P1: Cost 100

Accounting (COA)____________________________
MARKS

• TECHNICAL
COMPETENCIES PREDOMINANTLY EXPECTED
• BUSINESS
TO ASSESS APPLIED PROFICIENCY
• PROFESSIONAL

SYLLABUS STRUCTURE
This course comprises the following modules with the relative learning weightage:

Module Weight

A Cost accounting fundamentals 10%

B Cost accounting systems 20%

C Cost accounting methods and techniques 45%

D Contemporary cost accounting tools 25%

COURSE DESCRIPTION___________________________________________________________________________________
Cost accounting provides in-depth knowledge of understanding and applying
different cost accounting methods and techniques to manage different cost
elements considering the nature of organizational operations. In the process,
analysis and decision orientation is also emphasized. The subject covers
fundamentals of cost accounting concepts introducing Bangladesh Cost
Accounting Standards; elements of costs in explaining different cost elements;
appropriateness and application of different cost accounting methods and
techniques; and also provides preliminary idea of the contemporary cost
accounting issues. On completion of this subject students will be developed skills
of analysis, evaluation and synthesis in cost and in the process, created an
awareness of current developments and issue in the area.

COURSE OBJECTIVES_____________________________________________________________________________________
The main objective of this course is to enable learners to provide in-depth
knowledge of cost accounting concepts, principles and methods to apply and
analyze cost data to meet the requirements of different manufacturing
organization. This course ensures the conceptual foundation of different types
of cost and its implication in the organization for a learner to provide data that

CMA Professional Program Handbook P1 109

 are required for management decision making. The course aims to provide the
basic concepts and principles of cost accounting that one can apply in preparing
management reports and provide a base to develop analytical skill.

COURSE LEARNING OUTCOMES________________________________________________________________________

On successful completion of this course, the student will be able to:
1. describe the basic of cost accounting concepts, conventions and doctrines;
2. understand the basic principles of Bangladesh Cost Accounting Standards;
3. identify and ascertain cost of a cost object preparing vital cost statements;
4. apply different cost accounting methods and techniques;
5. build argument in selecting a costing method/technique in a given context;
6. apply and analyze the principles relating to the costing and control of
different organizational resource; and
7. advise the application of cost accounting in a digital and lean management
ecosystem.

DETAIL CONTENTS_______________________________________________________________________________________

MODULE A Cost accounting fundamentals

This part covers definition of cost accounting; comparison of cost

PART A1 accounting with financial and management accounting; the role of cost
Introduction to accounting; methods & techniques of cost accounting; characteristics
cost accounting of an ideal cost accounting systems; installation of a cost accounting
systems; modern trends in cost accounting; etc.

PART A2
This part covers Bangladesh Cost Accounting Standards Board;
Bangladesh
objectives and functions of cost accounting standards board;
cost accounting
Bangladesh cost accounting standards; etc.
standards

This part covers cost concepts; cost classification for inventory

PART A3 valuation and profit measurement; describe how information can be
Cost concepts, used to identify performance within an organization; explain the
classification and differences between financial information requirements for
cost statements companies, public bodies and society; statement of cost of goods
manufactured and cost of goods sold; etc.

End of Module A

MODULE B Cost accounting systems

This part covers classification of materials; objectives of materials

PART B1
management and control; accounting for materials; stock control in
Costing of
advanced manufacturing environment; inventory system – periodic
materials
system & perpetual system; maintenance of general ledger and

110 P1 CMA Professional Program Handbook

 MODULE B Cost accounting systems

subsidiary ledger; methods of pricing (FIFO, LIFO, Weighted/Moving

Average); inventory valuation; pricing of returns – selection of pricing
method; recording; corresponding BCAS; etc.

This part covers labor productivity, idle time, overtime, time and
PART B2
motion study, work study, inventive wage plans; recording and
Costing
controlling labor costs; employee cost reporting and measurement of
of labor
efficiency; learning curve, corresponding BCAS; etc.

This part covers the concept of overheads; predetermined overhead

PART B3 rates; applied and control overhead; allocation, apportionment, and
Costing of absorption of overhead; treatment of over or under absorption of
overhead overheads; accounting for specific items of production overheads;
treatment of non–manufacturing overheads; corresponding BCAS; etc.

PART B4
This part covers maintaining cost accounting records (CARs); learn
Cost accounting
how CARs are maintained for different sectors/industries; total cost
records as per
management and framework process; etc.
BCAS

End of Module B

MODULE C Cost accounting methods and techniques

This part covers job and batch costing; nature of job costing; job cost
PART C1 sheet and job ledger; recording costs on jobs; batch costing – economic
Job, batch and batch quantity; contract costing; differences between job and contract
contract costing costing, calculating the percentage of completion, calculating profit
based on percentage of completion method; etc.

