Home » ICAN Syllabus » The Skills level of the ICAN (Institute of Chartered Accountants of Nigeria) is the second level in the ICAN-ACA professional examination. The Skills level examinations are taken by individuals who aspire to become chartered accountants or professionals in the field of accounting and finance.
These exams are designed for students who have completed the foundational knowledge covered at the foundation level and are ready to delve deeper into public sector accounting and other specialized areas of accounting.
The chartered accountancy qualification – the ACA, of the Institute of Chartered Accountants of Nigeria (ICAN), with its integrated components, is one of the most advanced professional accountancy qualifications globally. The requirements for ICAN – ACA qualification are set out in this syllabus in the form of learning outcomes and competencies
Candidates with a BSc, M.Sc, and PhD in Accounting are exempted from the Skills level of the ICAN professional examination, while others having fewer qualifications might be exempted from one or more papers at this level. (Please see the academic and professional qualification exemption below).
The Skills level of accounting has 6 courses.
The Skills level builds on the foundation knowledge and takes students to a higher-level knowledge, developing further, their skills and competencies. The emphasis is on application of skills to business situations. There are six courses in this level including.
Taxation is always expected to be an easy examination, but most often, aspiring Chartered Accountants and other non-accounting professionals panic during examinations. To ace this course, studying for it judiciously can only be achieved when it is done using the updated ICAN Taxation syllabus.
This taxation course will equip you with an understanding of the principles of taxation, tax legislation, and the structure of the tax system in Nigeria. If you aspire to make an excellent mark in this examination, then you need to study this syllabus to know what you are expected to learn.
Professional Accountants need to understand taxation principles and laws to support compliance and effective professional advice. The emphasis here is on basic knowledge and application of tax legislation relating to individuals and corporate entities in simple situations. Candidates are expected to be able to explain the tax consequences of the activities of individuals and corporate entities.
On successful completion of this paper, candidates should be able to:
| Syllabus for ICAN Foundation Level | |||
| Level | Foundation | ||
| Course Name | B6 – Taxation | ||
| Abbreviation | Tax | ||
| A. Introduction to taxation and tax administration | |||
| Topic | Breakdown | Marking Guide | |
| 1 | Introduction to taxation | (a) State the objectives of taxation. (b) Explain the types of taxes and tax system. (c) Explain the basic concepts in taxation: (i) Tax base, tax yield, tax rate, tax incidence; and (ii) Tax burden, tax impact, tax shift, tax effect. (d) Differentiate between tax and other levies. (e) Explain the principles/canons of taxation. (f) Explain the following in relation to taxation in Nigeria: (i) Enabling Acts; and (ii) Sources of the tax laws. | 20% |
| 2 | Tax administration in Nigeria | List and explain the roles, functions, compositions and powers of: (a) Joint Tax Board; (b) State Board of Internal Revenue; (c) Federal Inland Revenue Service and its management Board; (d) Joint State Revenue Committee; (e) Local Government Revenue Committee; (f) Tax Appeal Tribunal; and (g) Tax amnesty, including Voluntary Assets and Income Declaration Scheme (VAIDS) (h) Explain the role and relationship between Fiscal Policy, Tax legislation and Administration | |
| 3 | Revised National Tax Policy (NTP), 2017 | (a) State the objectives of this policy. (b) Explain the policy guidelines as they relate to: (i) Guiding principles of Nigerian Tax System; and (ii) Taxation as a tool for economic management and development: Wealth creation and employment; Taxation and diversification; Focus on indirect taxation; Convergence of tax rates; Special arrangements and other incentives; Creating a competitive edge; and International and regional treaties (c) Explain the responsibilities of the following stakeholders: (i) The government; (ii) The taxpayer; (iii) Revenue agencies; (iv) Professional bodies, tax practitioners, consultants and agents; and (v) Media and advocacy groups. (d) Explain the administration of the mandates of the three-tiers of government in accordance with the following: (i) Registration of taxable persons; (ii) Tax compliance; (iii) Efficiency of administration; (iv) Technology and tax intelligence; and (v) Dispute resolution. (e) Explain the implementation measures by: (i) The President and Governors; (ii) Legislature; (iii) Ministry of Finance; (iv) Ministries, departments and agencies (MDAs); (v) Tax authorities; and (vi) Independent National Electoral Commission (INEC). | |
