Accounting and Auditing

What the official syllabus says

RAS Main Examination, Paper I: General Studies I, Unit III (Sociology, Management, Accounting & Auditing), Part C: Accounting & Auditing.

• Theory Base of Accounting: Generally Accepted Accounting Principles (GAAPs) and Accounting Concepts.
• Accounting Standards: Basic Knowledge of Accounting Standards
• Financial Statement of a Company; Techniques of analysis of Financial Statements; Cash Flow Statement; Basic knowledge of Responsibility and Social Accounting.
• Computerised Accounting: Features and Software Packages
• Basic Knowledge of Goods and Services Tax
• Meaning & Objectives of Auditing, Audit Programme, Basic Knowledge of Social, Performance and Efficiency Audit; Elementary knowledge of Government Audit.

Topics in detail

Theory base of accounting

• Meaning, objectives and users of accounting information
• Generally Accepted Accounting Principles (GAAPs)
• Accounting concepts: business entity, money measurement, going concern, accounting period, cost, dual aspect, revenue recognition, matching, full disclosure, consistency, conservatism, materiality, objectivity
• Accounting conventions; the accounting equation (assets = liabilities + capital)
• Cash and accrual bases of accounting; double-entry system

Accounting standards

• Meaning and need; the Accounting Standards Board of the ICAI
• Accounting Standards (AS) and Indian Accounting Standards (Ind AS) converged with IFRS; to whom they apply

Financial statements and their analysis

• Financial statements of a company under Schedule III of the Companies Act, 2013: balance sheet, statement of profit and loss, notes
• Tools of analysis: comparative statements, common-size statements, trend analysis, ratio analysis (liquidity, solvency, activity and profitability ratios)
• Cash flow statement: operating, investing and financing activities; direct and indirect methods
• Limits of financial statement analysis: historical cost, price-level changes, window dressing
• Responsibility accounting: meaning, responsibility centres (cost, profit and investment centres), conditions and benefits for control
• Social accounting: social costs and benefits, social responsibility reporting, corporate social responsibility (section 135 of the Companies Act, 2013)

Computerised accounting

• Features, advantages and limits compared with manual accounting
• Software packages: ready-made, customised and tailor-made; components such as masters, vouchers, ledgers and reports

Goods and Services Tax

• Constitution (101st Amendment) Act, 2016 and the GST Council (Article 279A)
• Destination-based tax; CGST, SGST, UTGST and IGST
• Input tax credit, registration, returns, composition scheme, the GST Network
• Taxes subsumed and items kept outside GST

Auditing

• Meaning and objectives: true and fair view, detection and prevention of errors and frauds
• Types of audit: statutory, internal, continuous, interim and final audit
• Audit programme: meaning, contents, merits and limits; audit working papers; vouching and verification
• Social audit: people's review of public works (for example under MGNREGA)
• Performance audit (economy, efficiency and effectiveness) and efficiency audit
• Government audit: the Comptroller and Auditor General (Articles 148 to 151), the CAG's (Duties, Powers and Conditions of Service) Act, 1971, audit reports and the Public Accounts Committee; audit of local bodies in the state