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not been satisfactory. The answers of the candidates showed lack of knowledge and understanding of the subject, particularly the Accounting Standards. The candidates are advised to read and understand the Study Material thoroughly and analytically. Adequate practice of solving practical problems is essential to acquire command over the fundamentals of the subject. The solutions to practical problems must be given in suitable formats along with sufficient working notes. It is suggested that the question paper should be gone through carefully before writing the answers. Specific Comments: Question1 In parts (ii), (iii), (v), (viii), (x), candidates could not answer the question in accordance with the relevant provisions of the Accounting Standards. Question 2 Most of the candidates failed to give the required journal entries in the books of MN Ltd. In very few cases, the balance sheet of MN Ltd. (post merger) was prepared correctly by the candidates. Question 3 Few candidates could not pass the necessary journal entries. Consequently, they could not prepare partners; capital accounts in the correct manner. Question 4 In part (b) of the question, some candidates calculated the amount the amount of interest directly, without using the average due date method. Question 5.(a) Some candidates erred in calculation of subscription received, purchase of sports equipment, opening balance of capital fund. They could not give the correct receipts and payments account and balance sheet of the club. (b) Many candidates committed mistakes in allocation of expenses between pre and post incorporation periods and consequently, in computation of pre incorporation and post incorporation profits.
Question 6 Many candidates could not score good marks in this question as the answers were not concise and to the point. In parts (iv) and (vi), they could not apply the relevant provisions of the Accounting Standards. They were not aware of the disclosure requirements in the profit and loss statement of a company in respect of corporate dividend tax which was required in part (v) of the question.
SUMMARY OF EXAMINERS’ COMMENTS PAPER – 2 : BUSINESS LAW, ETHICS AND COMMUNICATION General Comments The performance of the examinees, in general, was average. The following improvements are required: 1. Examinees to provide case-laws and specific provisions in their answers. 2. Examinees to hone their English language skills such that their answers have clarity and precision. 3. Examinees to make use of the various Bare Acts. 4. Examinees must grasp the questions correctly and not get confused as mentioned in Specific Comment No. 3 below. 5. Examinees to answer to the point, without unnecessary extrapolations. 6. Examinees to focus on certain legislations such as the Negotiable Instruments Act, 1881, and the Employees‟ Provident Funds and Miscellaneous Provisions Act, 1952. 7. In the Communications part, performance of the students was satisfactory. Nevertheless, the students should improve their writing and presentation skills. Further, the students are advised to delve deep into the areas of drafting notices/circulars/minutes/ legal deeds and documents etc. Specific Comments Question 1. The performance of the examinees was average in 1(a) while 1(b) and 1(c) were answered satisfactorily. Some examinees had come to the erroneous conclusion that there was no consideration involved in question 1(a) and that hence there was no contract in the given problem. Question 2. Examinees‟ performance was quite satisfactory compared to question No.1, though both the questions are similarly patterned.
Question 3. The performance of the examinees was found to be mixed, with some answering well, while others having failed to mention the relevant legal provision, while still others were referring erroneously to the Central Government rather than the Tamilnadu Government. Question 4. Many examinees had not mentioned the relevant provisions (Sections 39 & 40 of the Negotiable Instruments Act). Question 5. The performance of the examinees was highly satisfactory. Question 6. Many examinees had not attempted this question. Even those who had attempted it fared poorly. Question 7. This question was not answered well. Many examinees could not explain why the entity in question was an „illegal association‟.
INTEGRATED PROFESSIONAL COMPETENCE EXAMINATION :NOVEMBER, 2009 Question 8. Examinees‟ performance was average. The various rights of the three parties were not clearly enunciated by most examinees. Question 9. Performance of the examinees was satisfactory. Question 10. An overall average performance with regard to this question. Many examinees could not pin-point that the non-attachment of the explanatory note vitiates the notice. Question 11. Performance was average and the answers were vague, in many cases. Question 12. The performance was generally good, though the pragmatic reasons were found mixed up with certain general reasons that the candidates had adduced on their own. Question 13. Performance was satisfactory. Question14.(a) Performance of the students was quite satisfactory. The question was asked to test the students‟ knowledge about the merits and demerits of informal form of communication.
