SUMMERY OF EXAMINERS’ & HEAD EXAMINERS’ COMMENTS ----

DECEMBER 2006 EXAMINATION

INTERMEDIATE : STAGE - I

Paper : 5 : Cost and Management Accounting

Qn. No. 1.  This is an objective type of question. Though all the students attempted this, performance was not satisfactory. Part (a) – a question on matching, Part(b) – a question on False or True, could not be answered correctly by many and for Part (c) – a question on ‘multiple choice’, no supporting workings were shown for the choices made. Again choice were also not correctly done by many.

Qn. No. 2.  This is purely a theoretical question. Those who attempted this question failed to answer to the point. Points of distinction between the terms were not clearly stated. In almost all cases answers were vague and sketchy.

Qn. No. 3.   This is a common question. Primary distribution of overhead was done correctly by many. But majority students did not include direct wages of the service departments for secondary distribution. For such incorrect working , calculation of overhead recovery rate and total cost of job no. 234 were not correct in majority of cases.

Qn No.  4.  (a)  Answers showed that 95% of the candidates who attempted this part of the question had no clear idea on “By-product cost accounting”. They mixed up the joint cost apportionment methods and by-product cost accounting system in answering this question.

                  (b)  For the solution of the problem part of the question, students failed to choose suitable basis of apportionment of joint costs Here physical unit basis cannot be suitable as kgs. and litre are not the identical units. So, net realizable value after further processing is the suitable basis for joint cost distribution which many could not understand.

Qn. No. 5 (a)   Instead of starting the “assumptions” for Break-even analysis, almost all the candidates gave the definition of the term Break-Even point (BEP), and the different formulae for calculation of BEP, P/v ratio etc. Not a single students discussed the last part of the question- “how far they are Valid?”

                  (b)  Here also the candidates, mislead of calculating combined BEP for Plants I & II, they calculated separate BEP for Plant I and Plant II. Again those who tried to calculate the combined BEP had not converted the data of the Plants in terms of 100% capacity for calculating combined BEP. This resulted is wrong answer in many cases

Qn. No. 6.  This was a question on standard costing. Performance was not satisfactory at all. Most of the candidates could not calculate standard gang time, gang rate, labour mix-variance and labour idle-time variance.

Qn No. 7.  This, being a common and popular question, was attempted by majority of the students. Performance was also more or less satisfactory. However in some cases, answer showed the candidates poor knowledge of accounting entry for depreciation and its treatment, calculation of fund from operation and treatment of revaluation of land in this type of problem. Again some students mixed up the items of sources and application.

Qn. No. 8.   This was a question on short note writing. Many candidates attempted this question but the answer was not to the point at all.

Students showed their poor knowledge in theoretical concept of the subject. To improve their performance they should read the standard text books and study materials intensibly and extensibly and workout more and more problems of different nature on the topics prescribed for the intermediate course.

Paper 6 :  Information Systems and Technology

Ø       Candidates should avoid the practice of excess answering in examination & should devote their time in betterment of the stipulated question-answering. Candidates are advised to give technically precise answers without attempting the questions on the basis of guess.

Ø       Candidates should give the answer point-wise, if possible, instead of giving the answers in paragraph shape.

Ø       Students are advised to attempt the question as per given instructions after reading the questions carefully.

Ø       Correct spelling of various computer terminologies is of vital importance in professional arena.

Ø       Try to improve the presentation style of the answers.

Ø       For acquiring through knowledge, students should read the study notes analytically. And should not overlook any sections of the study material.

Ø       Instead of just memorizing, proper understanding of the subject matter is of vital importance.

Ø       Modern computer application thoughts should be given special importance.

Paper 7 : Business Laws And Communication Skill

Overall unsatisfactory  performance of Examinees are mainly on account of

Ø       Failure to understand the question,

Ø       Wrong/incomplete answers,

Ø       Lack of communication skills, bad hand writing, poor drafting of charge sheet etc.