| 4 | Basic ethical issues in taxation | (a) Identify and explain the following five fundamental principles of ethics as specified by the International Ethics Standards Board for Accountants (IESBA): (i) Integrity; (ii) Objectivity; (iii) Professional competence and due care; (iv) Confidentiality; and (v) Professional behaviour. (b) State the conditions when information on taxpayers may be disclosed. (c) Explain what a tax practitioner should do when there is a conflict of interest. | |
| 5 | Assessments, objections, appeals and remittances | (a) Explain the following types of assessments: (i) Self assessment; (ii) Additional assessment; (iii) Best of judgment (BOJ)/administrative assessment; and (iv) Back duty assessment. (b) Identify and explain the procedures for tax objections and appeals, covering the following: (i) Time limit for objection and appeal; (ii) Contents of a notice of objection and appeal; (iii) Amendment of assessment and refusal to amend; and (iv) Appeal procedures and processes: Tax Appeal Tribunal, Federal High Court, Court of Appeal and Supreme Court. (c) Explain the basis for registration and filing of returns with the revenue authorities covering the following: (i) Time within which to register; (ii) Registration requirements and process; (iii) Contents of a tax return; (iv) Due date for filing of tax returns; and (v) Time within which to pay tax assessed. (d) Explain the following in respect of a tax clearance certificate (TCC): (i) Definition and contents; (ii) The conditions for granting a TCC; (iii) The transactions for which a TCC is required; and (iv) T he procedure for processing TCC | |
| B. Transactions Taxes | 15% | ||
| 1 | Withholding tax (WHT) | (a) Explain the nature, objectives and administration of WHT. (b) State the transactions/incomes subject to WHT and applicable rates. (c) State the relevant tax authority for collection of WHT. (d) Explain the procedure for filing WHT return; list its contents and time frame for compliance. (e) State the procedures and provisions relating to WHT refunds and grounds for objection. (f) Explain the procedure for remittance of WHT to tax authorities. (g) State the administrative bottlenecks and other problems of WHT. (h) State the merits and demerits of WHT scheme. | |
| 2 | Value added tax (VAT) | (a) Explain the nature, objectives and administration of VAT. (b) Explain taxable persons and taxable supplies of goods and services. (c) Explain the following in relation to VAT: (i) Input tax; (ii) Output tax; (iii) Exemption; (iv) Zero-rated supplies and services; (v) Reverse VAT; (vi) Basic tax point; (vii) Actual tax point; and (viii) Standard rate. (d) Compute VAT liability, including the treatment of opening and closing inventories. (e) State the obligations for registration, records and accounts keeping, and valid VAT Invoice. (f) Explain the requirements for filing of VAT returns and remittance of VAT liability. (g) Explain the treatment of VAT on imported and exported goods and services. (h) State the offences and penalties associated with VAT. (i) Explain the provision on VAT recovery. | |
| 3 | Stamp duties | (a) State the nature and objectives. (b) List the instruments chargeable. (c) State the relevant tax authority for collection. (d) State the types and forms. (e) Explain the time limit for stamping and implications of non-stamping. (f) Explain the recoverability of outstanding duties. (g) State the rates and the basis of computation. (h) Explain the administration, territorial limits and the methods of stamping. (i) Explain the process of adjudication, the limits and appeals procedure. | |
| 4 | Customs and excise duties | (a) Explain the nature, objectives and administration of customs and excise duties. (b) State the rates and basis of computation. (c) List excisable items. (d) State provisions relating to the furnishing of information by manufacturers and keeping of books. (e) State offences and penalties. | |
| 5 | Luxury tax | (a) Define luxury tax. (b) State the relevant goods and services. (c) State the applicable rate for each of the goods and services. (d) Explain the benefits of taxation of luxury goods. | |
| 6 | Land Use Charge (computation, assessment and dispute resolution) | ||
| C. Personal Income Tax | 30% | ||
| 1 | Taxation of employment income | (a) Explain employment; contract of service and contract for service. (b) Explain the following types of employment: (i) Nigerian employment; and (ii) Foreign employment. (c) Explain employment, vocation and profession. (d) Define an itinerant worker. (e) Explain the following terminologies in employment income: (i) Cash emolument; (ii) Benefits-in-Kind; and (iii) Taxable and tax-exempt incomes. (f) State and explain the conditions for taxation of income from employment. (g) List and explain allowable and non-allowable deductions. (h) E xplain the following: (i) Registration for Pay-As-You-Earn (PAYE); (ii) Basis of assessment; (iii) Computation of consolidated relief allowance (iv) Computation of personal income tax; (v) Filing of returns: employees and employers; and (vi) Offences and penalties. | |