(b) Most of the students attempted this question in a very poor manner. The students failed to discriminate the difference between Notice and Agenda. The students must develop a logical understanding to tackle such a practical question. Question 15. Overall performance of the students was not satisfactory. The format of the Annual General Meeting was not followed by most of the students. The students are advised to practice the specimen of Minutes of Annual General Meeting. Question16. Performance of the students was middling. They could not get the essence of the question and drafted the Partnership Deed rather than the Partnership Retirement Deed.
PAPER – 3 : COST ACCOUNTING AND FINANCIAL MANAGEMENT General Comments The overall performance of the candidates was below average. The quality of most of the answers reflected lack of candidates‟ knowledge and understanding of the subject. It is also observed that the candidates neglect the theoretical aspects of the subject; they should go through the study material carefully. A thorough practice and lots of reading of the subject is required to maintain the level of knowledge expected from the students of IPCC level. Specific Comments Question1.(i) This theory question related to „Basic Concepts‟ was attempted by majority of the candidates. Most of the students were not able to understand the „imputed cost‟ as „input cost‟. Many of them were not able to answer it appropriately. (ii) This practical question related to labour (Variance analysis of labour) was attempted by the majority of the candidates. Maximum of the students were not able to answer it correctly. They failed to depict the relationship of activity ratio, efficiency ratio and capacity ratio correctly.
SUMMARY OF EXAMINERS’ COMMENTS
(iii) This theory question part related to „Non Integrated Accounts‟ was not satisfactorily answered by the majority of the students. Many of the examinees had treated „financial expenses‟ as financial items‟. (iv) This theory question was related to „Contract Costing‟ was correctly answered by only few of the students. The advantages of cost plus contracts were stated correctly by the students. (v) This practical question part related to „Marginal Costing‟ was not satisfactorily answered by many of the students. Many of them failed to calculate BEP correctly. (vi) This theory question related to „Non – Integrated Accounts‟ was not well answered by most of the candidates. Many of them failed to mention a situation where reconciliation statement of cost and financial account are not required. Question2. This numerical question related to „Marginal Costing and Absorption Costing‟ was attempted by less number of the examinees. The students were confused with the preparation of the respective statements. The candidates could not solve this question correctly. Question3.(a) This numerical problem related to „Process Costing‟ is covered under „Method of Costing (II)‟ was attempted by a large number of students. Most of the examinees had failed to take into account of the material introduced at the inception and hence could not prepare the statement of equivalent production account, statement of cost and process account correctly. (b) This practical question related to „Standard Costing‟ was satisfactorily answered by majority of the students. Variance related to material and labour was correctly calculated by most of the candidates. Question4.(i) This numerical question related to „Labour‟ was wrongly answered by maximum number of candidates. Most of the students were able to calculate „time saved‟ but they were not able to accurately calculate the effective hourly rate of wages. (ii) This theory question part related to „Operating Costing‟ is covered under „Method of Costing (I)‟ was not answered satisfactorily by maximum number of candidates. They were not able to show that how composite units are computed. (iii) This numerical question related to „Material‟ is attempted by the
maximum number of students satisfactorily. EOQ was calculated by majority of them. (iv) This theory question related to „Budgets & Budgetary Control‟ was very well answered by the majority number of students. They were even not able to list out the list of functional budgets correctly. Question 5.(i) Short note on Limitations of Financial Ratios was answered correctly by most of the candidates. (ii) Concept of Business Risk and Financial Risk was answered well by majority of the candidates.
INTEGRATED PROFESSIONAL COMPETENCE EXAMINATION :NOVEMBER, 2009 (iii) Differentiation between Factoring and Bills Discounting was well written by most of the candidates. However, few candidates differentiated between factoring and discounting instead. (iv) A large percentage of the candidates discussed the differentiation between Financial Management and Financial Accounting well. (v) Very few candidates could compute the Cost of Retained Earnings on correct lines. (vi) Majority of the candidates were able to calculate the amount of Fixed Assets and Proprietor‟s Fund correctly. Question 6 Majority of the candidates prepared the Cash Flow Statement on correct lines but failed to present it in the proper format. However, a few candidates could not work out cash flow from operating activities correctly. Further, the candidates have not presented their answers supported by proper working notes in preparation of cash flow statement. Question 7.(a) Though a large percentage of the candidates prepared correctly the Income Statement, however, few of the candidates did not support their answers by proper working notes. (b) This part of the question was not well answered by majority of the candidates. Most of them failed to take into consideration the loss of commission. Few of the candidates even added the commission to the income instead of treating it as an opportunity lost.
