost of debt capital, overall cost of capital, financial distress, signaling and agency
costs.
Reference Books:
1.
Brigham, Eugene F; Ehrhardt Michael C; Financial Management Theory and Practice, Thomson
South-Western.
2.
Moyer, Charles R; Mcguigan James R; Kretlow, William J; Contemporary Financial Management,

Thomson South-Western.
3.
Shapiro, Alan C; Balbirer Sheldon D; Modern Corporate Finance, Pearson Education.
CAP-II/Paper 4: Financial Management
46


Objectives
: To acquaint students with a comprehensive knowledge of costing concepts

and detail procedures and documentation involved in cost ascertainment
systems.
To provide with an understanding of the application of above knowledge to
basic planning, control and decision-making.

1.
Cost concepts and costing methods

1.1. Evolution of cost accounting
1.2. Definitions
1.3. Objectives of cost accounting
1.4. Importance of cost accounting
1.5. Cost Accounting System
1.6. Cost Concepts
1.7. Elements of Costs
1.8. Types and methods of Costing
2.
Material Control
2.1. Purchasing of materials
2.2. Receiving of materials
2.3. Inspection of materials
2.4. Storage of materials
2.5. Issuing of materials
2.6. Maintenance of Inventory records
2.7. Techniques of Material control
2.8. Pricing Methods
2.9. Stock valuation
2.10 Material Losses
3.
Labour Control
3.1. Direct and Indirect Labour
3.2. Control over Labour costs
3.3. Attendance and Payroll system
3.4. Treatment of Holiday pay, idle time, overtime etc.
3.5. Labour Turnover
3.6. Methods of wage payment
3.7. Incentive System
3.8. Accounting for labours
47
CAP-II/Paper 5: Cost and Management Accounting
4.
5.
Overhead Control
4.1.
Classification of Overheads
4.2.
Manufacturing Overheads
4.3.
Office and Administrative Overheads
4.4.
Selling & distribution Overheads
4.5.
Distribution of Overheads
4.6.
Absorption of Overheads
4.7.
Treatment of under-absorbed and Over-absorbed overheads
4.8.
Treatment of certain items in costing
Cost Accounts System, Cost Control Accounts (Integrated and Non-integrated Accounting
System)
5.1.
6.
Non-Integrated Accounting System
5.2.
Integrated Accounting System
5.3.
Reconciliation of Cost and Financial Accounts
Methods of Costing
6.1.
Job Costing System
6.2.
Batch Costing System
6.3.
Contract Costing System

6.3.1. Meaning
6.3.2. Recording of contract costs
6.3.3. Specific aspects of Contract Costing
6.3.4. Profit on Incomplete Contracts
6.4.
Process Costing System

6.4.1. General Principles
6.4.2. Treatment of Process loss and gains
6.4.3. Working Progress
6.4.4. By-products and Joint products
6.4.5. Inter-process profits
6.5.
Operating Costing System

6.5.1. Introduction, Scope
6.5.2. Collection, classification and ascertainment of cost
7.
Cost concepts for Decision Making

7.1.
Cost Behaviour
7.2.
Methods of separating fixed and variable costs
7.3.
Cost Volume Profit Analysis

7.3.1. Profit volume ratio
7.3.2. Break-even Point
7.3.3. Margin of Safety
7.3.4. Target profit
48
8.
9.
7.4.
Limiting Factor
7.5.
Marginal Costing and Differential Costing
7.6.
Marginal Costing and Absorption Costing
7.7.
Others
Costing for planning and Control Budgets

8.1.
Budgets and Budgetary Control System
8.2.
Steps in Budgetary Control
8.3.
Types of Budgets
8.4.
Fixed and Flexible Budgeting
8.5.
Implementation of Budgets
8.6.
Control Ratios
Uniform Costing and Inter firm comparison

9.1.
Meaning
9.2.
Application of Uniform Costing
9.3.
Objectives of Uniform Costing
9.4.
Advantages of Uniform Costing
9.5.
Limitations of Uniform Costing
9.6.
Inter-firm Comparison
10. Cost Control And Cost Reduction

10.1. Introduction
10.2. Distinction between Cost Control and Cost Reduction
10.3. Advantages of Cost Reduction
10.4. Cost Reduction Plan & Program
10.5. Scope of Cost Reduction
11. Cost Audit
11.1. Important aspects of Cost Audit
11.2. Purpose of Cost Audit
11.3. Types of Cost Audit
11.4. Advantages of Cost Audit
11.5. Functions of Cost Auditor
Reference Book:
1.
Cost Accounting S.K. Saxena & C.D. Vashist
2.
Management & Cost Accounting - Colin Dury
49

(One Paper- Two Sections-Three Hours-100Marks)
Section A: Business Communication (50 Marks)
Level of Knowledge
: Working
Objectives
: To develop an understanding the role of communication plays in business,

communication process with basic qualities of business documents, letters,
reports through writing assignments simulating situations occurring in business
organizations. Become familiar with sources of business information and the
techniques for collecting data necessary for the preparation of documents in
business and produce employment communication, including resume, cover
letter, and other employment documents. Develop an understanding of nonwritten business communications; e.g., listening, nonverbal communication,
intercultural communications, oral and visual communications and demonstrate
human relations skills through the use of effective listening techniques and
interpersonal skills withina group setting (team building).
1.

A.
B.
C.
Introduction: Communicating at Work

1.
Succeeding in the new workplace
2.
Examining the process of communication
3.
Overcoming interpersonal barriers
4.
Communicating in organizations
5.
Ethics in business communications
6.
Strengthening your communication skills
Working in Groups
1.
Listening skills
2.
Group interactions
3.
Determining group goals
4.
Individual roles in groups
5.
Conflict resolution
6.
Effective meetings
7.
Writing notifications, agenda and minutes
8.
Giving and receiving feedback in groups
Communicating Across Cultures

1.
Importance of international business
2.
Diversity in todays workplace
CAP-II/Paper 6: Business Communication & Marketing
50
D.
E.
3.
Ways to look at culture
4.
Values, beliefs, and practices
5.
Nonverbal communication
6.
Writing to an international audience
7.
Learning more about international business communication
Employment Communication
1.
Preparing for employment
2.
The persuasive resume
3.
Preparing for computer scanning
4.
Faxing or emailing your resume
5.
The persuasive letter of application
6.
Follow-up letters
7.
Interviewing for employment
Analyzing Information and Writing Reports and Proposals

1.
An Inside Perspective: Analyzing Data and Writing Reports
2.
A timetable for writing reports
3.
Choosing information for reports
4.
Analyzing data and information for reports
5.
Organizing information in reports
6.
Presenting information effectively
7.
Report types: informational and analytical
8.
Formal and informal reports proposals
Reference Books:
1.
Guffey, Mary Ellen. Business Communication: Process and Product. 3rd Ed. Singapore: Thomson
Asia Pte Ltd, 2004.
2.
Bovee, Courtland L., John V. Thill, and Barbara E. Schatzman. Business Communication Today.
7th Ed. New Delhi: Pearson, 2003.
3.
Lesikar, Reymond V., John D. Pettit, Jr. and Marie E. Flatley. Lesikars Basic Business Communication.
8th Ed. New Delhi, Tata McGraw-Hill, 2001.
51
Section B: Marketing (50 Marks)

Objectives
: To develop knowledge and understanding of fundamentals of marketing relevant to a
professional accountant and understanding of marketing forces and practices in

organizations.

1.
2.
Meaning of Marketing and Marketing Mix

1.1
Marketing: meaning and importance
1.2
Marketing mix: meaning and components
Evaluation of Marketing Concepts

2.1
3.
4.
5.
6.
7.
Production, product, selling, marketing, customer and societal concepts.
Environmental Context of Marketing

3.1
Marketing environment: meaning & importance
3.2
Micro environment forces in marketing
3.3
Macro environment forces in marketing
3.4
Marketing environment in Nepal
Market Segmentation and Targeting

4.1
Market segmentation: meaning, benefits and requirements
4.2
Process of market segmentation
4.3
Segmentation variables for consumer and industrial markets.
4.4
Market targeting
4.5
Market segmentation in Nepal
Market Information System

5.1
Meaning and importance of market information system
5.2
Components of marketing information system
5.3
Marketing research process
Buyer Behavior Analysis

6.1
Meaning and importance of buyer behavior
6.2
Stages of consumer buying process
6.3
Factors affecting consumer buying process
6.4
Features of organizational buying behavior
6.5
Factors affecting organizational buying behavior.
Product Decisions
7.1
Product: Meaning, levels, types
7.2
Product life cycle
7.3
Process of new product development
52
8.
9.
10.
7.4
Product line and mix
7.5
Service product
7.6
Branding, packaging, labeling
7.7
Product scenario in Nepal.
Price Decisions
8.1
Price: meaning, importance and objectives
8.2
Methods of price determination
8.3
Pricing policies and strategies
8.4
Pricing scenario in Nepal
Place Decisions (Distribution)

9.1
Place: meaning, importance and objectives
9.2
Channels structures for consumer and industrial products
9.3
Physical distribution: meaning and components.
Promotion Decisions
10.1 Promotion: meaning, objectives
10.2 Promotion mix: meaning and factors affecting it
10.3 Advertising: meaning, importance, objectives, media
10.4 Public Relations: meaning, objectives, methods
10.5 Sales Promotion: meaning, objectives, methods
10.6 Personal selling: meaning, objectives, methods
10.7 Promotion scenario in Nepal
11.
Emerging Concepts in Marketing

11.1 Relationship marketing
11.2 E-commerce
11.3 Strategic alliances
Reference Books:
1.
Philip Kotler and Gary Armstrong - Principles of Marketing. Pearson.
2.
Dr. Govind Ram Agrawal. Fundamentals of Marketing. A Nepalese Perspective - M.K.