| 2 | Taxation of trusts, settlements and estates | (a) Define trusts, settlements and estates. (b) Explain allowable and non-allowable expenses. (c) Compute income from trusts, settlements and estates. (d) Compute taxable income. (e) Compute tax liability in the hands of beneficiaries and trustees. (f) Identify relevant tax authority. (g) State and explain offences and penalties. | |
| 3 | Taxation of investment income | (a) Define investment income. (b) Compute rental income chargeable to tax on property, including contractor-financed projects. (c) Explain the tax implications of dividends and interests. (d) Explain the bases of assessments and payment of taxes on investment incomes. | |
| D. Business income tax | 35% | ||
| 1 | Taxation of business income | (a) Sole proprietorship (i) Explain the meaning of a trade or profession and badges of trade. (ii) Computation of assessable profit of a trade or profession Identify taxable and non-taxable income. Identify and explain allowable and non-allowable expenses. (iii) Basis period for assessment Define basis period and state types. State the rules for commencement, change of accounting date and cessation. (iv) Capital allowance computation Define qualifying capital expenditure and capital allowance. Explain the types of capital allowances and qualifying capital expenditure. State the conditions for granting capital allowance. Identify capital allowance rates and restrictions. Compute balancing adjustments on disposal of qualifying capital expenditure. (v) Loss relief Identify and explain types of loss reliefs and their treatments. Explain the treatments of losses under commencement and cessation of business. (b) Partnerships (i) Define partnership. (ii) E xplain allowable and non-allowable expenses. (iii) Compute the income of a partnership business. (iv) Identify the taxable income of partners. (v) State the tax treatment under admission and resignation of a partner. (c) Limited liability companies (i) Identify persons chargeable to companies’ income tax. (ii) Computation of assessable profit Explain taxable and non-taxable income. Explain allowable and non-allowable expenses. (iii) Basis period for assessment Define and state types. Explain the rules for commencement , change of accounting date and cessation of business. (iv) Capital allowance computation Explain types of capital allowance. Define and explain types of qualifying capital expenditure. State the conditions for granting capital allowance. Identify and apply the capital allowance rates and restrictions. Compute balancing adjustments on disposal of qualifying capital expenditure. (v) Loss relief Explain Loss relief principles. Explain the treatment of losses under commencement, change of accounting date and cessation of business. (vi) Compute companies income tax liability, taking the following into consideration: Total profit; Minimum tax; Dividend distribution; and Revenue/Turnover. (vii) Compute and explain the bases for computing deferred tax. | |
| 2 | Taxation of specialised businesses | (a) Define specialised businesses. (b) State the relevant tax provisions for real estate and agriculture. (c) State the tax provisions and compute tax liability on income from transportation, telecommunication, banks and insurance businesses. (d) Explain the circumstances when the Revenue can assess a company based on its turnover. (e) Identify and explain criteria that must be met to be eligible for small company relief. (f) State the basis for taxation of enterprises in free trade zones. (g) Explain the provisions of the Nigerian Information Technology Development Agency Act (NITDA) 2007 (as amended) as it relates to taxation. (h) Taxation on income from e-commerce. | |
| 3 | Tertiary education tax | (a) Define tertiary education tax. (b) State the objectives and basis of computation of tertiary education tax as provided in the enabling Act. (c) Explain the imposition, assessment, and collection of the tax. (d) State the management and administration of the tertiary education tax fund (TETFund). (e) State the composition and functions of the board of trustees. (f) Explain the allocation and distribution of the tax. (g) State the offences and penalties for non-compliance. | |
In the dynamic world of accounting, studying Public Sector Accounting and Finance (PSAF) with the updated ICAN syllabus is a sure bet to broadening your expertise and acing the ICAN-ACA professional examinations.
This PSAF syllabus extensively covers topics on planning and budgeting, audit, public finance, and regulatory frameworks of Public Sector Accounting. These topics provide a deep understanding of the principles, concepts, and laws associated with Public Sector Accounting and Finance.
By studying the updated ICAN syllabus on Public Sector Accounting and Finance, you pave your way to success in the ICAN professional exams and establish yourself as an expert in Public Sector Accounting.