This part covers the basics of process costing; objectives of process

cost system; characteristics of a process cost system; comparison of
PART C2 job order and process cost accumulation system; process costing
Process under FIFO, LIFO and weighted average cost flow methods; treatment
costing of normal loss, abnormal loss, normal and abnormal losses with scrap
value and waste with disposal cost; addition of units and effect on cost;
treatment of abnormal gain in process costing; etc.

PART C3 This part covers distinguishing features of service costing; features of

Service service organization; cost units and analysis; application of service
costing costing in different organization; etc.

CMA Professional Program Handbook P1 111

 MODULE C Cost accounting methods and techniques

This part covers purpose of using standard costing; variance analysis;

materials, labor and overhead standards; variance analysis for costs,
PART C4 volume and price variances, sales mix and yield variances;
Standard responsibility analysis for cost variances; reconcile standard profit
costing and actual profit using absorption and marginal costing systems;
accounting disposition of variances; interpretation of variances and
inter-relationships between variances; etc.

PART C5
This part covers joint products in process accounts; accounting
Joint product
treatment of by-products; methods of allocation of joint cost; decision
and by-product
to sell by-product at the time of separation or by further process; etc.
costing

This part covers outline of an ABC system; cost pools and cost drivers;
PART C6 designing an ABC system; absorption costing versus ABC; marginal
Activity based costing versus ABC; benefits of ABC System; application of ABC/ABM;
costing use of ABC/ABM in improving activities; variance analysis in ABC
system; ABC in service organizations; etc.

End of Module C

MODULE D Contemporary cost accounting tools

This part covers underlying philosophy of TC; western vs. Japanese

PART D1 cost management; factors influencing the TC process; process of target
Target costing; application of TC indifferent sectors with special focus on
costing (TC) market driving, product level and component level TC; TC vs. Kaizen
costing; corresponding BCAS; etc.

This part covers cost of quality models; P.A.F models of QC; trade-off
PART D2
between the levels of conformance and nonconformance costs;
Quality
opportunity/intangible cost models; ABC models of QC; application of
costing (QC)
QC indifferent sectors; corresponding BCAS; etc.

PART D3 This part covers concept of LCC; underlying features of LCC;

Life-cycle significance and benefits of LCC; application of LCC; LCC for project;
costing (LCC) limitations of LCC; life-cycle budgeting; corresponding BCAS; etc.

End of Module D

112 P1 CMA Professional Program Handbook

RECOMMENDED BOOKS AND LEARNING MATERIALS_______________________________________________

Primary Textbook
ICMAB Learning Manual for Cost Accounting.

Recommended Textbooks
1. Bhimani, A., Horngren, C. T., Datar, S. M., & Rajan, M. V. (2019). Management
and Cost Accounting, Seventh Edition, Pearson.
2. Matz, A., & Hammer, L. H. (1990). Cost Accounting: Planning and Control,
Tenth Edition, South-Western Publishing Company.
3. Vanderbeck, E. J. (2012). Principles of Cost Accounting, Sixteenth Edition,
Cengage Learning.
4. Drury, C. M. (2017). Management and Cost Accounting, Tenth Edition,
Springer.
5. Blocher, E. J., Stout, D. E., Juras, P.E., & Smith, S. (2002). Cost Management: A
Strategic Emphasis. Eighth Edition, McGraw Hill Education.

Reference Books/Other Learning Materials

1. Khan, M. Y., & Jain, P. K. (1999). Theory and Problems of Management and
Cost Accounting, Second Edition, Tata McGraw Hill.
2. Study Manual on Cost and Management Accounting (2020). The Institute of
Company Secretaries of India.

CMA Professional Program Handbook P1 113

 E1: Auditing 100
(AUD)_____________________________________
MARKS

• TECHNICAL
COMPETENCIES PREDOMINANTLY EXPECTED
• BUSINESS
TO ASSESS APPLIED PROFICIENCY
• PROFESSIONAL

SYLLABUS STRUCTURE
This course comprises the following modules with the relative learning weightage:

Module Weight

A Introduction to Audit and Assurance 20%

B Internal Control and Audit Framework 30%

C Assurance Engagement and Reporting 40%

D Auditors Role in Emerging Areas 10%

COURSE DESCRIPTION___________________________________________________________________________________
The Auditing course is divided into four major segments. It starts with the
nature, purposes, and scope of audit assurance engagements. In explaining audit
engagements, the responsibilities, and liabilities of both the auditor and
management are explained. Focus is then given to the statutory audit, its
regulatory environment, governance, and professional ethics relating to audit
and assurance. It then leads to planning the audit and assessing relevant risks.
The course also covers a range of areas relating to an audit of financial
statements including the scope of internal control and the role of internal audit.
These include evaluating internal controls, audit evidence and a review of the
financial statements. In addition to final review procedures, the final section
concentrates on reporting, including the form and content of the independent
auditor’s report. It also explains the role of an Auditor in emerging areas.

