summary of examiners

7/31/2019 Summary of Examiners

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SUMMARY OF EXAMINERS’ COMMENTS ON THE PERFORMANCE OF

CANDIDATES

PAPER – 1 : ACCOUNTING

General Comments

The performance of the candidates has 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 readand understand the Study Material thoroughly and analytically. Adequatepractice of solving practical problems is essential to acquire command overthe fundamentals of the subject. The solutions to practical problems must begiven in suitable formats along with sufficient working notes. It is suggestedthat the question paper should be gone throughcarefully before writing the answers.

Specific Comments:

Question1 In parts (ii), (iii), (v), (viii), (x), candidates could not answer thequestion in accordance with the relevant provisions of the AccountingStandards.

Question 2 Most of the candidates failed to give the required journal entriesin 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 thecorrect manner.

Question 4 In part (b) of the question, some candidates calculated theamount the amount of interest directly, without using the average due datemethod.

Question 5.(a) Some candidates erred in calculation of subscription received,purchase of sports equipment, opening balance of capital fund. They couldnot give the correct receipts and payments account and balance sheet of theclub.

(b) Many candidates committed mistakes in allocation of expenses betweenpre and post incorporation periods and consequently, in computation of preincorporation and post incorporation profits.



Question 6 Many candidates could not score good marks in this question asthe answers were not concise and to the point. In parts (iv) and (vi), theycould not apply the relevant provisions of the Accounting Standards. Theywere not aware of the disclosure requirements in the profit and loss

statement of a company in respect of corporate dividend tax which wasrequired 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 followingimprovements 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 answershave clarity and precision.3. Examinees to make use of the various Bare Acts.4. Examinees must grasp the questions correctly and not get confused asmentioned 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 NegotiableInstruments Act, 1881, and the Employees‟ Provident Funds andMiscellaneous Provisions Act, 1952.7. In the Communications part, performance of the students wassatisfactory. Nevertheless, the students should improve their writing andpresentation skills.Further, the students are advised to delve deep into the areas of draftingnotices/circulars/minutes/ legal deeds and documents etc.

Specific Comments

Question 1. The performance of the examinees was average in 1(a) while1(b) and 1(c) were answered satisfactorily. Some examinees had come tothe erroneous conclusion that there was no consideration involved inquestion 1(a) and that hence there was no contract in the given problem.

Question 2. Examinees‟ performance was quite satisfactory compared toquestion No.1, though both the questions are similarly patterned.



Question 3. The performance of the examinees was found to be mixed, withsome answering well, while others having failed to mention the relevantlegal provision, while still others were referring erroneously to the CentralGovernment 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 thosewho had attempted it fared poorly.

Question 7. This question was not answered well. Many examinees could notexplain 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 thethree 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 theexplanatory note vitiates the notice.

Question 11. Performance was average and the answers were vague, inmany cases.

Question 12. The performance was generally good, though the pragmaticreasons were found mixed up with certain general reasons that thecandidates had adduced on their own.

Question 13. Performance was satisfactory.

Question14.(a) Performance of the students was quite satisfactory. Thequestion was asked to test the students‟ knowledge about the merits anddemerits of informal form of communication.



(b) Most of the students attempted this question in a very poor manner. Thestudents failed to discriminate the difference between Notice and Agenda.The students must develop a logical understanding to tackle such a practicalquestion.

Question 15. Overall performance of the students was not satisfactory. Theformat of the Annual General Meeting was not followed by most of thestudents. The students are advised to practice the specimen of Minutes of Annual General Meeting.

Question16. Performance of the students was middling. They could not getthe essence of the question and drafted the Partnership Deed rather thanthe 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 andunderstanding of the subject. It is also observed that the candidates neglectthe theoretical aspects of the subject; they should go through the studymaterial carefully. A thorough practice and lots of reading of the subject isrequired 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 ableto understand the „imputed cost‟ as „input cost‟. Many of them were not ableto answer it appropriately.(ii) This practical question related to labour (Variance analysis of labour) wasattempted by the majority of the candidates. Maximum of the students werenot able to answer it correctly. They failed to depict the relationship of activity ratio, efficiency ratio and capacity ratio correctly.