Aim
Candidates are expected to:
Main competencies
On successful completion of this paper, candidates should be able to:
| Syllabus for ICAN Skills Level | |||
| Level | Skills | ||
| Course name | B5- Public Sector Accounting and Finance | ||
| Abbreviation | PSAE | ||
| A. Regulatory and conceptual frameworks of public sector accounting | |||
| Topic | Breakdown | Marking guide | |
| 1 | The constitutional and regulatory frameworks of public sector accounting | (a) Discuss the importance of the constitutional, legislative and regulatory contexts of Public Sector Accounting with specific emphasis on: (i) The constitutional provisions on revenue, revenue allocation and public expenditure (federal, states and local governments); (ii) The provisions of the Finance (Control and Management) Act of 1958 (as amended); and (iii) Financial regulations for Federal and State Governments and financial memoranda for Local Government Councils. (b) Discuss the provisions of: (i) Fiscal Responsibility Act, 2010 in relation to: The medium term expenditure framework (MTEF); The annual budget (computational question may be examined); Budget execution and achievement of targets (computational question may be examined); Savings and assets management; Transparency and accountability; and Enforcement. (ii) Public Procurement Act, 2007 in relation to: Fundamental principles of procurement; Organisation of procurement; Procurement methods (goods and services); Special and restricted methods of procurement; Procurement of consultant (services); Disposal of public property; and Offences. (iii) International Public Sector Accounting Standards IPSAS 11 – Construction Contracts (IAS 11). Computational question may be examined; and (iv) IPSAS 12- Inventories (IAS 2). Computational question may be examined. c) Assess ethical issues in public sector accounting in respect of functions and powers (offences and penalties) of the following bodies: (i) Economic and Financial Crimes Commission (EFCC); (ii) Independent Corrupt Practices and Other Related Offences Commission (ICPC); (iii) Code of Conduct Bureau (CCB); (iv) Code of Conduct Tribunal (CCT); and (v) Public Accounts Committee (PAC). | 20% |
| 2 | Public sector accounting concepts and pronouncements | a) Discuss: (i) Accounting concepts, bases and principles relevant to public sector accounting; (ii) Concept of funds, its relationship to the entity concept and its implications for income measurement and valuation; (iii) Professional pronouncements on public sector accounting by the United Nations, the International Committee on Public Sector Financial Management and International Federation of Accountants (IFAC) through IPSAS Board; and (iv) Standardisation of Federal, State and Local Governments reporting formats in Nigeria. b) Discuss Pension Reform Act, 2014, in respect of: (i) Objectives; (ii) Rates of contribution to scheme; (iii) Exemption from the scheme; (iv) Retirement benefits; (v) Retirement savings account; (vi) Transitional provisions for the public sector; (vii) Pension fund administrators (PFA)and pension fund custodians (PFC); (viii) Investment of pension fund; and (ix) Offences, penalties and enforcement powers. (c) Discuss IPSAS 25 – Employee benefits (amended by IPSAS 39). (d) Assess emerging issues in Nigerian public sector in relation to: (i) Government Integrated Financial Management Information System (GIFMIS); (ii) Integrated Payroll and Personnel Information System (IPPIS); (iii) Treasury Single Account (TSA); and (iv) Accounting Transaction Recording and Reporting System (ATRRS). | |
| B. Planning and budgeting | 20% | ||
| 1 | Discuss the: (a) Importance of planning and budgeting in the public sector; and (b) Objectives and the use of annual budget in the public sector. | ||
| 2 | Evaluate types of budget: (a) Line–item budgeting system; (b) Traditional/incremental budgeting system; (c) Planning programming budgeting system (PPBS); (d) Programme performance budgeting system (PPBS); and (e) Zero–base budgeting system (ZBB). | ||
| 3 | Distinguish among rolling, development and perspective plans. | ||
| 4 | Discuss the steps in the budgeting process and budgetary control. | ||
| 5 | Evaluate and discuss IPSAS 24 – Presentation of Budget Information in Financial Statements. Computational question may be examined. | ||
| C. Report and audit | 30% | ||