COURSE OBJECTIVES_____________________________________________________________________________________
This course focuses on the basic knowledge of audit and assurance, the legal and
regulatory environment of assurance engagement and the professional and
ethical considerations for the assurance provider. It also seeks to provide the
learner with the ability to identify, analyze and conclude on an assurance

114 E1 CMA Professional Program Handbook

 engagement in the context of best practice. It also promotes the decision-making
skills and administrative competence relevant to financial accounting and
corporate management in general.

COURSE LEARNING OUTCOMES________________________________________________________________________

On successful completion of this course, the student will be able to:
1. understand the fundamental requirements of assurance engagements;
2. evaluate the requirements of effective internal control systems;
3. demonstrate the relevant conceptual and legal requirements in auditing;
4. apply International Standards on Auditing in audit activities;
5. implement professional code of ethics in performing the role of an auditor;
6. analyze the implications of IT on audit and assurance; and
7. prioritize the contemporary issues influencing the work of an auditor.

DETAIL CONTENTS_______________________________________________________________________________________

MODULE A Introduction to Audit and Assurance

PART A1 This part covers concept of audit and assurance; key elements of an
Fundamental assurance engagement; benefits and limitations of assurance;
concepts and objectives, nature, purpose and scope of assurance engagement; levels
Scope of assurance; internal & external audit; role of audit committee; etc.

This part covers management responsibilities; assurance providers’

PART A2 responsibilities; error and fraud, money laundering, compliance with
Responsibilities law and regulations; expectations gap; auditors’ liabilities: statutory
and professional liabilities, contractual liabilities under contract law, liabilities under
liabilities common law, liabilities for professional misconduct, other liabilities;
management and third-party liability; etc.

End of Module A

MODULE B Internal Control and Audit Framework

This part covers meaning and categories of IC; nature and importance
PART B1
of IC; components of IC; fundamental principles of effective control
Internal
systems; systems of IC; weaknesses in the IC system; communication
control (IC)
on IC and management letter; IC questionnaire; IT control; etc.

This part covers need for professional ethics; code of ethics:

PART B2 fundamental principles, threats to objectivity and independence,
Professional safeguards against the threats; conflict of interest and suggested
ethics courses of action to resolve ethical conflicts relating to integrity,
objectivity, independence, and Confidentiality; etc.

CMA Professional Program Handbook E1 115

 MODULE B Internal Control and Audit Framework

This part covers legal provisions under Companies Act, 1994:

appointment of auditor, qualification & disqualification of an auditor,
rights, powers, responsibilities and duties of auditors, qualification
PART B3
and disqualification of auditors, resignation and removal of auditors,
Framework
penalties; international framework for assurance engagements; the
and legal
International Auditing and Assurance Standards Board (IAASB);
provision
International Standards on Auditing (ISA); role of regulators like FRC,
BSEC, ICAB, etc.; requirements under Financial Reporting Act, 2015;
regulatory and legal issues relating to financial audit; etc.

End of Module B

MODULE C Assurance Engagement and Reporting

This part covers obtaining the engagement; risk assessment (ISA 315,
ISA 330); engagement acceptance (ISA 800); scope of the engagement
(ISA 200, ISA 210); audit planning(ISA 300, ISA 320, ISA 520);
performing the engagement (ISA 710, ISA 720, ISA 800); test of control
PART C1 and substantive procedures; obtaining evidence, sampling and
Process of documentation (ISA 230, ISA 500, ISA 501, ISA 505, ISA 530); taking
assurance assistance (ISA 610, ISA 620); quality control (ISA 220); completion,
engagement review and reporting: subsequent events, going concern (ISA 560, ISA
570, ISA 700); written representations (ISA 580); evaluation of results
of assurance (ISA 450); audit finalization and final review; reporting
to the engaged party; reporting issues (ISA 701, ISA 705, ISA 706, ISA
710, ISA 800); etc.

This part covers auditor’s responsibility to consider fraud (ISA 240);

consideration of laws and regulations (ISA 250); communication of
audit matters (ISA 260, ISA 265); entities using service organizations
PART C2 (ISA 402); initial audit engagements: opening balances (ISA 510);
Other relevant accounting estimates (ISA 540); related parties (ISA 550); special
standards considerations (ISA 600, ISA 805); summary financial statements (ISA
810); international standards on assurance engagements;
international standards for review engagements; International
Standards on Quality Control (ISQC); etc.