Publishers and Distributors.
3.
Williams Stantion, M.S. Etzel and Bruce S. Walker. Fundamentals of Marketing - TaTa
McGraw-Hill Book Co.
53
Paper 7: Income Tax & VAT

(One Paper- Three Hours-100 Marks)
Objectives
Working
The objective of this syllabus is to give candidates an understanding of the basis

concepts of Nepal Income Tax Regulations as an important part of direct taxes
and of Nepal Value Added Tax regulation as an important part of indirect tax in
Nepal.
The syllabus also covers some basic concepts of Indian Income Tax Act so as to provide the candidate
with a comparative study on direct taxes prevailing in Nepal and India.
As a result of the learning related to this syllabus students will be able to:
Recognize the principles governing taxation of income, gain from disposal of assets and liabilities
and conditions of disposals and deemed disposals.
Recognize the basic concepts of charging income tax on various incomes.
Recognize the basic concepts of tax planning.

Detail Course Contents
a.
Part A: Income Tax (60 Marks)

Income Tax Regulations of Nepal
1. Basic concepts
a.
Definitions of:
i.
Terms defined in Section 2 of the Act.
ii.
Terms defined in Rule 2 of the Rules
iii.
Terms defined in various other Sections and Rules of the Act and Rules.
iv.
Meaning and use of various terms used in Act and Rules.
b.
Basis of taxation:
i.
Imposition of tax on persons
ii.
Calculation of tax and rate of tax including schedule 1 of the Act.
c.
Taxable income:
i.
Assessable income
ii.
Taxable income
iii.
Various heads of income.
d.
Tax exemptions and tax concessions
i.
Incomes which are exempted from tax
ii.
Incomes for which tax concessions are allowed.
e.
Quantification, allocation and characterization of amounts:
i.
Quantification
ii.
Characterization of payments under annuities, installments and leases.
iii.
Transfer pricing and other arrangements between associates
iv.
income splitting
v.
General anti-avoidance rules
2. Computation of taxable income
a.
Calculation of income from business:
i.
Components of income from business
ii.
Incomes which do not form part of income from business.
iii.
Deductions allowed from income from business
iv.
Limitations and conditions for a particular deduction
vi.
Schedule 2 of the Act.
CAP-II/Paper 7: Income Tax & VAT
54
(50)
b.
C.
d.
e.
3.
b.
5.
i.
Components of income from employment
ii.
Incomes which are excluded from income from employment
Calculation of income from investment

i.
Components of income from investment
ii.
Incomes which do not form part of income from investment
ii.
Deductions allowed from income from business
iii.
Limitations and conditions for a particular deduction
Deductions allowed from taxable income:

i.
Deduction for donation and gifts
ii.
Deductions for contributions to retirement funds
iii.
Deduction for life insurance premium paid
iv.
Deduction for losses from income from business or investment
v.
Carry forward and carry back of losses for setoff.
vi.
Deductions not allowed
Tax credits:
i.
Medical tax credits
ii.
International taxations
Other relevant matters regarding taxable income

a.
4.
Calculation of income from employment
Tax accounting and timings

i.
Method of tax accounting
ii.
Cash basis of accounting
iii.
Accrued basis of accounting
iv.
Reverse of amounts including bad debts
v.
Averaging inclusions and deductions under long-term contracts.
Calculation of net gains from disposal of assets and liabilities

i.
Classification of assets
ii.
Net gains from assets and liabilities
iii.
Outgoings and incomings from assets and liabilities
iv.
Disposals and deemed disposals of assets and liabilities.
Payment of tax and tax returns

a.
Form, place and time for payment of tax
b.
Withholding tax
i.
Withholding by employers
ii.
Withholding from investment returns and service fees
iii.
Withholding from insurance premiums and contract payments.
iv.
Final withholding payments
c.
Advance payment of tax
d.
Tax returns
i.
Return for advance tax
ii.
Annual tax return
Assessments, appeals and penalties

a.
Tax Assessment
i.
Self assessment
55
b.
c.
ii.
Jeopardy assessments
iii.
Amended assessments
Appeals
i.
Departmental review
ii.
Appeal to Revenue Tribunal
Interest and fines

Interest and fines as per Section 117 to 122.
b.
Income Tax Regulations of India
(10)
Basic concepts
1.
Gaining knowledge about:

i.
Assessment year
ii.
Previous year
iii.
Person and Assessee
iv.
Definition of income under the Income Tax Act
v.
Gross total income
vi.
Total income and its computation
vii. Agricultural income

viii. Casual income
2.
ix.
Capital and revenue receipts
x.
Capital and revenue expenditures
xi.
Method of accounting relevant to computation of income
Residential status and its effect on tax incidents:

i.
Classification of persons as per residential status
ii.
Factors to decide residential status of an individual
ii.
Factors to decide residential status of a Hindu undivided family
iii.
Factors to decide residential status of a firm and association of persons
iv.
Factors to decide residential status of a company
v.
Relationship between residential status and incidence of tax
vi.
Connotation of receipt of income
vii. Connotation of accrual income

viii. Connotation of income deemed to accrue or arise in India.
3.
Income that is exempted from tax

i.
Income exempted from tax under section
ii.
Special provision in respect of newly established undertakings in free trade zone, electronic/
software/hardware technology park and software technology park.
iii.
Special provisions in respect of newly established hundred percent export oriented

undertakings
iv.
Deductions available to export of handmade wooden articles
v.
Exemption in respect of income from property held for charity
vi.
Exemptions on income of a political party
56
Part B: Value Added Tax of Nepal (40 Marks)

1.
Basic concepts
a.
2.
Definitions of:
i.
Terms defined in Section 2 of the Act.
ii.
Terms defined in Rule 2 of the Rules
iii.
Terms defined in various other Sections and Rules of the Act and Rules.
iv.
Meaning and use of various terms used in Act and Rules.
b.
Appointment of tax officer and his/her jurisdiction
c.
Imposition of VAT
i.
Transactions covered by VAT
ii.
Goods and services exempted from tax
iii.
Place and time of supply
iv.
Rate of tax
v.
Conditions for zero rate of tax
vi.
Assessment and collection of tax
Registration and cancellation

a.
b.
Registration
i.
Conditions for compulsory registration
ii.
Threshold for small vendors
iii.
Proxy conditions for compulsory registration
iv.
Voluntary registration
v.
Registration not available
Cancellation of registration
Conditions and procedures for cancellation of registration
3.
Taxable value, tax collections and offsets, refund of tax

a.
Factors determining taxable value

i.
General conditions
ii.
Extra-ordinary conditions
iii.
Taxable value for used goods
iv.
Taxable value for dealers in used goods
b.
Market value concept and its applicability
c.
Tax collection
i.
Registered person has to collect tax
ii.
Tax collection by custom authorities
iii.
Bank guarantees facility available for payment of tax.
iv.
Restriction on unregistered person to collect tax.
57
d.
e.
4.
Offset of tax
i.
Partial tax offset
ii.
Proportionate tax offset
iii.
Tax offset not available
iv.
Conditions of tax offset
Refund of tax:
i.
Under regular conditions
ii.
Under export conditions
iii.
Refund by some specific institutions as per Section 25.
iv.
Limitations on refund
Accounts and records

a. Invoices
b.
i.
Conditions for unregistered person to issue invoices and its contents.
ii.
Conditions for issue of different kinds of tax invoices and their contents.
iii.
Conditions for issue of tax invoices for dealers in used goods.
Accounts and records

i.
Taxpayer duty to keep up-to-date accounts of its transactions
ii.
Types of accounts and records to be kept by a taxpayer and their contents.
iii.
Certification of the accounts and records
iv.
Preservation of the accounts and records.
Reference Books & Acts:

1.
Income Tax; Theory and Practice, Jagdish Agrawal
2.
Students Guide to Income Tax - Dr. Vinod K. Singhania and Monica Singhania.
3.
Income Tax Act, 2058 & Rules, 2059
4.
Value Added Tax, 2052 & Rules, 2053
5.
Relevant Finance Act
58
Annexure-3
Detailed Syllabus of Chartered Accountancy Professional (CAP-III)

Level of Knowledge : Expert
Objectives
: i.
To build on the basic knowledge gained during CAPII, and
ii. To enable the candidates to understand the purpose and context of financial
reporting, to interpret financial statements and other data for the benefits of
users (internal as well as external), to prepare financial statements for limited
liabilities companies and other specialized entities applying national and
international standards and to explain their preparations.