Question 8.(i) Majority of the candidates answered well the two basic functions of Financial Management. However, a few of them discussed the objectives of Financial Management instead. (ii) A large percentage of the candidates attempted this part of the question on short notes on Ploughing back of profits and Desirability factor. However, only a handful could discuss logically and in short. Few of the candidates have written ploughing back of profits as profit on sale of old assets. (iii) A large percentage of candidates explained well the concept of Weighted Average Cost of Capital. (iv) While most of the candidates attempted the problem, only a few of them could calculate the value of the firms according to MM Hypothesis correctly. 4 : TAXATIONPAPER General Comments Many candidates have exhibited lack of knowledge of the provisions of the Income-tax Act and Service Tax and VAT. They were also not aware of the recent amendments in the Income-tax Act. Further, most of the candidates have not given proper working notes for practical problems. The presentation of answers is also poor in most cases. SUMMARY OF EXAMINERS’ COMMENTS Specific Comments Question 1.(i) Many candidates have wrongly considered the purchase price of flat, i.e., Rs.4,75,000, as the annual value of house property. (ii) Most of the candidates have not provided for exemption of Rs.1,500 under section 10(32) in respect of income of minor child, clubbed in the hands of Siddhant; (iii) Some candidates have wrongly taxed national award for humanitarian work from the Central Government under the head “Capital gains” or “Income from other sources”. Some others have totally ignored the same without giving any reason. Question 2.(a)(i) Many candidates have not grossed up winnings from
lotteries and interest on debentures while calculating income under the head “Income from other sources”; (ii) Most of the candidates have wrongly treated interest on Government securities and interest on Post Office Monthly Income Scheme as exempt income. (b) (i) Most of the candidates have allowed interest under section 24 on payment basis instead of due basis; (ii) Municipal taxes paid by the tenant was wrongly allowed as deduction from gross annual value in most of the cases. (c) Many candidates have not deducted the advance of Rs.70,000, received and retained on an earlier negotiation for sale of property, to arrive at the cost of acquisition. Question 3.(i) Some candidates have wrongly treated share of profit from firm as taxable income and set off business losses against the same; (ii) Some candidates have wrongly set off brought forward business loss against income from house property of the current year; (iii) Many candidates have wrongly set-off long-term capital loss against short-term capital gain. Question 4.(a) Most of candidates were not aware of the provisions of section 201 relating to consequences of failure to deduct and pay the tax and hence, they could not answer the question correctly. (b) Some candidates have wrongly written about the provisions of section 50C dealing with adoption of value assessed by stamp valuation authority. (d) Most of the candidates were not aware of the provisions of section 78 and have wrongly written about the order of set-off under each head of income. Some candidates have answered that loss can be carried forward without any restriction even in case of change in constitution /succession in business. Question 5.(d) Few candidates wrongly took the net amount (net of TDS) as the taxable receipt. Some candidates further deducted the amount of TDS from Rs.4,48,500 while others wrongly concluded that once TDS is deducted no service tax is liable to be paid. INTEGRATED PROFESSIONAL COMPETENCE EXAMINATION :NOVEMBER, 2009 Question 6.(a) Majority of the candidates were ignorant about the percentage of abatements available to various tours.