( iii) This theory question part related to „Non Integrated Accounts‟ was notsatisfactorily answered by the majority of the students. Many of theexaminees 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 contractswere stated correctly by the students.

(v) This practical question part related to „Marginal Costing‟ was notsatisfactorily answered by many of the students. Many of them failed tocalculate BEP correctly.

(vi) This theory question related to „Non – Integrated Accounts‟ was not wellanswered by most of the candidates. Many of them failed to mention asituation where reconciliation statement of cost and financial account are notrequired.

Question2. This numerical question related to „Marginal Costing andAbsorption Costing‟ was attempted by less number of the examinees. Thestudents 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 coveredunder „Method of Costing (II)‟ was attempted by a large number of students.Most of the examinees had failed to take into account of the materialintroduced at the inception and hence could not prepare the statement of

equivalent production account, statement of cost and process accountcorrectly.

(b) This practical question related to „Standard Costing‟ was satisfactorilyanswered by majority of the students. Variance related to material andlabour was correctly calculated by most of the candidates.

Question4.(i) This numerical question related to „Labour‟ was wronglyanswered by maximum number of candidates. Most of the students wereable 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 numberof candidates. They were not able to show that how composite units arecomputed.

(iii) This numerical question related to „Material‟ is attempted by the



maximum number of students satisfactorily. EOQ was calculated by majorityof them.

(iv) This theory question related to „Budgets & Budgetary Control‟ was verywell 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 answeredcorrectly by most of the candidates.

(ii) Concept of Business Risk and Financial Risk was answered well bymajority of the candidates.


(iii) Differentiation between Factoring and Bills Discounting was well writtenby most of the candidates. However, few candidates differentiated betweenfactoring and discounting instead.

(iv) A large percentage of the candidates discussed the differentiationbetween 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 FixedAssets and Proprietor‟s Fund correctly.

Question 6 Majority of the candidates prepared the Cash Flow Statement oncorrect lines but failed to present it in the proper format. However, a fewcandidates could not work out cash flow from operating activities correctly.Further, the candidates have not presented their answers supported byproper working notes in preparation of cash flow statement.

Question 7.(a) Though a large percentage of the candidates preparedcorrectly the Income Statement, however, few of the candidates did notsupport their answers by proper working notes.(b) This part of the question was not well answered by majority of thecandidates. Most of them failed to take into consideration the loss of commission. Few of the candidates even added the commission to theincome instead of treating it as an opportunity lost.



Question 8.(i) Majority of the candidates answered well the two basicfunctions of Financial Management. However, a few of them discussed theobjectives of Financial Management instead.

(ii) A large percentage of the candidates attempted this part of the questionon short notes on Ploughing back of profits and Desirability factor. However,only a handful could discuss logically and in short. Few of the candidateshave written ploughing back of profits as profit on sale of old assets.

(iii) A large percentage of candidates explained well the concept of WeightedAverage Cost of Capital.

(iv) While most of the candidates attempted the problem, only a few of themcould calculate the value of the firms according to MM Hypothesis correctly.

4 : TAXATION PAPER General Comments

Many candidates have exhibited lack of knowledge of the provisions of theIncome-tax Act and Service Tax and VAT. They were also not aware of therecent amendments in the Income-tax Act.Further, most of the candidates have not given proper working notes forpractical problems. The presentation of answers is also poor in most cases.


Specific Comments

Question 1.(i) Many candidates have wrongly considered the purchase priceof 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.1,500under section 10(32) in respect of income of minor child, clubbed in thehands of Siddhant;(iii) Some candidates have wrongly taxed national award for humanitarianwork from the Central Government under the head “Capital gains” or

“Income from other sources”. Some others have totally ignored the samewithout 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 Governmentsecurities and interest on Post Office Monthly Income Scheme as exempt

income.