1.
Accounting principles, concepts and theory

a. Fundamental Accounting Concepts and their relevance in preparation of financial statements
b. Moving towards realizable (fair) value concept from conventional historical cost concept of
preparation of financial statements
2.
National and International Accounting and/or International Financial Reporting Standards.

a. Accounting and reporting standards and interpretations (including mandatory, voluntary and
exposure drafts) issued by Nepal Accounting Standards Board and International Accounting
Standards Committee.
b. National and International Accounting Framework and recognition and measurement of elements
of financial statements and significant departure of current corporate practices therefrom.
c. The legitimacy of current accounting practices and its relevance to the users of general purpose
financial statements.
d. Issues and problems associated in general purpose financial reporting with the adoption of
accounting and/or reporting standards.
e. The effect of current business decisions and proposed changes or adoption of accounting and/
or reporting standards.
f.
3.
Comparative study of national and international financial/accounting standards or GAAPs.
Preparation and presentation of financial statements

a. Advanced problems in preparation and presentation of financial statements of limited liabilities
companies, bank and other financial institutions (finance companies, mutual funds, merchant
banker), insurance companies, stock broker and electricity company in accordance withapplicable
national and international standards and relevant acts and rules.
b. Valuation of goodwill and shares
c. Disclosure of
Accounting policies
Segment information
Related parties transactions
Significant ratios (including Earning per Share)
59
CAP-III/Paper 1: Advanced Financial Reporting
Current and deferred taxation
Human Resource Accounting
Corporate Social Reporting
Environmental Accounting
Other as per the relevant acts or rules or directives from regulating authorities.
d. Understanding of recent development in accounting:
4.
Interim and group reporting
Value added statement
Economic value added statement
Preparation of consolidated financial statements
Definitions of subsidiary and controlled companies
Financial issues related to subsidiary and controlled companies for their inclusion and
exclusion like intra-group transactions, fair value adjustments, minority interest
Preparation of consolidated accounts of holding and group companies
Accounting for amalgamation using purchase and pooling of interest methods of accounting.
Preparation of group cash flow statements.
Accounting for foreign currency transactions and entities.
Accounting issues related to corporate restructuring including de-mergers take over and
group chemes.
5.
Analysis and interpretation of financial statements and related information
Appraisal of financial and related information by vertical and horizontal analysis, ratio analysis,
common size statement, cash flow statement.
Appraisal of the impact of changes in accounting policies and the regulatory framework on
shareholders fund.
The assessment of the impact of price level changes and available methods of valuation on
business decisions and performance.
6.
Accounting treatments for specialized transactions
Accounting treatment of transactions under lease, contract, intangible assets, financial

instruments, taxes, business combinations in line with applicable national and international
accounting standards.
Reference Books:
1.
Nepal Accounting Standards (NAS)/Nepal Public Sector Accounting Standards (NPSAS)
2.
3.
Advanced Accounting, R.L. Gupta & M. Radhaswamy, S. Chand & Sons, New Delhi
4.
Advanced Financial Accounting, R.E. Baker, V.C. Lembke & T.E. King, McGraw Hill Book Co.
5.
First Lessons in Financial Reporting - M.P. Vijay Kumar-Snow White Publications Pvt. Ltd.
CAP-III/Paper 1: Advanced Financial Reporting
60


Objectives
: To gain expert knowledge of the advanced issues `involved in financial management

and the features of financial management in the global context.

1.
The Financial System

Introduction, structure of a financial system, functions of financial sector, equilibrium in financial
markets, financial system and economic development, criteria to evaluate financial sector, financial
development: concepts, the technology of the financial system: delegation, credit substitution, pooling,
netting.
2.
Financial Intermediaries
Depository institutions: commercial banks, near banks (including thrifts, finance companies and others),
insurance, pension funds and mutual funds; their functions, issues and risks associated with their
management; the economics of regulation of financial services, structure of Nepalese financial markets
and their regulation.
3.
Capital Markets
Understanding securities markets; market for government securities; money market: evolution, growth,
money market and the economy; capital market: evolution, long-term finance and related issues,
market for new issues, secondary market; derivatives market: futures, options and swaps
4.
Valuation of Assets, Shares and Companies

Introduction, the valuation problem, valuing a company using published accounts, valuing shares:
the dividend valuation model, valuing the earnings stream, using the DCF approach, shareholder
value analysis, valuation of unquoted companies.
5.
Investment Decisions and Strategies

Cost of capital, advanced concepts of capital budgeting, cash flow analysis using various methods,
ranking mutually exclusive projects, investment evaluation and capital rationing, applications in project
appraisal: incremental cash flow analysis, replacement decisions, unequal lives, risk and uncertainty,
effects of inflation.
6.
International Financial Management

Financial management in a global context: the finance function and emerging challenges, the global
financial markets; nature and management of exposure and risk: exchange rate and interest rate
volatility, classification of foreign exchange exposure and risk, interest rate exposure and risk; balance
of payments: basics, valuation, components; global financial markets and interest rates: domestic
and offshore markets, overview of money market instruments; short-term borrowing in global markets;
long-term borrowing in the global markets; international project appraisal.
61 CAP-III/Paper 2: Advanced Financial Management
7.
Foreign Exchange Management

Determination of exchange rates; international monetary system; the foreign exchange market:
organization, the spot market, the forward market, interest rate parity; currencies, futures and options
markets; foreign exchange risk management: measuring and managing accounting exposure,
measuring and managing economic exposure.
8.
Special Topics
Lease financing; hybrid financing: preferred stock, warrants, and convertibles derivatives and risk
management; bankruptcy, reorganization, and liquidation; mergers; leveraged buy-outs; multinational
financial management
Reference Books:
1.
Kohn, Meir: Financial Institutions and Markets, Tata McGraw Hill Publishing Company Ltd.
2.
Brigham, Eugene F; Ehrhardt Michael C: Financial Management Theory and Practice, Thomson
South-Western
3.
Moyer, Charles R; Mcguigan James R; Kretlow, William J: Contemporary Financial Management,

Thomson South-Western
4.
Shapiro, Alan C: Multinational Financial Management, John Wiley & Sons Inc.
5.
Apte, PG: International Financial Management, Tata McGraw Hill Publishing Company Ltd.
CAP-III/Paper 2: Advanced Financial Management
62

(One paper-Three Hours-100 Marks)
Level of Knowledge
Expert
Objectives
To develop candidates capability in performing and reporting on audit and

assurance to increase reliability of financial and non-financial information.
To develop candidates capability in identifying significant risks and apply

risk assessment tools to the engagement
To develop candidates capability to identify, gather and document evidence

and assess its sufficiency and appropriateness for an audit engagement.
To ensure that candidates have acquired the competence to provide

comprehensive audit and business assurance services, by testing their
ability to integrate and apply their knowledge of auditing to realistic problems.

1.
Legal Compliance
Provisions regarding considerations governing an audit, appointment, reappointment, resignation
and removal of the auditors, duties and rights of the auditor and professional responsibilities and
misconduct, conflict of interest, fraud and error, integrity, objectivity, independence and confidentiality
of information obtained, expectation gap, professional indemnity insurance, insider dealing and
professional liabilities, contained in the following legal documents and other pronouncements:
Nepal Chartered Accountants Act/Rules
Code of Conduct issued by Institute and IFAC
Companies Act 2063 and other Relevant Acts & Regulations
Case studies on practical aspects of implementation of these documents.

2.
Practice Management
a. Thorough understanding of all Nepal Standards on Auditing and Nepal Accounting Standards
(mandatory, voluntary and exposure drafts) and guidance notes issued, including preface to
auditing standards and framework of accounting. Case studies on practical aspects of
implementation of the standards.
b. Sufficient knowledge of International Standards on Auditing and International Financial Reporting
Standards
c. General awareness of opinions issued by Expert Advisory Committee and interpretations
3.
Audit Process
4.
a. Audit strategy and planning

Obtaining of knowledge of business and significant business risk, using it to develop overall
audit approach and plan
Considerations in using the work of internal auditor, experts, another auditor and evaluation
of corporate governance issues especially the roles of audit committee.
Evaluation of accounting and internal control systems to determine audit risks and its
components Inherent, Control and Detection risks. Use the result of risk assessment in
63
CAP-III/Paper 3: Advanced Audit and Assurance
order to keep audit risk to an acceptably low level. Review of appropriateness of accounting
policies and their consistent application. Disclosures in financial statements with respect to
recognition and measurement of assets, liabilities and revenue, contingent liabilities and
commitments, related parties transactions.
Develop overall audit plan considering the materiality and risk assessments, going concern
and subsequent events.
Develop detailed audit programme for each elements of financial statement.
Determine audit time schedule and allocation of jobs to audit team members
Collection of evidence keeping in view reliability, relevance and appropriateness, documentation,
management representation and confidentiality.
Institute quality control of audit work by delegation of duties, supervision and review of work
and working papers prepared by audit staff.
Security issues in computerized systems as stated in IFAC guidelines on Managing Security
of Information and Information Security Governance Guidance
Organizing and managing complex audit situations, including group audits, joint audits,
multilocational engagements, special purpose audits including due diligence, related service
engagements, reviews, agreed upon procedures and compilation.
Maintenance and updating of permanent audit files.
b. Audit techniques and procedures
Selective verification, statistical sampling, comparison, averaging, ratio analysis, time-series
analysis.
Special audit procedures including observation of physical verification of assets, direct balance
circularization of receivables and payables.
Selecting one or more tests of controls and substantive procedures from inspection,
observation, enquiry and computations to obtain reliable and appropriate audit evidence.
Drawing of conclusions regarding financial statements at assertions level and financial
statement as a whole on the basis of evidence collected.
c. Audit Reporting
Types of audit reports - clean, qualified, adverse and disclaimer of opinion, qualifications
quantification and appropriate wording, notes to account, distinction between notes to
account and qualificatory notes
Evaluating the effects on reporting responsibilities of an auditor resulting from pending legal
action, fraud and error, non-compliance with laws and regulations, taxation and tax related
contingencies and post balance sheet events.
Review of financial statements including comparative information, adequacy of disclosures,
management representation regarding significant matters.
Distinction between reports and certification
Preparation of management letters, internal control memorandum stating clear and concise
statement of facts, their potential effects and recommendations for action relevant to the
needs and nature of the entity.
64
5.
Special Audits
a.
Knowledge of non-statutory audits management audit, cost audit, tax audit, energy audit,
b.
Audit of specialized enterprises Banks, Finance Companies, Insurance Companies Special
environment audit, public audit, performance audit - concept and drawing an audit programme.
issues and consideration and requirements of regulatory authorities.
c.
Audit of public sector, government, local bodies, directives issued by the office of the auditor
general to the auditors of public sector enterprises, consideration of propriety and transparency
of public spending and reporting responsibilities.
6.
Corporate Governance and Audit Committee