End of Module C

MODULE D Auditors Role in Emerging Areas

This part covers audit in a computerized environment; systems and

PART D1
processes in place that secure company data; risks associated with a

116 E1 CMA Professional Program Handbook

 MODULE D Auditors Role in Emerging Areas

Information company's information assets in the IT environment; methods of risk

technology and management; information management processes in compliance with
information IT-specific laws, policies and standards; inefficiencies in IT systems
systems audit and associated management; Computer-Aided Auditing Technique
(CAAT); process of information systems auditing: planning (IS audit
standards, guidelines, code of ethics, risk-based audit planning) and
execution (performing IS audit, reporting & communication
techniques, quality assurance); etc.

PART D2
This part covers IFAC guidelines for public sector audit; special audit;
Public sector
etc.
& special audit

End of Module D

RECOMMENDED BOOKS AND LEARNING MATERIALS_______________________________________________

Primary Textbook
ICMAB Learning Manual for Auditing.
Recommended Textbooks
1. Arens, A. A., & Loebbecke, J. K. (1997). Auditing: An Integrated Approach,
Seventh Edition, Prentice Hall.
2. Saeed, K. A. (2013). Advanced Auditing, Asianet-Pakistan.
3. Tandon, B. N., Sudharsnam, S. & Sundharabahu, S. (2013). A Handbook of
Practical Auditing, Fifth Edition, S. Chand & Company Limited, India.
4. Gupta, K. (2005). Contemporary Auditing, Sixth Edition, McGraw Hill
Education.
Reference Books/Other Learning Materials
1. Leung, P., Coram, P., Cooper, B., Redgen, K., & Canestrari-Soh, D. (2023). Audit
and Assurance, Second Edition, Wiley.
2. Handbook of International Quality Control, Auditing, Review, Other Assurance
and Related Services Pronouncements (2021). International Auditing and
Assurance Standards Board, IFAC.
3. Handbook of the International Code of Ethics for Professional Accountants
(2023). International Ethics Standards Board for Accountants, IFAC.
4. The Companies Act, 1994. Ministry of Commerce: Government of the
People's Republic of Bangladesh.
5. Study Manual on Assurance (2016). The Institute of Chartered Accountants
of Bangladesh.
6. Study Manual on Audit and Assurance (2016). The Institute of Chartered
Accountants of Bangladesh.
7. Study text on Audit and assurance (2021). Association of Chartered Certified
Accountants.
8. Study text on Advanced audit and assurance (2021). Association of Chartered
Certified Accountants.

CMA Professional Program Handbook E1 117

 F1: Financial 100
Management (FIM)___________________________
MARKS

• TECHNICAL
COMPETENCIES PREDOMINANTLY EXPECTED
• BUSINESS
TO ASSESS APPLIED PROFICIENCY
• PROFESSIONAL

SYLLABUS STRUCTURE
This course comprises the following modules with the relative learning weightage:

Module Weight

A Foundation of Finance 20%

B Financial Analysis 10%

C Investment Decisions 20%

D Financing Decisions 25%

E Dividend Decisions 10%

F Working Capital Management 10%

G International Financial Management 5%

COURSE DESCRIPTION___________________________________________________________________________________

This course introduces different financial management techniques and explains

how managers use these techniques in a firm to achieve its objectives of value
maximization of invested assets. It covers theories, concepts, assumptions, and
mechanics underlying financial decisions, viz., investment, financing, dividend
and working capital management. The contents have been arranged to develop
the conceptual and analytical abilities of the aspiring professional accountants.
Similarly, various financial techniques have been incorporated for apt financing
and investment decision to achieve organization’s goal. Apart from fundamental
issues, analysis of contemporary financial matters has been given adequate
consideration to enable students to develop their skills in formulating suitable
policy framework for the entity and fit them to meet the demand of the day.

118 F1 CMA Professional Program Handbook

COURSE OBJECTIVES_____________________________________________________________________________________

This course aims to develop the knowledge and skills of aspiring professional
accountants about different functions of financial management so that they can
perform their role effectively in making various financial management decisions.

COURSE LEARNING OUTCOMES________________________________________________________________________

On successful completion of this course, the student will be able to:

1. understand the basic concepts of financial management in an organization;
2. analyze financial statements to measure the financial performances of an
organizations;
3. implement valuation techniques for various securities;
4. apply appropriate investment appraisal techniques for making investment
decisions;
5. recommend capital requirements of businesses and financing options;
6. apply different techniques for working capital management; and
7. identify, evaluate, and manage different financial risks of an organization.

DETAIL CONTENTS_______________________________________________________________________________________

MODULE A Foundation of Finance

This part covers basic concept of finance and financial management;

PART A1
major financial decisions; role of finance manager; goal of a firm: profit
Introduction
maximization vs. wealth maximization; agency problems and control
to financial
of corporation; corporate governance; markets and institutions; types
management
of market; etc.