Ø       Lack of clarity of thought and expression

Ø       Bad presentation in majority cases – lack of presentation covering appropriate and relevant legal provisions.

Ø       Not conversant with amendment

Ø       Lack of in depth study of books, even Institute’s study notes not being properly read.

Ø       Commonsense answers by some specially on Payment of Gratuity Act, Consumer Protection Act,

Ø       Poor English.

Suggestion for improvement of Examinees’ performance :

It is suggested :

i)                    to keep in touch with periodical amendments, to study the Institute’s Study Notes and books of latest edition

ii)                 thorough and in depth study is necessary specially for compulsory questions No. 1

iii)               careful reading and understanding the meaning and basic requirement of question,

iv)                to avoid repetition of same points,

v)                   to improve communication skill,

vi)                not to write vague answers.

vii)              To provide margin on both sides of the answer book with adequate space in between two answers, to present in a legible manner

viii)           To improve hand writing

Since the paper is related to law, intelligent and logical approach to the question and general knowledge of the subject set in the question & good presentation are required.

Paper 8 : Business Taxation

Qn. No. 1 : As usual, some students answered this very well, and many of them in a poor manner.  In question 1(c), most students did not state the proper reasons.

Qn. No. 2  :   Sub-divisions (a) and (b) involving short notes, were answered in a poor manner. Vague answers were seen for (b) relating to ZCB.

Qn NO 3 :   a)  Most of the students were not aware of the recent amendments. The question had been asked to test the awareness of students to the same.

              b) & c)   These sub-divisions evoked vague answers from majority of students, despite the same being direct theory questions.

Qn. No. 4  : 

a)      Most students could not show the precise tax working, showing aggregation of agricultural income with non-agriculture income for rate purposes, and thereafter claim rebate of tax on agriculture income, as increased by basic exemption limit (for women assessee ).

b)       Several students could not write the answers clearly for this direct question.

c)       Few students gave precise answer for this sub-division.

Qn. No. 5 :

a)      This sub-division evoked mixed response. Many students gave correct answers for all sub-parts; rest of them answered many sub-parts incorrectly.

b)       Few students computed the Cenvat Credit correctly.

Qn. No. 6 :  Sub-division (a) relating to Transaction Value was answered satisfactorily by few candidates only Sub-division (b) requiring the students to state the situations in which raw material supplier will be treated as manufacture, was also not answered crisply.

Qn. No. 7 : Sub-divisions (a) and (b) which were problems, evoked poor response. Sub-divisions (c) was answered by few students only, in proper manner

Qn. No 8 :

a)      Only few students could properly explain how the Cenvat provisions could be used for providing duty relief to exported goods.

b)       This short notes sub-division was answered well by majority of students.

c)       Few students worked out both portions (sale to registered dealers and sale to unregistered dealers) correctly. In respect of sale to unregistered dealers, most students did not apply CST rate of 10% (as local State rate is more than 4%).

General Note :

1)      The overall performance indicated clear lack of  conceptual understanding of the subject, as well as ignorance of recent amendments.

2)      Most of the students exhibited poor communication skills; language used and the presentation style were below average.

3)      In case of  theory  questions, vague and lengthy answers were seen, instead of precise, crisp and to the point answers.

4)      Students should understand the basic statutory provisions properly, as the whole foundation rests on the same. All the latest amendments applicable for the examination, should be clearly understood.

INTERMEDIATE : STAGE  - II

Paper : 9 : Management Accounting – Performance Management

Question-wise Comment :

1)      Compulsory question was generally well answered other than for part q1(d), which required the candidates to “define” certain terms. In this case, many candidates failed to define the terms correctly, showing a lack of theoretical knowledge.

2)      Overall performance was good. However, some candidates failed to discuss briefly  the process of managing changes in an effective manner.

3)      Many candidate failed to work out of the unknown factors by using algebric formula  and ended with wrong answers. It appeared many did not grasp the requirements of the problem by applying their mind to the problem.