Meaning and relevance of corporate governance
Responsibility of management in preparation of financial statements and implementation of sound
accounting and internal control systems
Role of audit committee in fair presentation of financial statements and good governance.
7.
Audit under computerized environment

Computer auditing, concept and specific issues and problems related to EDP audit
Need for review of internal control especially procedures controls and facility controls,
Techniques of audit of EDP output
Use of computers for internal and management audit purposes,
Computer assisted audit
Role of auditor at the time of setting up the computer system.
Reference Books & Materials:

1.
Preface, Glossary of Terms and NSA issued by Auditing Standards Board of Nepal.
2.
Code of Ethics issued by the Institute of Chartered Accountants of Nepal and IFAC
3.
Compendium of Guidance Notes issued by Auditing Standards Board of Nepal
4.
International Financial Reporting Standards and Nepal Accounting Standards
5.
A Handbook of Practical Auditing by B.N. Tandon, S. Sudharsanam and S. Sundharabahu.
6.
Advanced Auditing & Investigation, Emile Woolf et al. McDonalds & Evans, U.K.
7.
Contemporary Auditing, Kamal Gupta, Tata McGraw Hill Book Co. Ltd.
65

(One Paper- Three Hours-100 marks)
Level of Knowledge : Expert Knowledge
Objectives
1.
2.
3.
4.
: To gain the Expert Knowledge of Nepalese Corporate and Other Laws.
Companies Act, 2063

1.1
Incorporation of Company, Lifting the Corporate Veil
1.2
Prospectus and Memorandum, Shares and Debenture, General meeting and Board of Directors.
1.3
Accounts and Records of the Company
1.4
Accounts and Audit
1.5
Liability of Company and Shareholders
1.6
Winding up and Liquidation of Company
1.7
Offence, Punishment and Legal Proceedings
1.8
Some Judicial Decisions Relating to Company
Securities Exchange Act, 2063

2.1
Transaction of Securities and Securities Exchange market
2.2
Security Exchange Board
2.3
Securities Exchange Professionals
2.4
Offences, Penalties and Legal Proceedings
2.5
Security Exchange Act, 2063 and Regulation.
Banking Laws
3.1
Relationship of Government with Central Bank
3.2
Relationship of Central bank with other Banks (Commercial and Development)
3.3
Functions and Powers of the Central Bank.
3.4
Monetary Management of Nepal
3.5
Offences, Penalties and Judicial Proceedings
3.6
Foreign Exchange Management
3.7
Foreign Exchange Regulation Act, 2019
3.8
Foreign Exchange Offences and Penalties
3.9
Nepalese Acts Relating to the Central and other Banks (NRB Act & BAFIA)
Industrial Laws
4.1
Industrialization and Concept of Industrial Environment
4.2
Industrial Promotion Board
4.3
Licensing, Registration and Penalties
4.4
Concept of Foreign Investment and Technology Transfer
4.5
Incentives for Foreign Investor
4.6
Dispute Settlement Mechanism and Procedure
4.7
Foreign Investment and Technology Transfer Act, 2049 and Industrial Enterprises Act, 2049
CAP-III/Paper 4: Corporate Laws
66
5.
6.
7.
8.
9.
10.
Labor and Bonus Laws

5.1
Industrial Relations
5.2
Workers Participation in Management
5.3
Trade Unions
5.4
Collective Bargaining
5.5
Wages and Wages Fixing Mechanism
5.6
Ethical Code and Industrial Relations
5.7
Industrial Conflicts and Settlement (Conciliation, Arbitration and Adjudication)
5.8
Labor Act, 2048 and Rules 2049
5.9
Bonus Distribution: Condition and Procedure
5.10
Labor Dispute Settlement Mechanism and Procedure
5.11
Bonus Act, 2030 and Rules 2038
Law of Contract
6.1
Performance of Contractual Liability
6.2
Privity of Contract
6.3
Breach of Contract and its Remedies
6.4
Relevant provisions of Nepalese Contract Act, 2056
Insurance Laws
7.1
Principles of Insurance and Insurable Interest
7.2
Insurer (Registration, Profession and Duties)
7.3
Insurance Board
7.4
Insurance Offence, Penalties and Legal Proceedings
7.5
Insurance Act, 2049
Audit Laws
8.1
Constitutional Provisions of Auditing
8.2
Governmental Audit and Office of the Auditor General
8.3
Audit of the Government, wholly & partly Government Owned Undertakings.
8.4
Modes of Auditing and Reporting
8.5
Related Constitutional Provisions and Audit Act, 2048
Privatization Laws
9.1
Concept of Free Economy and Privatization
9.2
Mode and Process of Privatization and Nepalese Practice
9.3
Dispute Settlement Mechanism
9.4
Privatization Act, 2050
Laws Relating to International Financial Transactions

10.1
Concept of International Financial Transactions
10.2
Process of taking the Permission for International Financial Transactions
10.3
Types of International Financial Transactions in Nepal
10.4
International Financial Transactions Act, 2054
67
11.
12.
13.
14.
15.
Laws Relating to Co-operative Societies

11.1
Concept of Co-operatives
11.2
Co-operatives and Financial Transactions
11.3
Wind-up and Liquidation of Co-operatives
11.4
Co-operative Offences and Penalties
11.5
Co-operative Act, 2048 and Regulation.
Financial Mediation Laws

12.1
Concept of Financial Mediation
12.2
Ethical Code of Mediator
12.3
Financial Mediation Offences and Penalties
12.4
Financial Mediator Act, 2058
WTO and Nepalese Laws

13.1
WTO and its Membership
13.2
Function and Role of WTO
13.3
Concept of Financial Bill
13.4
Legislative Process of Nepal
13.5
WTO Parameters and Nepalese Laws.
Nepal Chartered Accountants Act, 2053 & Regulation 2061

14.1
About the Institute, laws enactment and establishment
14.2
Composition, function and duties of the Council
14.3
Accounting Standards Board and Auditing Standards Board and their functions
14.4
Examination, Qualifications and Licensing of Chartered Accountants
14.5
Membership, types and renewal
14.6
Disciplinary Committee and its functions
14.7
Code of Ethics
14.8
Relevent Provisions of Nepal Chartered Accountants Act, 2053 and Regulation 2061
Insolvency Act 2063 and Secured Transaction Act 2063.
Reference Books:
1.
Amit Bajaj, Puneet Bajaj, Law of Contract
2.
Ashok K Bagrial, Company Law, 11th Edition
3.
Avtar Singh, Company Law (11th Edition, 1996), Eastern Book Company, Lucknow
4.
Bharat Raj Uprety, Company Kanoon
5.
Ellinger and Lommicka, Modern Banking Law, 2nd Edition
6.
Gyaindra Bahadur Shrestha, Byawasayako Kanooni Batabaran
7.
J. Beatson, Law of Contract, 28th Edition
8.
John Birds, Modern Insurance Law, 4th Edition
9.
Kashi Raj Dahal, Industrial Jurisprudence
68
10.
M N Mishra, Insurance Principles and Practice, 6th Edition
11.
M.C Kuchhal, Mercantile Law, Sixth Edition
12.
M.C. Shukla, A manual of Mercantile Law
13.
Madhav Aryal, Banking Kanoon
14.
Paul L. Davies, Principles of Modern Company Law
15.
Ram Prasad Shrestha, Legal Environment of Business
16.
Rishikesh Wagle and Kirti Bilash Pant, Legal Environment of Business in Nepal
17.
Simon Honeyball and John Bowers, Labour Law, 7th Edition
18.
Sir John Smith, The Law of Contract
19.
Nepal Law Review, Nepal Law Campus
20.
Related Acts & Regulations
69

Objective
To high light the role of professional accountant as manager and evaluator
To identify information requirement of an organization, distinguish among the
of information system.
different types of information systems to recommend specific systems for
organizational requirements.
To assist in the analysis, design and implementation of information systems.
To learn about the management, control and evaluation of IT infrastructure

as well as information systems assets.

1.
2.
Organizational Management and Information System

1.1
Revision of organization and management level
1.2
Computer based Management Information System: definition and functional model
1.3
Business perspective of information system
Different Types of Information System Case Study

2.1
Types of Information System according to organizational hierarchy: OperationalLevel System,

Knowledge Level System, Management Level System, and Strategic Level System.
2.2
Types of Information System to support of organization:

2.2.1 Transaction Processing System: Introduction, Data Entry and Validation, Storage and
MasterFile Update, Error Prevention and Detection, Report Generation
2.2.2 Knowledge work and office system: Functions and Tools
2.2.3 Management Information System
2.2.4 Decision Support System: Goals and Applications, Components and Tools
2.2.5 Executive Support System or Executive Information System: Introduction, Sources of
ESS, Roles and Characteristics
2.2.6 Expert Support System: Artificial Intelligence, Neural Network, Fuzzy logic, Genetic
Algorithm
3.
2.3
Sales and Marketing Information System: Model, Inputs and Out puts
2.4
Manufacturing and Production Information System: Model, Inputs and Out puts
2.5
Finance and Accounting Information System: Model, Inputs and Out puts
2.6
Human Resource Information System: Model, Inputs and Out puts, Challenge and Benefits
Information Technology Strategy and Trends

3.1
Enterprise Strategy and Vision

3.1.1 Internal and External Business Issues: Position and Business Focus of the Entity,
Relationship of IT Strategy and Business Strateg
CAP-III/Paper 5: Management Information and Control System
70
3.1.2 Factors Influencing IT: Flexibility of Changes in Technology and Business, Budget, Speed
to the Market, Legal and Regulatory Body, Business Units
3.2 Assess Current and Future IT Environments:
3.2.1 Current Status of IT: Hardware, Software, Peoples, Procedures and data
3.2.2 IT Risk and Opportunity: Trends and Issues of Current Environments Business and IT
alignment, Compliance with Service Level Agreements, Stake Holders Attitude
3.3 IT Strategy Planning: Envision of Future Status, Aligning Future IT Strategy with Business
Strategy
4.
System Development Life Cycle