| 1 | Accounting and financial reporting | (a) Present and evaluate the public sector accounting processes in relation to: (i) Treasury cash book and transcripts; (ii) Cash management and borrowing guidelines; (iii) Types of vouchers and their uses; (iv) Bank reconciliation statements; (v) Subsidiary accounts – deposits, advances and imprest; (vi) Journal entries for loss of public funds; (vii) Vote book and expenditure control; and (viii) Revenue control procedures. (b) Discuss the roles of the following bodies: (i) Federation Accounts Allocation Committee (FAAC); and (ii) Revenue Mobilization, Allocation and Fiscal Commission (RMAFC). (c) Prepare and discuss the following: (i) Federation Accounts; (ii) Federal public sector independent revenue; and (iii) Charges to the Consolidated Revenue Fund (CRF). (d) Prepare statutory financial statements for federal, state and local government treasury in accordance with cash basis IPSAS in respect of the following: (i) Cash Flow Statement; (ii) Statement of Consolidated Revenue Fund; (iii) Statement of Capital Development Fund; (iv) Notes to the accounts; (v) Performance reports; (vi) Statistical reports; and (vii) Accounting policies. (e) Prepare statutory financial statements for federal, state and local government treasury in accordance with Accrual Basis IPSAS in respect of the following: (i) Cash Flow Statement; (ii) Statement of financial performance (Consolidated Revenue Fund); (iii) Statement of financial position (statement of assets and liabilities); (iv) Statements of changes in net assets/equity; (v) Comparison of budget and actual amounts; and (vi) Notes to the accounts. (f) Discuss IPSAS 33 – First-time Adoption of Accrual Basis IPSAS. (g) Interpret public sector financial statements using relevant and appropriate techniques such as: (i) Ratio analysis; (ii) Variance analysis; (iii) Budget performance indices; and (iv) Revenue and expenditure profiles | |
| 2 | Accounting for public sector organisations and government business entities | (a) Discuss the general nature of and differences among public sector organisations: (i) Organisations without the features of a private company e.g. Independent National Electoral Commission (INEC), Niger-Delta Development Commission (NDDC), etc; and (ii) Government business entities (i.e. hybrid organisations that have features of private companies and public organisations e.g. Nigerian Ports Authority (NPA), Central Bank of Nigeria (CBN), Nigerian Security Printing & Minting Company (NSPMC) Ltd, Securities and Exchange Commission (SEC), etc. (b) Discuss financial provisions of enabling laws for relevant utilities, authorities, parastatals, boards, corporations, agencies and tertiary educational institutions. (c) Prepare the financial statements of relevant utilities, authorities, parastatals, boards, corporations, agencies and tertiary educational institutions in accordance with Accrual Basis IPSAS, considering the following: (i) Statement of financial position; (ii) Statement of financial performance; (iii) Statements of changes in net assets/equity; (iv) Cash flow statement; and (v) Notes to the accounts. (d) Discuss the International Public Sector Accounting Standards (IPSAS) on cash basis in relation to its structure, objectives, responsibility, characteristics, and components. (e) Discuss the following International Public Sector Accounting Standards (IPSAS) on accrual basis in relation to the definitions, applications, recognition, measurement and disclosures; | |
| IPSAS – Standards IAS/IFRS IPSAS 1- Presentation of Financial Statements – IAS 1 IPSAS 2 – Cash Flow Statements – IAS 7 IPSAS 3- Accounting Policies, Changes in Accounting Estimates and Errors -IAS 8 IPSAS 4- The Effects of Changes in Foreign Exchange Rates – IAS 21 IPSAS 5- Borrowing Costs – IAS 23 IPSAS 6- Consolidated and Separate Financial Statements (Replaced with IPSAS 34) -IAS 27 IPSAS 7- Investments in Associates (Replaced with IPSAS 36) – IAS 28 IPSAS 8- Interests in Joint Ventures (Replaced with IPSAS 36) -IAS 31 IPSAS 9- Revenue from Exchange Transactions – IFRS 15 IPSAS 10- Financial Reporting in Hyperinflationary Economies- IAS 29 IPSAS 13- Leases – IFRS 16 IPSAS 14- Events After the Reporting Date -IAS 10 IPSAS 15- Financial Instruments: Disclosure and Presentation (Superseded by IPSAS 28 and IPSAS 30) IPSAS 16- Investment Property -IAS 40 IPSAS 17- Property, Plant and Equipment -IAS 16 IPSAS 18- Segment Reporting -IAS 14 IPSAS 19- Provisions, Contingent Liabilities and Contingent Assets -IAS 37 IPSAS 20- Related Party Disclosures -IAS 24 IPSAS 21- Impairment of Non-Cash-Generating Assets – N/A IPSAS 22- Disclosure of Financial Information About the General Government Sector -N/A IPSAS 23- Revenue from Non-Exchange Transactions (Taxes and Transfers) -N/A IPSAS 26- Impairment of Cash-Generating Assets- IAS 36 IPSAS 27- Agriculture -IAS 41 IPSAS 28- Financial Instruments: Presentation -IAS 32 IPSAS 29- Financial Instruments: Recognition and Measurement -IFRS 9 IPSAS 30- Financial Instruments: Disclosures -IFRS 7 IPSAS 31-Intangible Assets -IAS 38 IPSAS 32- Service Concession Arrangements: Grantor -IFRIC 12 IPSAS 34- Separate Financial Statements -IAS 27 IPSAS 35- Consolidated Financial Statements -IFRS 10 IPSAS 36- Investments in Associates and Joint Ventures -IAS 28 IPSAS 37- Joint Arrangements -IFRS 11 IPSAS 38- Disclosure of Interests in Other Entities -IFRS 12 IPSAS 40-Public Sector Combinations -IFRS 3 | |||