4)      Answers exhibited lack of knowledge regarding transfer pricing. In part (b) of the question many failed to evaluate the different options correctly and failed to arrive at the correct conclusion.

5)      In part (a) many candidates made the LP formulation without mentioning clearly whether the problem is in the nature of maximization or minimization. The constraints were also not clear to many.  In part (b), the answers were mainly incorrect, which indicated that the majority did not study this topic.

6)      Majority of the candidates attempting the questions got their answers correct. However, the presentation of the Budget in a proper manner was missing mostly.

7)      (a)  and (b) Poor answers clearly showing lack of knowledge of the subject.

8)      Majority of the answers are of average quality and did not cover the major points in a specific manner.

The overall performance of the candidates is considered fairly reasonable. However, further improvement is possible through more serious preparation and practice.

Suggestion for improvement :

Ø       More attention must be given towards orderly presentation of solutions to practical problems in suitable formats supported by sufficient working notes.

Ø       More extensive study of ICWAI study note and other suggested reference books will help the students to tackle theoretical questions in better manner.

Ø       Candidates should improve their skill of Language.

Ø       In theory questions majority of the candidates answered in a generalized manner. By answering briefly and by covering the topic specifically they can earn more marks and save time as well.

Paper :10: Advanced Financial Accounting

Question-wise Observation :

1)      To answer this question, students are required to have basic concept, rules & regulation of corporate accounting. Study Notes should be read effectively.

2)      Concept of Theo’s and thorough practice is the only answer to secure good  marks.

3)      In-depth knowledge is very much required to solve such problems.

4)      Text book knowledge is a must. Since, this is a professional examination, students should be serious to acquire knowledge from Study Notes of the Institute also.

5)      Cause of poor performance shows lacking of practice. Hard work is essential.

6)      Knowledge of solving Contract Account is very inadequate. Students should be serious in doing practice thoroughly.

7)      Format of schedule VI should be carefully studied and understood. Since, students will be future professional, they should be well-conversant with the format.

8)      Knowledge of Govt. Accounting is very much lacking. Students should be well-conversant with these accounting systems & procedures.

Students performance in majority of the cases was below standard. In order to improve their performance they should take up the course seriously like a professional students. Text book knowledge coupled with Study Notes   and regular practice will improve their performance.

Paper 11: Auditing

Qn. No. 1. a)  Reasons not clear in respect of :

i)                    Treatment of abnormal loss.

ii)                 Going concern – loss of market

iii)               Designing Samples

iv)                Capital and revenue profit for minority interest

b)

i)  Rights to visit by statutory is focused but not the validity of ‘Branch Auditors’ appointment.

ii)  25% holding confused with issued and paid up capital.

Qn No 2 :  b) In many cases feature of internal control discussed without reference to store.

Qn. No 3 :  The Examinees have not in depth knowledge regarding the subject matter.

Qn No 5 :   Mostly dealt in ‘Audit Process – EDP’  and not the impact on Audit approach.

Qn No 6 : Fair – generally in order.

Qn. No. 7 :  Poor answer. The Examinees should go through thoroughly  the Study Note.

Qn. No. 8 : Fair. c) Finally in term of Disclaimer of opinion not highlighted.

The examinees should have a thorough knowledge on the subject for scoring good marks. Though it appears to be a theoretical subject but scoring through ‘in’ depth knowledge will be as that of practical  subject. The student should go thorough the Study Note alongwith Accounting Standard. It will help to answer in a better way so that the answer on objective question will be better.

The text book as prescribed in the Study Note should be studied within the prescribed syllabus.

Paper 12 : Quantitative Methods

General Remarks :

Paper setting is quite good. It covers more or less the whole syllabus and gives ample scope to the examinees to score high marks. The short and objective type questions were answered quick well by the examinees. However, many failed to give proper reasonings. Problems based on integration and differentiation have been dealt with confusion by most of the examinees. Problems on testing of statistical inference have been seldomly  handled properly. Most of the candidates are found to have poor knowledge in these topics.