This part covers the role of time value in finance; present and future
PART A2 value of single amounts; present and future value of annuities; mixed
Time value streams; compounding interest more frequently than annuity;
of money continuous compounding; present and future value of uneven cash
flow stream; loan amortization; special applications of time value; etc.

This part covers definition and measurement of risk and return of

PART A3 investors; measure risk; using probability distributions to measure
Risk and expected return and standard deviation; coefficient of variation;
return attitudes toward risk; the Capital Asset Pricing Model (CAPM): a risk
and return model; etc.

This part covers different types of bonds and the concept of bond
valuation; bond valuation: perpetual bonds, bonds with finite
PART A4 maturity, zero-coupon bonds; determination of the duration of bonds;
Valuation debt vs. equity; preferred stock vs. common stock; characteristics,
of securities advantage and disadvantage of preferred stock and common stock;
classification of common stock; differentiate among bond, preferred
stock and common stock; valuation of preferred stock; valuation of

CMA Professional Program Handbook F1 119

 MODULE A Foundation of Finance

common stock using the different model; decision making and

common stock value; concept and type of option; valuation of various
types of option; economics of option; determinants of bond yields:
yield to maturity (YTM); etc.

End of Module A

MODULE B Financial Analysis

PART B1 This part covers financial statements; different tools and techniques
Financial of analysis of financial Statements; ratio analysis: different types of
statement ratios; income statement and balance sheet ratios; market ratios;
analysis trend analysis; common-size and index analysis; etc.

End of Module B

MODULE C Investment Decisions

This part covers nature and principles of capital budgeting; cash flow
estimates and determination of relevant cash flows; evaluation
techniques: discounted cash flow techniques; time-adjusted
PART C1 techniques; traditional techniques; capital budgeting under risks and
Capital uncertainty; inflation and capital budgeting; project selection under
budgeting capital rationing; dependency and mutually exclusive projects;
ranking problems; multiple IRR and No IRR problem; Modified
Internal Rates of Return (MIRR); common capital budgeting conflicts;
project monitoring: progress reviews and post-completion audits; etc.

This part covers concept of cost of capital; components of cost of

funds; component weights; explicit and implicit costs; measurement
of cost of capital; cost of debt, cost of perpetual debt, cost of preference
PART C2
share, cost of equity, cost of retained earnings; dividend approach;
Cost of
capital asset pricing model approach; required return vs. cost of
capital
capital; computation of over-all cost of capital; marginal cost of
capital; risk adjusted WACC; taxes, the cost of capital, and the value of
the company; costs of financial distress; etc.

End of Module C

120 F1 CMA Professional Program Handbook

 MODULE D Financing Decisions

This part covers concept of leverage; types of leverage; operating

PART D1
leverage; degree of operating leverage (DOL); operating break-even
Operating,
analysis; DOL and the break - even point; DOL and business risk;
financial and
financial leverage: degree of financial leverage (DFL); financial break-
combined
even analysis; indifference analysis; DFL and financial risk; total
leverage
leverage: degree of total leverage (DTL) and total firm risk; etc.

This part covers capital structure concept and overview; capital

structure and financial structure; capital structure theories; net
PART D2
income approach; Modigliani-Miller (MM) approach; traditional
Capital
approach; total value principles; presence of market imperfections
Structure
and incentive issues; the effect of tax; financial signaling; optimum
capital structure: static trade-off theory; etc.

This part covers selecting sources of equity finance; methods of

PART D3 flotation; right issues; Theoretical Ex-Right Price (TERP) and yield
Debt and adjusted TERP; venture capital, angel financing, crowd funding; types
equity of debt finance; selecting appropriate debt instruments; debt finance:
financing security; covenants; interest rate risk and refinancing risk exposures;
etc.

PART D4 This part covers concept of leasing; financial evaluation of leasing;

Lease financing buying vs. leasing decision; economics of leasing; etc.

End of Module D

MODULE E Dividend Decisions

This part covers passive vs. active dividend policies; irrelevance of

dividend: Modigliani and Miller (MM) hypothesis and model;
relevance of dividends: Walter’s model and Gordan’s model;
determinants of dividend policies: Legal, contractual, and internal
constraints and restrictions; owner’s considerations; capital market
PART E1 considerations; different practical implications: taxes; clientele effect;
Dividend bird in hand argument; signaling effect; desire for current income,
policy uncertainty resolution; information content of dividend; residual
dividend policy; scrip dividends, stock splits; share repurchases: share
repurchase methods; financial statement effects of repurchases;
valuation equivalence of cash dividends and share repurchases: the
baseline; the dividend vs. share repurchase decision; analysis of
dividend safety; etc.