4.1 Definition, Stages of System Development: Requirement, Feasibility Study, Analysis, Design,
Testing, Implementation, Support, Documentation
4.2 Underlying Principles of System Development
4.3 Phases of System Development: Survey Phase, Study Phase, Definition Phase, Configuration
Phase, Procurement Phase, Design Phase, Construction Phase and Delivery Phase
4.4 Computer Aided System Engineering (CASE)
4.5 Models of System Development: Water Fall Model, Spiral Model
5.
System Analysis and Design, Case Study

5.1 Strategies for System Analysis and Problem Solving: Modern Structured Analysis, Information
Engineering, Prototyping: Joint Application Development, and Rapid Application Development,
Object Oriented Analysis
5.2 Concept of Data and Process modeling: Data Flow Diagram, Entity Relationship Diagram
5.3 Strategies for System Design: Modern Structured Design, Information Engineering, Prototyping,
Object Oriented Design
5.4 Input Design: Batch and Online Input methods, System User issues, Graphical User Interface
Issues for Input Design
5.5 Out Put Design: Types of Output, Systems User Interface for out put Design,
6.
Roles and Functions of IT Professionals

6.1 User Level Role
6.2 Manager Level Roles: Manage IT Organization, Formulate IT Strategy, IT Operation Management,
Maintain Financial Control, Manage Existing System and Changes
6.3 Designer Level Roles: Analysis and Evaluation of System, Project Planning,
6.4 Evaluator and Auditor Level: Plan System Evaluation, Evaluate System, Reporting
6.5 Advisor and Consultant Level: IT Strategic Planning, IS Management, Determining System
Architecture, System Reliability Test
6.6 Understanding Ethical and Social Issues Related with Systems: A model for Thinking about
ethical, social and political issues, Ethics in an Information Society, Moral Dimensions of Information
Systems
7.
E-Commerce and Inter organizational Systems Case Study

7.1 Introduction to E-commerce: Scope, technology and process
7.2 Features of E-Commerce: Ubiquity, Global Reach, Universal Standards, Richness, Interactivity,
Information Density, Personalization
71
8.
9.
10.
7.3
Categories of E-commerce: B2B, B2C, C2C
7.4
Electronic payment Process: Web Payment Process, Electronic Fund Transfer, Micro payment
Systems, Secure Electronics Payments
E-Business Enabling Software Packages Case Study

8.1
Enterprises Resource Planning (ERP): Introduction, Model, Functional Areas or Modules,

Implementations, Benefits and Challenge
8.2
Supply Chain Management: Introduction (SCM), Model, Reverse Logistic, Supply Chain Planning
and Execution System
8.3
Sales Force Automation (SFA): Introduction and Model
8.4
Customer Relationship Management (CRM): Introduction to Computer based CRM, Models,

Operations, Challenged and Benefits
Information System Security, Protection and Control

9.1
System Vulnerability and Abuse: Why system are Vulnerable, Hackers and Computer Viruses,
Disaster, Security and Errors
9.2
System Quality Problems: Software and Data, Bugs and Defects, Maintenance Nightmare,
Data Quality Problems
9.3
Creating a Control Environment: Creating Control frame Work, Layers of Control: Operating
System Control, Data Management Control, Organization and Personnel Control, Network
Control, System Development and Maintenance Control
9.4
Protection of Digital Network: High Availability of Computing, Internet Security, Security and
Electronic Commerce
9.5
Evaluation of IS: Criterion for Evaluation and Risk, Computer Assisted Audit Techniques (CAAT)
9.6
Development of Control Structure: Cost and Benefits, Role of Auditing in Control Process.
Disaster Recovery and Business Continuity Planning

10.1 Disasters Recovery Planning
10.2 Data Back Up and Recovery: RAID, Mirroring, Clustering
10.3 High Availability Planning of Servers
Reference Books:
1.
James A. OBrien, Management Information System, Managing Information Technology in the

E-Business Enterprises, Tata Mc Graw Hill
2.
Jeffrey L. Whitten, Lonnie D. Bentley, System Analysis and Design Methods, Tata Mc Graw
Hill
3.
Kenneth C Loudon, Jane P Loudon, Management Information Systems-Managing the Digital

Firm, Prentice Hall, 2003
72

(One Paper- Two sections-Three hours-100 Marks)
Level of Knowledge
Expert
Objectives
The main objective of this course is to provide the expert knowledge of direct
and indirect taxes as well as to make the students to acquire the ability to
apply the expert knowledge in actual practice.
Part A: Direct Tax- Nepalese Income Tax
1.
(50 Marks)
Terms, basis of tax, calculation of incomes, tax accounting and timing

(i) Definitions: retirement contribution, payment, retirement fund, final withholding payment, payment
to individual/natural person, entity, company, resident and non-resident person, relatives, tax
assessment, turnover, business assets, non business taxable assets, depreciable assets, exempt
institution, long term contract, disposal, lease, rent, vested ownership, market value, profit
distribution, employment, royalty, investment, investment insurance, trading stock, foreign income
tax, permanent establishment (PE), foreign PE, relevant person, adjustable taxable income,
approved retirement fund, service fee, beneficiary.
(ii) Basis of tax: Imposition, calculation of tax, tax rates, taxable income, assessable income and
income head classification, tax exemptions and concessions; exempt amounts, business
exemptions and privileges, application for exemptions, entity exempt by advance ruling, submission
of financial statement by exempted organisation.
(iii) Sources of incomes and total incomes: Income from business, employment and investment,
total assessable income.
(iv) Deductions, loss adjustments and reductions: Averaging inclusions and deductions under
long-term contracts, deductions not allowed, reductions
(v) Methods of tax accounting: cash basis, accrual basis and hybrid accounting, reverse of amounts
including bad debts,
(vi) Computation of incomes, tax, interest and fines.
2.
Quantification and characterization, Computation of net gains and losses from assets and
liabilities
(i) Quantification of amounts and in rupees, indirect payments,
(ii) Jointly owned investments,
(iii) Characterisations: Compensation payments; payments under annuities, Installments sales,
and finance leases
(iv) Transfer pricing, other arrangements and income splitting
(v) General anti-avoidance rule
(vi) Net gains and losses, outgoings and net outgoings, incomings and net incomings, disposal of
an asset or liability, disposal with retention of asset or liability, disposal under installment sale
or finance lease, voluntary disposal.
(vii) Transfer of assets to spouse or former spouse, transfer of assets on death, transfer between
associates and non market transfers, disposal by merger and by splitting.
(viii)Apportionment of outgoings and incomings.
73
CAP-III/Paper 6: Advanced Taxation
3.
Special Provisions, Depreciation provisions

(i) For Individuals: Couple, tax credit exemptions, standard deductions, allowances (remote area
allowance, pension), tax rates, medical cost and tax credit,
(ii) For Entities: Tax principles, distributions, dividend taxation, entity and beneficiary, change in
control, allowances, tax rates (including schedule dividend) not to be included under entity income.
(iii) For Banking & Insurance business: Treatment as separate business, general insurance
business, investment insurance business, gain from investment insurance, carry back of losses,
tax rates.
(iv) For Retirement Savings: Approval for fund, taxation of funds, treatment of retirement payments,
and limit of retirement contribution.
(v) Depreciation: Allowances, classification and pooling, computation rates, disposal of depreciable
assets, additional depreciation.
4.
Administration and Documentation Administration, Withholding and Payments of Tax

(i) Administration Tax Authorities: tax payers right, Advance rating, public circulars, public
circulars, International agreements, permanent account number.
(ii) Documentation: Form of documentation, service of documents, defective documents.
(iii) Tax withholding: By Employers, from investment and service fee payments, contract payments,
final withholding, and tax credit or tax adjustment.
(iv) Payment of Tax: Time and mode of payment, Installments, Proof tax payment
5.
Returns and Assessments, Collection, Remission and refund

(i) Returns: Time of return of incomes, extension of time of return, return not required estimated
return.
(ii) Assessments: Self assessment, jeopardy assessment and amended assessment, assessments
order & notices.
(iii) Collection: Preference for tax payable by withholding, claim over assets, auction of assets,
prohibition order, liquidities of officers, recovery from recover and agent, suit filing.
(iv) Remission and Refund: Remission by Government, refund & set off and its procedure.
6.
Legal Remedies, Interest, Fees, Penalties Offences

(i) Administrative Review: Decisions, procedures, application to object the review.
(ii) Appeal: Appeal to the Revenue Tribunal.
(iii) Interest: Under payment of installments, failure to pay tax, failure to pay with deposit withholding
tax.
(iv) Fees: For failure to maintain documents, for failure to file return, for failure to making false
document and aiding and obtains, assessments of interest and fees.
(v) Penalties: For failure to pay tax, to authorized and unauthorized person, to accomplice, payment
of penalties.
(vi) Offence: For misleading statements, for obstructing or using inappropriate influence.
7.
International Taxation, Tax Settlement Commission, Circulars

(i) Sources: Incomes, gains, losses and payments.
(ii) Entities and Establishments: Foreign permanent establishment, controlled foreign entities.
(iii) Taxation: Non-residents (service providers) related to shipping, air transport or telecommunication,
foreign tax credit.
(iv) The Tax Settlement Commission: Formation, jurisdiction and role in revenue collection.
(v) Circulars and Advance Rulings: Issued by IRD in different times.
74
Part B: Indirect Taxes