Question-wise Performance :

1.        Most of the students answered well excepting the question on determinant vectors and ixi type.

2.        Attempted but could not complete due to lack of knowledge.

3.        Lack of knowledge in constructing pay-off matrix.

4.        Only a few examinees attempted and credited some marks.

5.        Most of the examinees attempted part (b) only and credited full marks.

6.        Most of the candidates attempted and credited marks.

7.        Performance is average.

8.        A few candidates attempted and credited some marks.

9.        Performance is poor.

10.    Performance is good. Most of the candidates attempted and credited full marks.

11.    Performance is poor.

12.    Performance is quite satisfactory. About cent percent examinees attempted and scored well.

13.  Performance is good.

FINAL : STAGE - III

Paper 13 : operations And Project Management & control

Question-wise Observation :

1        By & large, majority of the examinee had fared reasonably well. Students are advised to go through Suggested Answers of previous exams & the Study material to gain conceptual knowledge for answering objective type questions.

2        Majority had attempted the question & performance is satisfactory. Students to practice numericles from Study Notes & reference books.

3        Many could not understand the technicalities in the question. Their answers exhibited lack of knowledge in respect of  cycle time, set up time etc. The overall performance had been dismal.  Students to consult Study Notes/Ref. Books & gain conceptual knowledge.

4        Overall performance  - average. Students to consult Study Notes/Ref. Books & gain conceptual knowledge.

5        Except for few cases, most of the answers were not properly organized. Most answers lacked qualities of good presentation.

6        Students not answered properly.  They should have firm grasp on the topics through proper study.

7        Majority did well.

8        Overall performance – not satisfactory. Absence of conceptual knowledge on the subject.

9        Overall performance good.

10, 11 & 12    Majority had attempted and got this right.

Paper 14 : Advanced Financial Management And International Finance

Question-wise Comments :

1. The part (a) and part (b) of this question were answered reasonably good by most of the examinees. Their performance was satisfactory.
2. Number of candidates attempted this question. (A) Their answers exhibited confused knowledge of the concept (i) Futures (Shares Tick Size) (ii) Call option (iii) profit/Loss on futures (iv) Profit/Loss on option Trading. The performance of the candidates has been quite dismal.  (B) Except few cases, answers were not appropriately organized. Most of the answers lacked the conceptual knowledge of the subject matter like – Intrinsic value of Share as per Dividend discount model. Overall performance was of average level.
3. The part (a) & (b) of this question were attempted fairly by majority. Except a few cases, most of them performed reasonably well.
4. Few candidates attempted this question. (a) Their answers exhibited confused knowledge of the concept – Capital budgeting – Decision under adjusted present value method (APV) (b) Most of the candidates who attempted this part of the question have not been able to understand the question and failed to make out what is required in the question. Their answers exhibited lack of knowledge of the subject matter – Mergers & Acquisition. The performance of the candidates has been quite dismal.
5. (a) Most of the examinees have solved the problem correctly. The performance was found to be satisfactory of most of the examinees. (b) The answers of this part were generally not appropriately organized. In many cases the answers showed that the examinees were not well versed with – (i) Swap charges (ii) Early extension of contract (Purchase/Sale) under Foreign exchange exposure (iii) Concept of Bid-Ask spread etc. Overall performance was poor.
6. (a) This part of the question was reasonably answered well by majority of the examinees. (b) & (c) Most of the examinees who attempted the part (a) and part (b) of this question have not been able to understand the question and failed to make out what is required in the question. Their answers exhibited lack of knowledge of (i) port folio Mgt. (ii) Factoring services. The performance of the examinees has been quite dismal.
7. Few examinees attempted this question. (a) Most of the examinees experienced difficulty in understanding the technicality in the question. They could not answer to this question correctly except first part in most cases. Their answers exhibited lack of knowledge of Business valuation considering High/Stable growth period of inputs; the overall performance was of above average level.
8. Most of the examinees who attempted this question have solved the problem correctly.