(b) (i) Most of the candidates have allowed interest under section 24 onpayment basis instead of due basis;(ii) Municipal taxes paid by the tenant was wrongly allowed as deductionfrom gross annual value in most of the cases.(c) Many candidates have not deducted the advance of Rs.70,000, receivedand retained on an earlier negotiation for sale of property, to arrive at thecost of acquisition.

Question 3.(i) Some candidates have wrongly treated share of profit fromfirm as taxable income and set off business losses against the same;(ii) Some candidates have wrongly set off brought forward business lossagainst income from house property of the current year;(iii) Many candidates have wrongly set-off long-term capital loss againstshort-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 taxand 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 78and have wrongly written about the order of set-off under each head of income. Some candidates have answered that loss can be carried forwardwithout any restriction even in case of change in constitution /succession inbusiness.

Question 5.(d) Few candidates wrongly took the net amount (net of TDS) asthe taxable receipt. Some candidates further deducted the amount of TDSfrom Rs.4,48,500 while others wrongly concluded that once TDS is deducted

no service tax is liable to be paid.


Question 6.(a) Majority of the candidates were ignorant about thepercentage 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 firmfor the purpose of determining the due dates.

Question 7.(d) Instead of mentioning that VAT is not applicable on lotterytickets, many candidates wrongly considered lottery ticket as exempt itemunder VAT.

Question 8.(b)(i) Many candidates wrongly concluded that the final burdenof VAT does not lie on the consumer.

(b)(ii) Most of the candidates provided general answers to this questioninstead of mentioning the procedure of filing of returns under VAT.

General Comments

The performance of the candidates was not satisfactory. Questions based onpractical application of Accounting Standards have not been answered well.It is also observed that the candidates neglect the theoretical aspects of thesubject; they should go through the study material carefully. Adequatepractice of solving practical problems is essential to acquire command overthe fundamentals of the subject. The candidates must present their answers

in organized manner and solutions to practical problems should be given inprescribed formats along with suitable working notes. Answer to the samequestion were scattered at many places in answer sheets of the candidates.It is advised that all parts of a particular question should be attempted atone place. It is suggested that the question paper should be gone throughcarefully 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 notsubstantiate their answers with the relevant provisions of the accountingstandards.

Question 2 Few candidates erred in computation of purchase considerationand goodwill and consequently, were not able to give the correct balancesheet of the amalgamated company.



Question 3 Majority of the candidates failed to compute the correct amountsof general reserve, securities premium and cash balance of Dee Ltd. as at31st march, 09 after giving effect to right issue and redemption of debentures. They could not calculate the number of shares issued and cashpaid and therefore, the correct balance sheet was not prepared.

Question 4 Many candidates did not understand conversion process of UKpound into Indian rupees for trial balance of a foreign branch. Somecandidates also converted H.O. balance and goods from H.O. at the year endexchange rates instead of considering their balances from H.O. books.Because of these errors, they could not prepare trading and profit and lossaccount and balance sheet of branch in H.O. books.

Question 5.(a) Most of the candidates were not aware of the format of profitand loss account prescribed for banking companies. They did not classifyincomes and expenses under schedules 13, 14, 15 and 16. Few among themerred in computation of provision for nonperforming assets, tax provisionand transfer to statutory reserve.

(b) Majority of candidates failed to give the required journal entries relatedto premium on buyback and creation of capital redemption reserve.Consequently, they could not prepare the balance sheet of Dee Ltd. as on1st April, 08 after buy back of shares.


Question6.(a) Few candidates erred in calculation of profit on realization andthe final settlement amount paid to the partners.

(b) The answers of the candidates exhibited lack of knowledge of theprovisions of AS 16 “Borrowing costs” and AS 20 “Earnings per Share”. Insub-part (i), only few candidates computed the correct amount of interestamount capitalized. For sub-part (ii), most of the candidates were confusedregarding treatment of buy back of shares. They were not able to computethe weighted average number of shares and thus failed to arrive at thecorrect 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 practicalproblems 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 thecandidates who answered all the questions within the main answer bookhave secured better marks than those who used many additional sheets.Some candidates tend to indulge in selective studies instead of payingattention to on the entire syllabus; hence, the students answered somequestions extremely well but were left perplexed by other questions , forcingthem 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 andtheir answers were in general.(b)(i) Many students have been confused over this part of the question andhave answered wrongly referring to AS 10 instead of AS 26.(ii) Many students‟ answers were correct. However a fe w students havegiven 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 elaboratetheir answers. A few students were confused, wrongly referring to AS 1.