| Note: Applicable new standards and laws may be examined six months after the date of issue. | |||
| 3 | Public Sector Audit | Discuss the: (a) Legal requirements for audit in the public sector and the roles of the Accountant-General and Auditor-General; (b) Processes of appointing auditors in the public sector; (c) Basic steps in the process of auditing public sector financial statements; (d) Concept of public accountability in the public sector; (e) Financial guidelines for the operation of the public sector; (f) Financial responsibilities of public sector officers; (g) Nature and types of financial control in the public sector; (h) Financial control institutions within the public sector (including their functions and procedures), in respect of: (i) Ministry of Finance; (ii) Office of the Auditor-General for the Federation; (iii) Office of the Accountant-General of the Federation; (iv) Budget office; (v) Expenditure control unit; and (vi) Fund section. (i) Roles of national and state assemblies, and local government councils in financial management and control; (j) Financial management and virement procedures; (k) Application of International Standards of Supreme Audit Institutions (ISSAI), standards for assurance and audit and their relationship with Nigerian/International Standards on Auditing (NSA’s/ISA’s); and (l) Value-for-money audit. | |
| D. Public finance | 30% | ||
| (a) Evaluate the roles of the public sector in relation to the: (i) Performance of the Nigerian economy; and (ii) Objectives of fiscal responsibilities. (b) Discuss the main sources of revenue and capital finance. (c) Discuss the roles of revenue collection agencies, such as: (i) Nigerian National Petroleum Corporation (NNPC); (ii) Federal Inland Revenue Service (FIRS); (iii) State Internal Revenue Service (SIRS); (iv) Department of Petroleum Resources (DPR); (v) Nigerian Customs Service (NCS); and (vi) Local Government Revenue Authorities. (d) Assess revenue collection and monitoring procedures. (e) Justify the importance of grants as a source of revenue to federal, state and local governments. (f) Assess and evaluate the expenditure and revenue frameworks of public finance in relation to: (i) Public expenditure: Efficient provision of public goods: Deriving the efficiency contribution; and Problems in achieving efficiency. (ii) Public goods: Justify government intervention in the provision of public goods; and Evaluate how government spending creates positive externalities in provision of public goods. (g) Discuss the national privatisation policy with respect to: i. Public versus private provision; ii. Public versus private production; iii. Public goods and public choice; and iv. Bureau of Public Enterprises (BPE). (h) Assess borrowing policy and public debts in the context of: (i) Funded and unfunded debts; (ii) Debt burden; (iii) Deficit financing (to tax or to borrow?); and (iv) External loans: multilateral, Paris Club, London Club, promissory notes and others. (i) Evaluate debt management strategies in relation to: (i) Loans pooling and consolidation; (ii) Loan re-scheduling; (iii) Debt-equity swap; and (iv) Debt forgiveness. (j) Evaluate and discuss principles and practice of federalism (fiscal federalism, fiscal capacity and needs in multi-level public sector structures). (k) Evaluate inter-public sectoral fiscal relations and Nigeria’s experience with revenue allocation. (l) Appraise projects in the public sector, using: (i) Cost-benefit analysis; (ii) Cost-outcome analysis; (iii) Cost-effectiveness analysis; and (iv) Net present value and internal rate of return. (m) Discuss the nature, causes and types of externalities. (n) Evaluate emerging issues in Nigerian Public Finance. | |||
To be successful in the ICAN Performance Management examination, you are expected to be capable of analysing financial and non-financial data and information to support management decisions.
To achieve this, you need to be well-schooled on the application of strategic performance measurement techniques in evaluating and improving organizational performance and studying with the ICAN syllabus ensures that.
Studying with the ICAN syllabus gives you the most relevant knowledge and skills needed for excellent organisational management. With it, you are guaranteed of an excellent performance in the forthcoming ICAN-ACA professional examinations.
Aim
Performance management develops and deepens candidates’ capability to provide information and decision-support to management in operational and strategic contexts with a focus on linking costing, management accounting and quantitative methods to critical success factors and operational strategic objectives whether financial, operational or with a social purpose. Candidates are expected to be capable of analysing financial and non-financial data and information to support management decisions.