End of Module E

CMA Professional Program Handbook F1 121

 MODULE F Working Capital Management

This part covers working capital concepts; classification of working

PART F1
capital; determinants of working capital; operating cycle;
Theory,
computation of working capital; optimal amount (or level) of current
planning and
assets; financing current asset; short-term and long-term mix;
financing
hedging (maturity matching) approach; risk and profitability; etc.

PART F2 This part covers motives for holding cash; factors determining cash
Cash and needs; cash management strategies and techniques; speeding up cash
marketable receipts; slowing down cash payouts; cash balances to maintain
securities compensating balances and fees; investment in marketable securities;
management Baumol model of cash management; etc.

This part covers credit and collection policies: credit standards; credit
PART F3
terms; default risk; collection policy and procedures; cost and
Receivables
benefits; analyzing the credit applicant: sources of information; credit
management
analysis; payment terms and settlement discount; etc.

End of Module F

MODULE G International Financial Management

This part covers multinational company and its environment; sources

PART G1 of foreign currency, foreign exchange market, exchange rate risk
Financial management and foreign investment analysis; spot rates and forward
management foreign exchange rates; international parity conditions; transaction
in international exposure; accounting exposure; international money and capital
operations markets; capital budgeting, capital structure and working capital
management in an international setting; etc.

End of Module G

RECOMMENDED BOOKS AND LEARNING MATERIALS_______________________________________________

Primary Textbook
ICMAB Learning Manual for Financial Management.

Recommended Textbooks
1. Khan, M. Y., & Jain, P. K (2018). Financial Management: Text, Problems and
Cases, Eighth Edition, McGraw Hill Education Private Limited, India.
2. Ross, S. A., Westerfield, R. W., & Jordan, B. D. (2021). Fundamentals of
Corporate Finance, Thirteenth Edition, McGraw Hill.
3. Linton, D. E. (2020). Foundations of Investment Management: Mastering
Financial Markets, Asset Classes, and Investment Strategies, J. Ross
Publishing.

122 F1 CMA Professional Program Handbook

Reference Books/Other Learning Materials
1. Brigham, E. F., & Daves, P. R. (2021). Intermediate Financial Management,
Fourteenth Edition, Cengage Learning.
2. Pandey, I. M. (2021). Financial Management, Twelfth Edition, Pearson.
3. Van Horne, J. C., & Wachowicz, J. M. (2009). Fundamentals of Financial
Management, Thirteenth Edition, Prentice Hall.
4. Besley, S., & Brigham, E. F. (2007). Essentials of Managerial Finance,
Fourteenth Edition, South Western College Publications.
5. Jones, C. P. (1993). Introduction to Financial Management, Richard d Irwin.

CMA Professional Program Handbook F1 123

 R1: Fundamentals of Tax, VAT & 100
Public Financial Management (TPF)______________
MARKS

• TECHNICAL
COMPETENCIES PREDOMINANTLY EXPECTED
• BUSINESS
TO ASSESS APPLIED PROFICIENCY
• PROFESSIONAL

SYLLABUS STRUCTURE
This course comprises the following modules with the relative learning weightage:

Module Weight

A Direct Taxes 40%

B Indirect Taxes 30%

C Public Financial Management 30%

COURSE DESCRIPTION___________________________________________________________________________________

This course is designed to present the fundamentals of direct and indirect taxes
of the country along with the knowledge domain of public financial management
to develop technical competence, professional skills, values, and ethics among
aspiring professional accountants. In the direct tax segment, this course focuses
on the fundamental provisions of the income tax and the gift tax so that the
candidates can develop required proficiency about the topics to apply the
knowledge in identification and evaluation of the given situation in a
straightforward way. Besides, this module covers the basic provisions of the
Value Added Tax (VAT) and the Customs Duties as an indirect tax to develop
technical knowledge. Finally, this course includes the fundamentals of public
financial management so that the candidates can gain an elementary idea about
the financial management of the government and its process.

COURSE OBJECTIVES_____________________________________________________________________________________

The course aims to provide candidates with a fundamental understanding of the

taxation and public financial management system so that they can develop their
knowledge on the subject matters and able to identify and evaluate the
implication of tax provisions on individuals and business entities and the
government’s financial management process.

124 R1 CMA Professional Program Handbook

COURSE LEARNING OUTCOMES________________________________________________________________________

On successful completion of this course, the student will be able to:

1. understand tax, VAT, and public finance within the regulatory framework;
2. determine assessable income and allowable deductions for individuals and
body corporate;
3. identify the provisions about advance payment of tax, submission of returns
and assessment procedures for preparation of appropriate tax strategy;
4. understand the tax administration procedures including power and
authority for imposition of penalty;
5. apply practical knowledge of tax and VAT within the local context;
6. demonstrate business skills in income tax, VAT and supplementary duty,
customs, gift tax, travel tax, excise duty and baggage rules of the country;
7. develop basic knowledge on public financial management of Bangladesh.