General Guidance :

Ø       The examinees are advised to read and understand the questions thoroughly and carefully before writing the answers.

Ø       To consult/read Standard reference books (latest edition)/ Study Notes thoroughly and analytically.

Ø       Read theoretical portion before attending the problems. Only theoretical knowledge will help them to develop the conceptual and computional skills.

Ø       To do adequate practice of practical/model problems to acquire comand over the fundamentals of the subject matters.

Ø       To give due attention towards orderly presentation of solutions of practical problems in suitable format along with sufficient working notes in order to secure good marks.

Ø       To make comprehensive preparation for acquiring indepth knowledge of the subject.

Ø       To avoid  irrelevant details in answering to the question.

Ø       To consult past questions and suggested answers of the Institute to know the patterns of questions and presentation of Answers to the questions.

Paper 15 : Strategic Management And Marketing

Question-wise Comments :

(1)   to (10)   Overall performance was not satisfactory. Students are advised to go through Study Materials and past Suggested Answers.

(11)    Overall performance is not good. The students should learn to read the question carefully and should give specific answer. Presentation  also should be good.

(12)   Conceptual knowledge of student are lacking. Students are required to go through Study         Material very careful, as well as  Ref. Books  to build up conceptual knowledge.

(13), (14) & (16)  Majority got it right. The presentation is very important and students should make a serious note of this.

(15)   Majority had not answered correctly. Students are advised to be specific in their answer.

(17) (b)  Very few students wrote the correct answer.

Paper 16 :  Strategic Tax Management

The questions were not too difficult but most of the students could not score due to lack of in-depth study.

Qn. 1 : The performance was reasonably good.

Qn. 2(a) : Most of the students are not clear as to when additional depreciation is allowed. Even in normal depreciation, the period for which depreciation is to be calculated is taken wrongly by many students.

(b) & (c) :  The students seemed to be confused and are vague about Service Tax and Fringe Benefit Tax. The students should do more practical problems to understand the concept.

Qn. 3:  General performance has not been good. Provisions of Section 4 of the C.E.Act have not been clearly understood by the students. Calculation of Assessable Value of Goods is not properly done.

Qn. 4: The students should realize that “Notes” about each item of asset or liability giving reason as to their admissibility or not, carry marks. Even if the overall answer may be correct, they may lose marks if the notes are not given. The general performance was of average standard.

Qn.5:  The distinction between Long Term Capital Gain and Short Term Capital Gain has not been understood by many candidates. The  requisite conditions for relief under section 54G have not been  stated clearly. Here again, the importance for notes giving the reasoning for treatment of each item, has not been understood by the candidates. Even if the calculations are correct and the final answer is right, they may lose marks if such notes are not given.

Qn. 6: The performance has been very poor. Students exhibit lack of knowledge of “manufacture” (Part a), “Assessable value” (Part b), and “Cenvat Credit under CE Act” (Part c).

Most of the students do not know about the recent amendment with retrospective effect by the Finance Act, 2005, to the effect that refining vegetable oil would amount to manufacture. Not many have written about the explanation for “packing”. Most of the candidates have answered that the cost of plain white cartons should be included in the assessable value of goods.

Students should study the latest amendments in the Law and their effect on the earlier decisions of the courts.

Qn. 7: Many of the students have not understood the question properly. The overall performance has been very poor.

Qn. 8 :  Overall performance is not bad.

General Observation :

Students exhibit lack of conceptual clarity, systematic and logical approach, and clear presentation with analytical explanation. More in-depth study is called for.

 FINAL : STAGE - IV

Paper 17:  Management Accounting – Decision Making

Question-wise Comments :

1. Very few students were able to give correct answer in respect of all the cases. Most of them were unaware to the calculation of product as required under absorption cost of part (e). A large number of candidates were unaware of the application to learning curve.  Students should understand the basic difference in calculation of profit under absorption costing and marginal costing they should be conceptually  sound in learning curve application.