On successful completion of this paper, candidates should be able to:
| Syllabus for ICAN Skills Level | |||
| Level | Skills | ||
| Course name | B4-Performance Management | ||
| Abbreviation | PM | ||
| A. Cost planning and control | |||
| Topic | Breakdown | Marking guide | |
| 1 | Overview of costs for planning and control | (a) Discuss and evaluate the sources of performance management information. (b) Analyse fixed and variable cost elements from total cost data using high/low method and regression analysis. (c) Differentiate between marginal costing and absorption costing. (d) Analyse overhead costs using activity based costing. | 20% |
| 2 | Cost planning and control for competitive advantage | (a) Discuss and apply the principles of: (i) Target costing; (ii) Life cycle costing; (iii) Theory of constraints (TOC); (v) Throughput accounting; (vi) Back flush accounting; (vii) Environmental accounting; and (viii) Kaizen costing. (b) Learning and experience curve theory (i) Discuss and apply the learning and experience curve theory to pricing, budgeting and other relevant problems. (ii) Calculate and apply learning rate to cost estimation. (c) Cost of quality i) Explain quality costs. ii) Analyse quality costs into costs of conformance and costs of nonconformance. iii) Discuss the significance of quality costs for organisations. | |
| 3 | Ethical issues in performance management | (a) Discuss ethical issues in performance management. (b) Discuss the professional accountants’ code of ethics as it relates to performance management. | |
| B. Planning and control | 20% | ||
| 1 | Budgetary system, planning and control | (a) Discuss and apply forecasting techniques to planning and control. (b) Discuss budgetary system in an organization as an aid to performance management. (c) Evaluate the information used in budgetary system. (d) Discuss the behavioural aspects of budgeting. (e) Discuss the usefulness and problems associated with different types of budget. (f) Explain beyond budgeting models. | |
| 2 | Variance Analysis | (a) Explain the uses of standard cost and types of standard. (b) Discuss the methods used to derive standard cost. (c) Explain and analyse the principle of controllability in the performance management system. (d) Calculate and apply the following variances: (i) Material usage and price variances; (ii) Material mix and yield variances; (iii) Labour rate, efficiency and idle time variances; (iv) Variable overhead expenditure and efficiency variances; (v) Fixed overhead budget, volume, capacity and productivity variances; (vi) Sales volume variance; (vii) Sales mix and quantity variances; (viii) Sales market size and market share variances; and (ix) Planning and operational variances. (e) Identify and explain causes of various variances and their inter-relationship. (f) Analyse and reconcile variances using absorption and marginal costing techniques. | |
| C. Performance measurement and control | 20% | ||
| 1 | Performance analysis | (a) Select and calculate suitable financial performance measures for a business from a given data and information. (b) Evaluate the results of calculated financial performance measures based on business objectives and advise management on appropriate actions. (c) Select and calculate suitable non-financial performance measures for a business from a given data and information. (d) Evaluate the results of calculated non-financial performance measures based on business objectives and advise management on appropriate actions. (e) Explain the causes and problems created by short-termism and financial manipulation of results and suggest methods to encourage a long term view. (f) Discuss sustainability consideration in performance measurement of a business. (g) Select and explain stakeholders based measures of performance that may be used to evaluate social and environmental performance of a business. (h) Explain and interpret the Balanced Scorecard and Fitzgerald and Moon Building Block model. | |
| 2 | Performance analysis in not-for-profit organisations | (a) Discuss the problems of having non-quantifiable objectives in performance management. (b) Explain how performance may be measured in not-for-profit organisations. (c) Discuss the problems of having multiple objectives. (d) Demonstrate the Value for Money (VFM) as a public sector objective. | |
| 3 | Divisional performance and transfer pricing | (a) Discuss the various methods of setting transfer prices and evaluate the suitability of each method. (b) Determine the optimal transfer price, using appropriate models. (c) Explain the benefits and limitations of transfer pricing methods. (d) Demonstrate and explain the impact of taxation and repatriation of funds on international transfer pricing. (e) Select and explain suitable divisional performance measures for a given business using return on investment, residual income and economic value added approaches. Evaluate the results and advise management. | |
| D. Decision making | 30% | ||