1.
2.
(50 Marks)
Excise Act, 2058 and Excise Rules 2059

(i)
Concept of Excise and excise Duty, History of Excise Duty in Nepal in brief.
(ii)
Scope and Objectives of excise Act, 2058
(iii)
Terms; goods, service, institution (Pratisthan), License, license holder, production, producer,
person, Factory price, price, import, invoice.
(iv)
Excisable products, exemption of excise, collection of excise, pricing of excisable products,

obtaining and termination of license, renew of license, excise duties and fees, special provisions
for cigarettes, Bidi, alcoholic (madira) and molasses, conditions related to seize, possession
and arrest.
(v)
Provisions of self issue and physical control system, recovery ratios.
(vi)
Penalties, administrative review and appeal.
Value Added Tax Act, 2052 and Rules 2053

(a)
Introduction, coverage and administration

(i)
Introduction of VAT in Nepal,
(ii)
Spirit of preamble VAT Act, Terms used; Service, Supply, Return, Import, Export, Market
price, person, registrant, TPIN, Supplier, value addition.
(iii) Coverage: Taxable activities, time of place of supply, tax rate, Zero rated areas, exempted
goods and services, Treatment of negative value addition, Capital goods, threshold,
determination of market price, and treatment of reconditioned goods, discount and gifts,
importation under bank guarantee.
(iv) Tax Administration: Registration, tax invoicing, Accounting, Return filing, Tax Assessments,
conditions for assessing by tax officer, Collection/payments, Tax credit; full credit, partial
credit, proportionate credit, Refunds, Tax audit and investigation, suspension of business
transaction.
(b)
Tax Authorities, revision, appeal, fees and interest

(i) Tax Authorities and Rights and duties of Taxpayers,
(ii) Administrative Revision and Appeal to Revenue Tribunal.
(iii) Additional Fees and Interests, Offences and Penalties.
3.
Customs Act 2064 and Rules 2064

(i)
Scope and objectives of Customs Act, Terms: Export, import, customs duty, chief of
customs, customs officer, customs area, pragyapan patra, demurrage, unauthorized and
illegal import and export, customs facility, facility in duty, under invoicing, classification
of goods for customs purpose.
(ii)
Import and export procedures, Documents required for export and import, determination
of duty, valuation: procedure and methods in practice, post clearance audit.
(iii)
Charging of different duties and charges in customs point,
(iv)
Provisions regarding Jhitigunta, accompanied and unaccompanied goods.
(v)
Import under Duty Refundable Procedure (DRP) and inbond system, Bonded warehouse
system, Bank guarantee and the provision of re-export.
75
(vi) Finance act and related schedule.

(vii) Circulars relating to specific acts issued by Department of Customs.
Reference Materials & Books:

1.
Agrawal Jagadish, Income Tax, Theory and Practice, Buddha Academic Publishers and Distributors
Pvt, Ltd. Kathmandu, Nepal
2.
Adhikari, Chandra Mani Ph-D, Taxation in Nepal, Pairavi Publication, Kathmandu.
3.
Income Tax Act, 2058 & Rule, 2059
4.
Tax Settlement Commission Act, 2031
5.
Publications of Inland Revenue Department.
6.
Adhikari, Chandra Mani, VAT in Nepal, Theory and Practice, Pairavi Publication, Kathmandu.
7.
Adhikari, Chandra Mani, Karko Sathi, Makalu Books and Stationers, Kathmandu.
8.
Shrestha, Shambhu Man, An Introduction to VAT, Himalayan Book Stall, Kathmandu.
9.
Khadka, Rup, VAT in Nepal, 2001, UBSPD, Publisherss and Distributors Ltd, India.
10.
Excise Act, 2058 & Rules, 2059
11.
Circulars Issued by IRD in different times.
12.
Value Added Tax Act, 2052 & Rules 2053
13.
Circulars and publications of Inland Revenue Department.
14.
Customs Act 2064 & Rules 2064
15.
Customs Manuals, 2060 Department of Customs
16.
Circulars Issued by Department of Customs.
76

Objectives
: i.
To understand cost accounting in relation to management functions.
ii. To provide knowledge of using costing data for decision making and control
and understanding of emerging Modern Cost Management Concepts and
techniques of performance appraisal and operational research.

1.
Cost concepts and objectives of Costing systems

1.1. Introduction
1.2. Cost Classification
1.3. Cost Analysis
1.4. Costing System
1.5. Inventory Valuation
1.6. Data Base for Operational Control and Decision Making
1.7. Cost Concept in Decision Making
1.8. Application of Incremental/Differential Cost Techniques in managerial decision
2.
Marginal Costing and Decision making problems

2.1. Theory of Marginal Costing
2.2. Ascertainment of Marginal Cost
2.3. Advantages and limitations of Marginal Costing
2.4. Marginal Cost Equation
2.5. Important factors in Marginal Costing decisions
2.6. Pricing Decisions under special circumstances
2.7. Decision making
3.
Standard Costing and Variance analysis

3.1. Definition
3.2. Types of Standards
3.3. Setting up of standards
3.4. Standard product cost sheet
3.5. Advantages and Criticism of Standard Costing
3.6. Application of Standard Costing
3.7. Control through Variance Analysis
3.8. Computation of Variances
3.9. Reporting of Variances
3.10. Disposal of variances
3.11. Accounting procedure for Standard Cost
3.12. Disposition of Variances
77
CAP-III/Paper 7: Advanced Cost and Management Accounting
4.
Budget & Budgetary Control

4.1. Budgetary Control System
4.2. Types of Budgets
4.3. Preparation of Budgets
4.4. Budget Ratios
4.5. Causes of difference with actual performance
4.6. Zero Based Budgeting
4.7. Performance Budgeting
4.8. Balanced Score Card
4.9. Benchmarking
5.
Management Control System and Responsibility Accounting

5.1. Responsibility Accounting
5.2. Decentralized Divisional Control
5.3. Tools of Control
5.4. Evaluation of performance
5.5. Performance budgeting
5.6. Reporting on performance
6.
Activity Based Cost (ABC) Management

6.1. Meaning and Definition
6.2. Stages in Activity Based Costing
6.3. Purposes and Benefits of Activity Based Costing
6.4. Installation and Operation of Activity Based Costing System
6.5. Activity Based Cost Management
6.6. Difference between ABC and ABM
7.
Costing of Service Sector

7.1. Main characteristics of service sector
7.2. Collection of costing data
7.3. Costing Methods used
7.4. Pricing by Service Sector
8.
Pricing Strategies
8.1. Pricing of finished products
8.2. Theory of price
8.3. Pricing Policy
8.4. Principles of Product Pricing
8.5. New Product Pricing
8.6. Pricing Strategies
8.7. Pareto Analysis
8.8. Transfer Pricing
78
9.
Just-in-time approach, Material requirement planning, Enterprise Resource planning, Total

Quality Management and Theory of Constraints
9.1. Just in time approach
9.1.1. Meaning
9.1.2. Impact of Just-in-time systems
9.1.3. Performance measurement
9.1.4. Back flushing in a just-in-time system
9.2. Material Requirement Planning (MRP)
9.2.1. Meaning and Purpose
9.2.2. Data requirements to operate MRP System
9.2.3. Methods of Operation
9.2.4. Pre-requisite for successful operation of MRP System
9.3. Enterprise Resource Planning (ERP)
9.3.1. Meaning and Features of ERP
9.3.2. Benefits of ERP
9.3.3. Reasons for implementation of ERP by companies
9.4. Total Quality Management (TQM)
9.4.1. Introduction
9.4.2. Operationalizing TQM
9.4.3. Six Cs of TQM
9.4.4. Overcoming TQM paralysis
9.4.5. Control: The missing link of TQM
9.5. Theory of Constraints
10.
Working Capital management

10.1. Theory of Working Capital Management
10.2. Planning of Working Capital
10.3. Working Capital Financing
11.
Quantitative Techniques
11.1. Linear Programming
11.1.1. Introduction
11.1.2. Graphical Method
11.1.3. Trial and Error Method of solving Linear Programming Problem
11.1.4. The Simplex Method
11.1.5. Marginal Value of a Resource
11.1.6. Practical Application of Linear Programming
11.1.7. Limitation of Linear Programming
79
11.2. Transportation Problems

11.2.2. Methods of finding initial solution to transportation problem
11.2.3. Optimality Test
11.2.4. Special Cases
11.2.5. Maximization Transportation Problem
11.2.6. Prohibited Routes
11.3. Assignment Problems
11.3.2. The Assignment Algorithm
11.3.3. Unbalanced Assignment Problems
11.4. Network Planning PERT/CPM
11.4.1. General Framework of PERT/CPM
11.4.2. Advantages of Critical Path Analysis
11.4.3. Fundamentals of CPA Network
11.4.4. Critical Path Analysis
11.4.5. Probability of achieving completion date
11.4.6. Comments on assumptions of PERT/CPM
11.4.7. Distinction between CPM and PERT
11.4.8. Updating the Network
11.4.9. Project Crashing
11.4.10. Resource Smoothing
11.4.11. Resource Levelling
11.5. Simulation
11.5.2. Monte Carlo Simulation
11.5.3. Simulation and Inventory Control
11.6. Learning Curve theory
11.6.2. Distinctive features of Learning Curve Theory in manufacturing environment
11.6.3. The Learning Curve Ratio
11.6.4. Learning Curve Equation
11.6.5. Learning Curve Application
11.6.6. Limitation of Learning Curve Theory
Reference Books:
1.
Advance Cost Accounting V.K. Saxena & C.D. Vashist
2.
Financial Management M. Y. Khan & P. K. Jain
3.
Management & Cost Accounting-Colin Dury - International Thomson Business Press
4.
Quantitative Techniques in Management - ND Vohra - Tata Mc Graw Hill
5.
Cost Management, B. Saravana Prasath, C. Sitharaman & Co., Chennai
80

Expert
Objectives
To develop knowledge and understanding of process, concepts and techniques

of strategic management and decision making analysis relevant to a professional
accountant.
To develop skills to formulate and implement strategies and analysis decisions

in the Nepalese context.