(b)(i) Many candidates were not aware of the provisions relating to export of services. (b)(iii) Many candidates did not mention the due date for the month of March. Some of them wrongly considered HUF along with individual and firm for the purpose of determining the due dates. Question 7.(d) Instead of mentioning that VAT is not applicable on lottery tickets, many candidates wrongly considered lottery ticket as exempt item under VAT. Question 8.(b)(i) Many candidates wrongly concluded that the final burden of VAT does not lie on the consumer. (b)(ii) Most of the candidates provided general answers to this question instead of mentioning the procedure of filing of returns under VAT. General Comments The performance of the candidates was not satisfactory. Questions based on practical application of Accounting Standards have not been answered well. It is also observed that the candidates neglect the theoretical aspects of the subject; they should go through the study material carefully. Adequate practice of solving practical problems is essential to acquire command over the fundamentals of the subject. The candidates must present their answers in organized manner and solutions to practical problems should be given in prescribed formats along with suitable working notes. Answer to the same question were scattered at many places in answer sheets of the candidates. It is advised that all parts of a particular question should be attempted at one place. It is suggested that the question paper should be gone through carefully before writing the answers. Specific Comments Question 1 Satisfactory performance was observed in the question except for parts (i),(ii),(iii), (iv), (vi), (ix). Majority of the candidates did not substantiate their answers with the relevant provisions of the accounting standards. Question 2 Few candidates erred in computation of purchase consideration and goodwill and consequently, were not able to give the correct balance sheet of the amalgamated company.
Question 3 Majority of the candidates failed to compute the correct amounts of general reserve, securities premium and cash balance of Dee Ltd. as at 31st march, 09 after giving effect to right issue and redemption of debentures. They could not calculate the number of shares issued and cash paid and therefore, the correct balance sheet was not prepared. Question 4 Many candidates did not understand conversion process of UK pound into Indian rupees for trial balance of a foreign branch. Some candidates also converted H.O. balance and goods from H.O. at the year end exchange rates instead of considering their balances from H.O. books. Because of these errors, they could not prepare trading and profit and loss account and balance sheet of branch in H.O. books. Question 5.(a) Most of the candidates were not aware of the format of profit and loss account prescribed for banking companies. They did not classify incomes and expenses under schedules 13, 14, 15 and 16. Few among them erred in computation of provision for nonperforming assets, tax provision and transfer to statutory reserve. (b) Majority of candidates failed to give the required journal entries related to premium on buyback and creation of capital redemption reserve. Consequently, they could not prepare the balance sheet of Dee Ltd. as on 1st April, 08 after buy back of shares.
INTEGRATED PROFESSIONAL COMPETENCE EXAMINATION: NOVEMBER, 2009 Question6.(a) Few candidates erred in calculation of profit on realization and the final settlement amount paid to the partners. (b) The answers of the candidates exhibited lack of knowledge of the provisions of AS 16 “Borrowing costs” and AS 20 “Earnings per Share”. In sub-part (i), only few candidates computed the correct amount of interest amount capitalized. For sub-part (ii), most of the candidates were confused regarding treatment of buy back of shares. They were not able to compute the weighted average number of shares and thus failed to arrive at the correct amount of basis earnings per share. PAPER – 6 : AUDITING AND ASSURANCE
General Comments Many of the candidates failed to understand the question carefully and so, the answers were not in tune with the questions. Answers to the practical problems in many cases were neither concise nor logical. Many of the candidates lack a command of English language and presentation skill. Handwriting of many of the students appeared illegible. Many of the candidates who answered all the questions within the main answer book have secured better marks than those who used many additional sheets. Some candidates tend to indulge in selective studies instead of paying attention to on the entire syllabus; hence, the students answered some questions extremely well but were left perplexed by other questions , forcing them into guess work instead of answering to the point. Specific Comments Question 1. Most of the students have done this part of the question well. Question 2.(a) Many students have not answered this question correctly and their answers were in general. (b)(i) Many students have been confused over this part of the question and have answered wrongly referring to AS 10 instead of AS 26. (ii) Many students‟ answers were correct. However a few students have given vague answers. (c) Most of the candidates have performed this part of the question well. Question 3. Many students have answered well this part of the question, while a few students have given just the main points and did not elaborate their answers. A few students were confused, wrongly referring to AS 1. Question 4(a) Poor performance of the students could be witnessed in this part of the question. (b) Majority of the students‟ answers were irrelevant.