Question 4(a) Poor performance of the students could be witnessed in thispart of the question.(b) Majority of the students‟ answers were irrelevant.


Question 4.(a) Many students have discussed income, expenses, assets andliabilities instead of discussing the audit procedure to be followed whileauditing 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 togive relevant provisions and explanations.

Question 7.(a) Many students did not understand the filling up of vacancy incase 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 studentswrongly referred to the method of vouching regular sales.(c) Majority of the students have performed this question well. A fewstudents have discussed the routine bank vouching and no specific detailsrelating to overdraft were given.

Question 8.(a) Poor performance of the students could be witnessed in thispart of the question.(b) Performance of the students was found satisfactory. A few students didnot understand the cut off arrangement.(b) Alternative: Many students have attempted this question. However a fewstudents‟ 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

MANAGEMENT PAPER

SECTION – A : INFORMATION TECHNOLOGY

General Comments

The examinees of IPCC are lacking in conceptual understanding wascomparatively low and there is a scope for further improvement of thesubject hence, most of the candidates attempted the paper withoutadequate preparation. Examinees have to improve the subject knowledge as

well as language skills for better performance. Examinees are advised tostudy the prescribed study material in depth. For giving appropriate answer,understanding of the technical terms with relation to information technologyis required.




Specific Comments

Question 1.(a) Almost all the examinees answered this question but notgiven satisfactory explanation, especially to touch screen, Layer 3 (NetworkLayer), Data Dictionary. Data Dictionary was referred as Literary Dictionaryand USB (Universal Serial Bus) was misinterpreted as UPS (UninterruptedPower Supply).

(b) Most of the examinees answered this question but not up to theexpected level. Specially, in case of transaction log, the explanation was notsatisfactory. Random Access was misinterpreted as RAM (Read OnlyMemory).

Question 2.(a) The performance of the examinee was not satisfactory.Examinees neglected the study materials and gave general answer. In somecases, image processing was misinterpreted as photo printing.(b) Performance was satisfactory, except that, many of the examineesexplained components of DSS instead of characteristics of DSS.

Question 3.(a) Performance of the examinees was found to be moderate. Inmost of the cases the factors to be considered for best file organization werenot 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 wasnoticed while writing the output sequence of the given flowchart.(b) Most of the examinees answered this question, but examinees mademistakes in calculations within the loop.

Question 5.(a) Majority of the examinees answered this question on ringnetwork 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 havenot provided proper question numbers.

Some candidates gave vague answers. It is advisable to bespecific and not write irrelevant answers.

Handwriting of many examinees was illegible. Analytical and planned presentation was missing in most cases.


Special Comments

Question 6. Although majority of the candidates were able to provideanswers in terms of correctness or incorrectness of the statements, theywere not able to substantiate their answers with adequate and validreasoning. Problems were more in part (b) related to corporate culture andpart (c) related to opportunity and challenge in “change”.

Question 7. The answer of the examinees reflected that most of them werenot aware about the relevance of TOWS matrix in strategic planning process.Part (b) was not well attempted by the examinees which was related to theframing of the mission statement of a company.

Question 8. Majority of the candidates attempted this question but only fewof them were able to explain Porters five forces correctly. The overallperformance of the examinees in this question was average.

Question 9. This question was divided into three parts. Most of theexaminees were able to explain six sigma but for part (b) which was relatedto differentiate six sigma with other quality programs and part (c) which wasrelated to six sigma themes were either not attempted by the candidates orthey 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 partwas alright but application part was found wanting. The candidates securedgood marks in conceptual part of each question but they could not obtaingood 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 highas 17-18 marks.

summary of examiners

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