1.
Concept of Strategy
1.1 Concept and characteristics of strategy
1.2 Levels of strategy
1.3 Strategic planning
1.4 Relevance of strategic thinking for professional accountant.
2.
Strategic Management
2.1 Concept, characteristics and importance of strategic management
2.2 Process of strategic management
2.3 Elements of strategic management
3.
Environment Analysis
3.1 Meaning and nature of environment
3.2 Elements of environment
3.3 Objective setting
3.4 SWOT analysis
3.5 Environment analysis process
4.
Internal Analysis
4.1 Concept and process of internal analysis
4.2 Areas of internal analysis
4.3 Methods of internal analysis
4.4 Assessment of internal resources and core competencies
4.5 Strategic advantage
5.
Strategic options
5.1 Concept of strategic options
5.2 Strategic alternative at corporate and business levels
5.3 Directions and methods for strategy development
81
CAP-III/Paper 8: Strategic Management and Decision Making Analysis
6.
Strategy Formulation and Strategic Choice

6.1 Process of strategy formulation
6.2 Evaluation of strategic alternatives
6.3 Portfolio analysis
6.4 Risk analysis
6.5 Strategic choice
7.
Strategy Implementation and Evaluation

7.1 Concept and process of strategy implementation
7.2 Designing structure
7.3 Resource planning
7.4 Management system
7.5 Strategy evaluation
7.6 Strategic change management
8.
Role of Chief Executive in Strategic Management

8.1 Role in formulation of strategies
8.2 Role in implementation and evaluation of strategies
9.
Decision Making Process and Techniques

9.1 Rational decision making process
9.2 Strategic decision making: concept, characteristics, importance and process.
9.3 Techniques of strategic decision making
10.
Strategic Management and Decision Making Practices in Nepal

10.1 Strategic management practices in Nepal
10.2 Decision making practices in Nepal
Reference Books:
1.
Thompson and Strickland. Strategic Management: concepts and cases. Tata-Maccraw Hill.
2.
Dr. Govind Ram Agrawal. Business Policy and Strategic Management in Nepal. M. K. Publishers
and Distributors.
3.
Thomos L. Wheelen and J. David Hunger. Strategic Management and Business Policy. Pearson.
CAP-III/Paper 8: Strategic Management and Decision Making Analysis
82
Annexure-4
(As per Regulation6)
APPLICATION FOR REGISTRATION FOR THE CHARTERED

ACCOUNTANCY EDUCATION FOUNDATION LEVEL
Registration No.
Photo
Date of Registration. :
To,
The Executive Director
ICAN
I hereby apply for registration for the Chartered Accountancy Education Foundation Level. My academic
and other details are as follows.
1.
Full Name
: (in capital letters) .........................................................................................................
Name in Nepali : ...................................................................................................................................

2.
Date of Birth
: ...................................................................................................................................
3.
Nationality
: ...................................................................................................................................
4.
Address
: (a) Permanent: ..........................................................................................................

(b) For Correspondence: ..........................................................................................
5.
Fathers/Guardians Name & Address: ...................................................................................................
6.
Academic Qualification:
Examination
7.
Year
Board/University
Marks
Scored
Total %
Scored
Division/Grade
Details of fees paid: Rs. ........................... cash or in ................................................................... Bank,

Account No. ............................................... Voucher No. .............................. date ................................
_____________________
Signature of the Applicant
Date:
Note:
Attested copies of the following documents should be enclosed:
1.
Citizenship Certificate/Passport
2.
Character Certificate
3.
Transcript/Mark Sheet
4.
Original Bank Voucher / Cash Receipt
83
Application for Registration for the CA Education Foundation Level
Annexure-5
APPLICATION FOR REGISTRATION FOR THE

INTERMEDIATE COURSE
Registration No.
Photo
To,
ICAN
1.
Full Name
: (in capital letters) .........................................................................................................
Name in Nepali : ...................................................................................................................................

2.
Date of Birth
: ...................................................................................................................................
3.
Address
: (a) Permanent: ..........................................................................................................
4.
Fathers/Guardians Name & Address: ...................................................................................................
5.
Academic Qualification:
(b) For Correspondence: ..........................................................................................
Examination
6.
7.
Year
Board/University
Marks
Scored
Total %
Scored
Division/Grade
If passed Foundation Course, quote the year and Roll No. ...................................................................
Details of fees paid: Rs. .................... cash or in .............................. Account No. ................................
Voucher No. ...................................... date .......................................
I declare that the particulars given above are true. I shall undertake to abide by the Nepal Chartered
Accountants Act, 1997, and the Nepal Chartered Accountants Regulations, 2004, as may be in force from
time to time.
I further agree not to pass on, sell or gift away any study paper or any other material provided to me by
the Institute.
_____________________
Date:
Note:
Attested copies of the following documents should be enclosed:
1.
Citizenship Certificate/Passport
2.
Character Certificate
3.
Transcript/Mark Sheet
4.
Original Bank Voucher / Cash Receipt
Application for Registration for the Intermediate Course
84
Annexure-6
APPLICATION FOR REGISTRATION FOR

CHARTERED ACCOUNTANCY EDUCATION FINAL LEVEL
Photo
Registration No. :
To,
ICAN
1.
Full Name : (in capital letters) : ...............................................................................................................

Name in Nepali : .....................................................................................................................................
2.
Registration Number of Intermediate: ....................................................................................................
3.
Address :
(a) Permanent: ....................................................................................................................

(b) Correspondence: ..........................................................................................................
4.
Name of Principal: ..................................................................................................................................
5.
Name of the firm: ....................................................................................................................................

Address: ..................................................................................................................................................
Phone No.: ....................................... Fax : .................................... Email: .............................................
6.
Date of Commencement of Articleship: ..................................................................................................
7.
Year of Passing Chartered Accountancy Education Intermediate Level
8.
Year and month
Roll No.
Group Passed
_____________
____________
_____________
_____________
____________
_____________
Details of fees paid: Rs. .............................. cash or in ................................................................ Bank,

Account No. ......................................... Voucher No. ...................................... date ..............................
I declare that the particulars given above are true. I shall undertake to abide by the Nepal Chartered
Accountants Act, 1997 and the Nepal Chartered Accountants Regulation 2004 as may be inforce from
time to time.
I further agree and not to pass on, sell or gift away any study paper or any other material provided to me
by the Institute.
_____________________
Date :
85
Application for Registration for the CA Education Final Level
Annexure-7
(As per Regulation 24(2))
DEED OF ARTICLESHIP
(To be filled in triplets)
Part 'A'
This Deed of Articleship is made on ..................................... (date) between ................................................
(name of Principal) of .............................................................. (Firm) or partner of ........................................
.................................. (hereafter called the Principal) and ..............................................................................
(Name) .................................................... of ....................................................... (Address) (hereafter called
the Articled Trainee). The particulars of this deed are as follows:
1.
In consideration of the covenants by the Articled Trainee hereafter contained, the Principal agrees to
take the Articled Trainee for a term of 3 years.
2.
The Articled Trainee of his own free will binds himself as an Articled Trainee to the Principal to serve
him for and during and unto the full end of term of 3 years effective from .............................................
3.
The Articled Trainee covenants with the Principal as follows:

(a) That he/she will at all times during the said term diligently and faithfully serve the Principal as his
Articled Trainee in the practice of profession of Accountancy.
(b) That he/she will not at any time during the said term destroy, cancel, obliterate, spoil, embezzle,
spend, make away with or take copies of books, papers, plans, documents, monies, stamps or
chattels of the Principal, his personal representatives or of his partner or partners or of any of
his clients or employers which shall be deposited in his hands or which shall come to his care,
custody or possession or allow any of the said good to be so treated by others if he can, by the
exercise of reasonable care, prevent it.
(c) That he/she will at all times keep the secrets of the Principal and his partner/s and of his client/s
and employers and will not divulge the names and affairs of such client and employer.
(d) That he/she will readily and cheerfully obey and execute the lawful and reasonable commands
of the Principal and will not depart or absent himself from the service of the Principal at any time
during the said term without his consent or that of his partners but will at all times during the said
term conduct himself with all due diligence honesty and propriety.
(e) That he/she will at all times well and faithfully serve the Principal, as an Articled Trainee ought
to do in all things whatsoever.
(f)
That he/she will make good and fully indemnify the Principal for any loss or damage suffered or
sustained by his misbehavior or improper conduct.
Deed of Articleship
86
4.
The Principal covenants with the Articled Trainee as follows:

(a) That he/she will by the best ways and means in his power and to the utmost of his skill and
knowledge instruct or cause to be instructed the Articled Trainee and afford him such reasonable
opportunities and work as may be required to enable him to acquire the art, science and knowledge
of Accountancy.
(b) That his/her professional practice or that of his employer(s)s occupation is suitable for the purpose
of enabling him to carry out the obligations referred to in (a) above.
(c) That he will pay a minimum monthly stipend at the rates specified in the Regulation 27 of Nepal
Chartered Accountants Regulation, 2004.
(d) (i) That if the Principal shall die during the said term, his legal representative, partners/employee
shall grant to the Articled Trainee a certificate of service, in the prescribed Form for the
completed period of articles.
(ii) That if the Principal shall cease to practice as an accountant or shall in any way become
incapable of continuing the intended employment of the Articled Trainee during the said
term, he shall make the necessary arrangement as far as practicable for the completion of
the residue of the terms as Articled Trainee with some other member entitled to train Articled
Trainee and grant the Articled Trainee, the certificate of service in the prescribed form for the
completed period of articles.
5.
These articles are subject to the Nepal Chartered Accountants Regulation, 2004 as may be in force
from time to time.
Signed by:
Signed by:
Name :
Name of Articled trainee :
Membership No.:
Regd. No.:
Certificate of Practice No.:
Address:
87
Deed of Articleship
Part 'B'
(To be filled by Principal)
1.
Name: .....................................................................................................................................................
2.
Membership No. ............................................ Certificate of Practice (COP) No.: ..................................
3.
Professional Address: .............................................................................................................................
4.
Date of receiving COP form the Institute ...................................... (no.) .................................................
5.
(a) Name of Address of the firm: ..........................................................................................................