SUMMARY OF EXAMINERS’ COMMENTS Question 4.(a) Many students have discussed income, expenses, assets and liabilities instead of discussing the audit procedure to be followed while auditing Hotel accounts. (b) Majority of the students were confused and discussed the method of calculating depreciation instead of mentioning the disclosure procedure as
given in AS 6. Question 5.(a) The performance of the students was found satisfactory. (b) Many students have answered well. However, a few students failed to give relevant provisions and explanations. Question 7.(a) Many students did not understand the filling up of vacancy in case of joint auditor, hence their answers were wrong. (b) Only a few students have answered this part of the question correctly., while majority of the students have given wrong answers. (b) Alternative: Many students‟ answers were general while some students wrongly referred to the method of vouching regular sales. (c) Majority of the students have performed this question well. A few students have discussed the routine bank vouching and no specific details relating to overdraft were given. Question 8.(a) Poor performance of the students could be witnessed in this part of the question. (b) Performance of the students was found satisfactory. A few students did not understand the cut off arrangement. (b) Alternative: Many students have attempted this question. However a few students‟ answers were found irrelevant. (c) Most of the students have wrongly gone on discussing appointment, remuneration and removal instead of duties and powers of C&AG. 7 : INFORMATION TECHNOLOGY AND STRATEGIC MANAGEMENTPAPER SECTION – A : INFORMATION TECHNOLOGY General Comments The examinees of IPCC are lacking in conceptual understanding was comparatively low and there is a scope for further improvement of the subject hence, most of the candidates attempted the paper without adequate preparation. Examinees have to improve the subject knowledge as well as language skills for better performance. Examinees are advised to study the prescribed study material in depth. For giving appropriate answer, understanding of the technical terms with relation to information technology is required.
INTEGRATED PROFESSIONAL COMPETENCE EXAMINATION: NOVEMBER, 2009 Specific Comments Question 1.(a) Almost all the examinees answered this question but not given satisfactory explanation, especially to touch screen, Layer 3 (Network Layer), Data Dictionary. Data Dictionary was referred as Literary Dictionary and USB (Universal Serial Bus) was misinterpreted as UPS (Uninterrupted Power Supply). (b) Most of the examinees answered this question but not up to the expected level. Specially, in case of transaction log, the explanation was not satisfactory. Random Access was misinterpreted as RAM (Read Only Memory). Question 2.(a) The performance of the examinee was not satisfactory. Examinees neglected the study materials and gave general answer. In some cases, image processing was misinterpreted as photo printing. (b) Performance was satisfactory, except that, many of the examinees explained components of DSS instead of characteristics of DSS. Question 3.(a) Performance of the examinees was found to be moderate. In most of the cases the factors to be considered for best file organization were not either listed or explained properly by the examinees. (b) Some of the candidates failed to properly explain the meaning of Electronic Data Interchange. Question 4.(a) Lack of conceptual clarity and proper presentation was noticed while writing the output sequence of the given flowchart. (b) Most of the examinees answered this question, but examinees made mistakes in calculations within the loop. Question 5.(a) Majority of the examinees answered this question on ring network quite fairly. (b) Most of the examinees misunderstood the concept of Caching Server and Proxy Server and have given vague answers. SECTION – B : STRATEGIC MANAGEMENT General Comments
In few cases, it was brought to notice that the examinees have not provided proper question numbers. Some candidates gave vague answers. It is advisable to be specific and not write irrelevant answers. Handwriting of many examinees was illegible. Analytical and planned presentation was missing in most cases. SUMMARY OF EXAMINERS’ COMMENTS
Special Comments Question 6. Although majority of the candidates were able to provide answers in terms of correctness or incorrectness of the statements, they were not able to substantiate their answers with adequate and valid reasoning. Problems were more in part (b) related to corporate culture and part (c) related to opportunity and challenge in “change”. Question 7. The answer of the examinees reflected that most of them were not aware about the relevance of TOWS matrix in strategic planning process. Part (b) was not well attempted by the examinees which was related to the framing of the mission statement of a company. Question 8. Majority of the candidates attempted this question but only few of them were able to explain Porters five forces correctly. The overall performance of the examinees in this question was average. Question 9. This question was divided into three parts. Most of the examinees were able to explain six sigma but for part (b) which was related to differentiate six sigma with other quality programs and part (c) which was related to six sigma themes were either not attempted by the candidates or they gave vague answer for them. Question 10. Being a case study, the answers varied. There were five
Questions asked to the candidates in the case study. The conceptual part was alright but application part was found wanting. The candidates secured good marks in conceptual part of each question but they could not obtain good marks in application part. There was a general leave of articulation on the part of students hence students could obtain average marks. However, some students attempted this question extremely well and obtained as high as 17-18 marks.