DETAIL CONTENTS_______________________________________________________________________________________

MODULE A Direct Taxes

This part covers (a) Principles of Taxation, Taxation System in

Bangladesh, and Emerging Issues in Taxation: Principles/canons of
taxations; impact, incidence and effect of taxation; objective of
taxation; rights and obligations of taxpayers; scope and structure of
tax system in Bangladesh; current trend and recent update in taxation;
PART A1 potential impact of emerging issues in taxation; etc., (b)) Tax
Tax structure Administration, Power of Authorities, and Imposition of Penalty:
of Bangladesh Appointment of income tax authorities; administrative and judicial
and authority; delegation of powers; appointment; subordination; power
professional to call for information, inspection, survey, enquiry, search and seizure;
ethics penalty for non-maintaining accounts, failure to file return, fake TIN,
advance tax, concealment of income, fake audit report and others; etc.,
and (c) Ethics and Professional Skepticism: Ethical behavior;
principles of IESBA code of ethics; ICMAB code of ethics; threats and
safeguard; conflict of interest; tax avoidance and evasion; ethical
conflict resolution; confidentiality; etc.

This part covers (a) Statutory Heads of Income, Computation of

Income Tax and Set-off and Carry-Forward of Losses: Scope of total
income; deemed income; statutory heads of income and tax
computation (income from employment, rent, agriculture, business,
capital gains, financial assets, other sources); non-assessable income;
PART A2
tax-free income; unearned and earned incomes; domestic and foreign
Income tax
incomes; regular and casual incomes; income subject to regular tax
assessment
rate and income subject to special tax rate ; charge of income tax; set-
and payment
off and carryforward of losses; unabsorbed depreciation; etc., (b)
Payment of Tax before Assessment: Understanding the concept of
advance tax and tax deducted at source (TDS); benefits of AT and TDS;
TDS deducting authority; TDS rates and procedure; consequence of
failure to deduct/collect tax at source; collection and payment

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procedures of TDS and AT; provisions for minimum tax; computation

and payment of advance tax; consequence of failure to pay advance
tax; payment of tax on the basis of return; etc., and (c) Return
Submission and Assessment Provisions: Return of income and
withholding tax and timeline; audit of withholding tax; notice for filing
return; revised return; statement of assets, liabilities and lifestyle;
obligation of furnishing information regarding salary and return filing,
interest and dividend; forms and templates of various returns.;
definition & cycle of assessment; assessment provisions (provisional
assessment, universal self-assessment, minimum tax, spot
assessments, assessment after hearing, best judgment assessment,
assessment in case of income escaping income, person leaving
Bangladesh, deceased person and limitation for assessment); etc.

PART A3 This part covers Fundamentals of Gift Tax, Travel Tax, Baggage Rules,
Gift tax and Excise Duty: Gift and scope of gift tax; exemptions; valuation of
and others gift; imposition of gift tax rates; travel tax; baggage rules; etc.

End of Module A

MODULE B Indirect Taxes

This part covers (a) Overview of VAT System in Bangladesh and

Introduction to VAT Law and Rules: Nature of value added tax; supply
cycle; characteristics of value added taxes; consumption based tax
system; income based tax system; indirect tax and direct tax; history
of value added tax; introduction of VAT system in Bangladesh; success
of Bangladesh VAT system in revenue collection; function of VAT
system; variants of value added tax; theory of value added taxes; VAT
PART B1 chain; VAT imposition; tax rate; VAT exemption; HS code & service
Introduction code in VAT; time of payment of VAT; input credit system; self-
to value added assessment procedure; VAT accounting and auditing; return
tax (VAT) submission; deviation of VAT system in Bangladesh; introduction of
VAT and SD Act 2012 and VAT and SD Rules 2016; difference between
the VAT Act 1991 and VAT and SD Act 2012; advantage of new VAT
and SD Act 2012; etc., and (b) Registration and Enlistment: VAT
registration; registration threshold; enlistment threshold; type of
registration (Central VAT Registration vs. Unit Registration); persons
to be registered/enlisted; mandatory registration; use of Business
Identification Number (BIN); etc.