(b) Members status (i.e proprietor/partner/employee)
I declare that the particulars given above are true and correct and I undertake to intimate the Council within
sixty days of any change that may occur in the information furnished during the period of training of the
articled trainee.
I further declare that:

1.
I have fully satisfied myself that the articled is eligible to receive training as such under the Nepal
Chartered Accountants Regulation, 2004 and that:
(a) He/She has completed the age of 18 years;
(b) He/She has passed Chartered Accountancy Education Intermediate Level Examination or is
exempted from passing it under the Regulations.
2.
This Deed of Articleship has been executed in triplicate.
3.
I have fully satisfied myself that the Deed has been executed correctly in all respects.
4.
One copy of the Deed of Articles has been retained by me and the other has been given to the articled
trainee.
5.
I shall be paying stipend to the articled trainee not below the rates prescribed under the Regulations.
6.
I have the necessary vacancy to train the aforementioned-articled trainee and that relevant papers
for registration have been filed in accordance with the provisions of Regulation.
Signature of the Principal
Deed of Articleship
Seal
88
Date: _______________
Annexure-8
CERTIFICATE OF SERVICE ON DISCONTINUANCE OR TERMINATION OF

ARTICLESHIP
I ............................................................... of ................................................................. do hereby certify that

Mr/Ms. ................................................................. with Registration No. ................................... served as an
articled trainee under me in accordance with the Chartered Accountants Regulation from ...........................
to ......................... and that his progress was ............................... and that to the best of my knowledge he
bears a ......................................... Moral Character.
I certify that during the above mentioned period the articled trainee was given a leave of ............................
days.
The Deed of Articles made on ............................................................... is terminated by mutual consent with
effect from .......................................
Date :
Signature:
Name of Principal:
COP No. .................
I ...................................................................... have agreed for termination of my training under articles with

Mr./Ms. ......................................................................................... with effect from .................................... at
my own free will and endorse the contents of this certificate.
Date :
Signature :
Name of Articled Trainee:
Regn. No. .......................
Note : This Certificate should be produced in triplicate.
89
Certificate of Service on Discontinuance or Termination of Articleship
Annexure-9
(As per regulation 31, sub-regulation 1)
REPORT OF NON COMPLIANCE OF ARTICLED TRAINING
I ...................................................................................................................... legal representative of the late

............................................. of ......................................... do hereby certify that to the best my information
that Mr./Ms ....................................................................................... served as an articled trainee under the
late Mr/Ms .................................................................................................................................................. of
................................................................................... in accordance with the Nepal Chartered Accountants
Regulations, 2004 for a period of ............................... years ......................... months and .................... days
from .................................... to ................................... and that according to the information supplied to me
his/her progress was satisfactory and he/she be bears a good moral character.
I further certify that according to the information supplied to me, during the above mentioned period, the
articled trainee was given leave for ......................... days.
The article trainee was duly registered with the Institute vide Registration No. .....................................
____________________
Signature
Name:
Status:
Date:
Report of Non Compliance of Articled Training
90
Annexure-10
As per regulation 32, Sub Regulation 1
RECORD OF ASSIGNMENT
Name of Articled Trainee : ..............................................................................................................................

Registration No. : ............................................................................................................................................
Date of Commencement of Articleship Training : ...........................................................................................
Period: From ....................................................................... To ......................................................................
RECORD OF ASSIGNMENTS
REMARKS
Signature of Principal / Supervising Chartered Accountant: ...........................................................................

Name of the Principal /1 Supervising Chartered Accountant: .........................................................................
Membership No.: .............................................................................................................................................
Name of the Firm: ...........................................................................................................................................
91
Record of Assignment
Annexure-11
REPORT OF PRACTICAL TRAINING
Name of the Articled Trainee: .........................................................................................................................

Registration No.: .............................................................................................................................................
Period: From ....................................................................... to ........................................................................
S.No.
Sector
Financial Management and Accounting
Auditing (including Internal Audit)
Taxation
Management
Information Technology
Other areas, if any, specify
Secondment exchange, if any
Industrial Training, if any
Time Spent in days
General Comments/ Remarks (Information on levels of Progression):

I/We hereby certify that the aforesaid information is based on Training Records maintained in the office.
Signature: ............................................................
Name of Principal: ..........................................................................................................................................
Membership No.: ..................................................
Name of the Firm: ...........................................................................................................................................
Date: .................................................
Report of Practical Training
92
Annexure-12
(As per regulation 30, Sub Regulation 1)
CERTIFICATE OF SERVICE UNDER ARTICLES
I .................................................................. of ............................................................. do hereby certify that

Mr/Ms .......................................................................... Registration number ........................................... has
served as an articled trainee under me in accordance with the Nepal Chartered Accountants Regulations,
2004 for a period of ............................... from ............................... to .................................. and that his/her
progress was satisfactory and that to the best of my knowledge he/she bears a good moral character.
I further certify that, during the above-mentioned period, the articled trainee was given leave for ..................
days.
Signature: ........................................................
Name of Principal: ...........................................................................................................................................
Membership No.: .............................................
Name of the Firm: ................................................................................. Seal : ...............................................
Date: ......................................
93
Certificate of Service Under Articles
Annexure-13
LETTER OF COMPLETION OF ARTICLESHIP TRAINING
Mr./Ms.
Registraion No.:
This is to certify that your Articleship Training for the period of ........................ years and ............... months
under the Principal .......................... of the firm ......................... is completed on ..........................................
This letter of completion of Articleship Training is being issued to you in pursuant to Regulaiton 30 of the
Nepal Chartered Accountants Regulation 2004.
Executive Director
Date:
cc: Principal
Letter of Completion of Articleship Training
94
Annexure-14
(As per regulation 12, Sub Regulation 3)
ELIGIBILITY CERTIFICATE
Chartered Accountancy Education

Foundation/Intermediate/Final
Certificate No.:
Issued Date: .................................
Mr./Ms. .................................................................................... enrolled with the Institution on ......................

for the Chartered Accountancy Education Foundation (Group I/Group II/Both Groups)/ Intermediate (Group
I/Group II/Both Groups)/ Final (Group I/Group II/Both Groups) course has successfully completed the
Eligibility Test, subject to the Nepal Chartered Accountants Regulation, 2004. His/Her registration number
is ........................
This certificate shall remain valid till ........................ Examination subject to other applicable provisions.
_______________
Executive Director
95

Chartered Accountancy Scheme Syllabus

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STUDENTS MANUAL

Chartered Accountancy Professional Scheme & Syllabus

The Institute of Chartered Accountants of Nepal

The Institute of Chartered Accountants of Nepal

Designed & Printing

Print and Art Service

The Institute of Chartered

Foreword to Second Edition

Suvod K. Karn, FCA

Foreword to First Edition

Tirtha Raj Upadhyaya, FCA

About The Institute

Chartered Accountancy as a Profession

Levels in Chartered Accountancy Course

Chartered Accountancy Professional (CAP)-I/Foundation Level

4.1 Eligibility for Registration to Foundation Level

4.2 Provisional Registration

4.3 Course Contents

4.4 Eligibility for Appearing in Foundation Examination

5. Chartered Accountancy Professional (CAP)-II/Intermediate Level

5.1 Eligibility for Registration in Intermediate Level

5.2 Registration Procedures

5.3 Course Contents

5.4 Eligibility Test Scheme

Chartered Accountancy Professional (CAP)-III/Final Level

6.1 Eligibility for Registration to Final Level

6.2 Registration Procedures

6.3 Course Contents

6.4 Eligibility Test Scheme

7.1 Members Entitled to Train Articled Trainees

7.2 Stipend to Articled Trainees

7.3 Additional Articled Trainee

7.4 Industrial Training

7.5 Exchange of Articled Trainee

7.6 Termination of Deed of Articleship

7.7 Notifying the Principals Position

7.8 Record of Trainees

7.9 Leave to an Articled Trainee

7.10 Working Hours of Articled Trainees

7.11 Action Against Misconduct by The Principal and Articled Trainees

7.12 Action Against Principal

7.13 Issue of Certificate of Completion of Articleship

7.14 Prohibition to Receive Financial Benefit from Articled Trainees

Paper 1: Fundamentals of Accounting

Paper 2: Fundamentals of Economics

Paper 3: Business Communication

Paper 4: Mathematics & Statistics

Paper 5: Management and Organizational Relations

Paper 6: Fundamentals of Information Technology

Annexure-2 Detailed Syllabus of Chartered Accountancy Professional (CAP)-II

Paper 1: Advanced Accounting

Paper 2: Audit and Assurance

Paper 3: Corporate & Other Laws

Paper 4: Financial Management

Paper 5: Cost and Management Accounting

Paper 6: Business Communication & Marketing

Paper 7: Income Tax & Vat

Annexure-3 Detailed Syllabus of Chartered Accountancy Professional (CAP)-III

Paper 1: Advanced Financial Reporting

Paper 2: Advanced Financial Management

Paper 3: Advanced Audit and Assurance

Paper 4: Corporate Laws

Paper 5: Management Information and Control System

Paper 6: Advanced Taxation