This part covers (a) Imposition of VAT, VAT Collection System and
PART B2 Input Output Co-efficient: Imposition of VAT in different stages;
output rate; persons liable to pay VAT; zero rated goods/services;

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 MODULE B Indirect Taxes

VAT assessment, supply VAT; manner of VAT collection; VAT on import; Advance Tax
filing and record (AT); calculation of VAT, SD, RD, AT And AIT at import stage; net VAT
keeping calculation; the input output co-efficient; importance of input output
co-efficient; etc., (b) VAT Return: Type of return; submission/filing of
return; output-supply; input-purchase; increasing adjustment;
decreasing adjustment; etc., and (c) Record Keeping and Accounting
in VAT: Importance of record keeping in VAT; obligation and record
keeping; types of records; Mushak forms and its practical application;
VAT accounting and payment procedures; dual accounting system in
VAT law; etc.

This part covers Basics of Customs Tax: Objectives; prohibited goods;

PART B3 regulatory duty; countervailing duty; antidumping duty; safeguard
Customs tax duty; valuation for import duty; assessment; duty drawback; bonded
and others warehouse; World Customs Organization (WCO); World Trade
Organization (WTO); excise duty; etc.

End of Module B

MODULE C Public Financial Management (PFM)

This part covers definition and objectives of PFM; attributes of a good

financial management system; key processes of public financial
management system (macroeconomic forecasting, budget
preparation, budget execution, accounting and fiscal reporting, cash
PART C1
management, debt management, revenue administration, auditing);
Basic concepts
broad understanding of the key processes; issues associated with
of PFM
PFM; constitutional mandate and laws on PFM; types of government
entities; responsible authorities engaged in PFM; responsibilities of
the authorities engaged in PFM; committees of parliament members
on PFM; background to the PFM reform strategy 2016-21; etc.

This part covers history of development planning in Bangladesh;

PART C2 perspective plan of Bangladesh (2021-2041): making Vision 2021 a
Economic reality; priorities of Vision 2021; eighth five-year plan (8FYP) targets;
planning in SDG and eighth five-year plan (8FYP); annual development program;
Bangladesh Vision 2041; etc.

This part covers budget and its dimensions; budget classification: why
PART C3 it is important; 13-digit classification structure and its limitation; new
Mobilization classification structure; benefits of new classification; Medium Term
of financial Budgetary Framework (MTBF); MTBF approach; regulatory
resources framework of budget; public money and budget management act,
2009; Foreign Aid Budget and Accounts (FABA); etc.

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 MODULE C Public Financial Management (PFM)

This part covers legal framework of public procurement- salient

features of the PPA 2006 and the PPR 2008; Budgeting and Accounting
PART C4
Classification System (BACS); Integrated Budget and Accounting
Management
System (iBAS++); Supplementary Rules (SR); management of public
and execution
procurement-key risks in public procurement and mitigation;
of public
procurement management under Public Private Partnership (PPP);
expenditure
Public Procurement Act 2006; and Public Procurement Rules 2008;
etc.

This part covers institutional models of Supreme Audit Institution;

Comptroller and Auditor General (C & AG) of Bangladesh; authorities
PART C5 and responsibilities of C & AG; audits of SAI; International Public
Supreme Audit Sector Accounting Standards (IPSAS); International Organization of
institution (SAI) Supreme Audit Institutions (INTOSAI); International Standards of
of Bangladesh Supreme Audit Institutions (ISSAIS); Asian Association of Supreme
Audit Institutions (ASOSAI); Public Expenditure and Financial
Accountability (PEFA); public access to the information of PFM; etc.

End of Module C

RECOMMENDED BOOKS AND LEARNING MATERIALS_______________________________________________

Primary Textbook
ICMAB Learning Manual for Fundamentals of Tax, VAT and Public Financial
Management.

Recommended Textbooks
1. Shil, N. C., Masud, M. Z., & Alam, M. F. (2024). Bangladesh Income Tax: Theory
and Practice, Seventeenth Edition, Shams Publications.
2. Rauf, A. (2020). Shahoj Vasai Notun VAT Ain, Liton Publication.
3. Islam, A. S. M. S. (2021). Basic Issues of Private Investment and Business:
Bangladesh Perspective, Second Edition.

Reference Books/Other Learning Materials

1. Adhikary, L. B. (2022). Income Tax Manual (Parts 1, 2), Supreme Prakashani.
2. The Income Tax Act, 2023.
3. Value Added Tax and SD Act 2012 (Bangladesh).
4. Value Added Tax and SD Rules 2016 (Bangladesh).
5. Public Financial Management (PFM) Reform Strategy 2016-2021 (2016).
Ministry of Finance: Government of the People’s Republic of Bangladesh.
6. Cangiano, M., Curristine, T. R., & Lazare, M. (2013). Public Financial
Management and its Emerging Architecture, First Edition, Washington, DC:
International Monetary Fund.
7. Public Financial Management Systems – Bangladesh: Key Elements from a
Financial Management Perspective (2018). Asian Development Bank
8. Frank, H. A. (2006). Public Financial Management (Public Administration and
Public Policy), First Edition, Routledge.

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