| 1 | Advanced decision-making and decision-support | (a) Select and calculate suitable relevant cost based on given data and information. Evaluate the results and advise management. (b) Select, calculate and present cost-volume-profit analyses based on given data and information including single and multiple products, using both numerical and graphical techniques. Advise management based on the results. (c) Apply relevant cost concept to short term management decisions including make or buy, out-sourcing, shut down, one-off contracts, adding a new product line, sell or process further, product and segment profitability analysis, etc. (d) Apply key limiting factors in a given business scenario to: (i) Single constraint situation, including make or buy; and (ii) Multiple constraint situations involving linear programming using simultaneous equations, graphical techniques and simplex method. (The simplex method is limited to formulation of initial tableau and interpretation of final tableau). NB. Computation and interpretation of shadow prices are also required. (e) Explain different pricing strategies, including: (i) Cost-plus; (ii) Skimming; (iii) Market penetration; (iv) Complementary product; (v) Product-line; (vi) Volume discounting; and (vii) Market discrimination. (f) Calculate and present numerically and graphically the optimum selling price for a product or service using given data and information by applying relevant cost and economic models and advise management. (g) Evaluate how management can deal with uncertainty in decision-making including the use of simulation, decision-trees, replacement theory, expected values, sensitivity analysis and value of perfect and imperfect information. | |
| 2 | Working capital management | (a) Discuss the nature, elements and importance of working capital. (b) Calculate and explain the cash operating cycle. (c) Evaluate and discuss the use of relevant techniques in managing working capital in relation to: (i) Inventory, including economic order quantity model and Just-in- Time techniques; (ii) Account receivables including cash discounts, factoring and invoice discounting; (iii) Account payables; and (iv) Cash including Baumol and Miller-Orr Models. | |
| 3 | Capital budgeting decisions | (a) Discuss the characteristics of capital budgeting decisions. (b) Calculate and discuss various investment appraisal techniques such as: (i) Traditional techniques: Accounting Rate of Return; and Pay-back period. (ii) Discounted cash flow technique: Net Present Value; and Internal Rate of Return. NB: These may include basic profitability index and inflation but excluding tax consideration and capital rationing. (c) Evaluate asset replacement decision for mutually exclusive projects with unequal lives. | |
| E. Strategic performance measurement | 5% | ||
| 1 | Analyse and evaluate business objectives and strategies using techniques such as: (a) C-analysis; (b) Five forces analysis; (c) The Boston Consulting Group Model; (d) Value chain analysis; (e) Ansoff’s matrix; (f) Benchmarking; and (g) SWOT analysis. | ||
| 2 | Analyse and evaluate suitable performance measures for: (a) Profitability (GP, ROCE, ROI, EPS, EBITDA, etc.); (b) Liquidity; and (c) Solvency. | ||
| F. Performance and management system | 5% | ||
| 1 | Evaluate and advise management on suitable information technology and strategic performance management system, covering: (a) Sources of information; (b) Information technology tools for performance management at various levels (strategic, tactical and operational); and (c) Use of internet technologies for performance management and key performance indicators. | ||
| 2 | Evaluate and advise management on suitable approaches that may be used to manage people, issues and change when implementing performance management systems. | ||
| 3 | Discuss the accounting information requirements and analyse the different types of information systems used for strategic planning, management control and operational control, and decision-making. | ||
| 4 | Discuss roles of accountants in: (a) Project management; (b) Project planning; and (c) Project control methods and standards. | ||
By studying the Corporate Strategic Management & Ethics course (CSME) using the ICAN syllabus, you don’t just aim to pass, you strive to excel with the skills and knowledge gained from this course.
The CSME course offers invaluable insights into corporate strategic management, effective risk management, sound corporate governance, and good ethics which support professional practice as an accountant.
This ICAN syllabus on CSME is aligned with the latest industry trends, practices, laws, and regulatory practices on Corporate Strategic Management & Ethics making it easy for you to study exactly what you need to excel in your forthcoming ICAN exams and corporate governance.
This syllabus element takes knowledge from the first level to contemporary professional and business contexts in which excellence in corporate strategic management, effective risk management, sound corporate governance and good ethics support professional practice and business operations in private and public-sector entities.
Candidates will be equipped with knowledge and skills that will position them to effectively achieve objectives, meet expectations and remain focused on long-term sustainable success as professional accountants. Candidates are expected to be capable of analysing simple scenarios in terms of global best practices and compliance with laws and regulations in the context of the knowledge and skills they have cumulatively acquired and developed.
On successful completion of this paper, candidates should be able to:
| Syllabus for ICAN Skills Level | |||
| Level | Skills | ||
| Course name | B3- Corporate Strategic Management & Ethics | ||
| Abbreviation | CSME | ||
| A. Introduction | |||
| Topic | Breakdown | Marking guide | |
| 1 | Introduction | Explain the concept of strategic management and its importance. | 5% |
| Distinguish strategic management from strategic planning, long term planning and corporate planning. | |||
| Distinguish the various levels of strategy: corporate; business; and functional. | |||
| Explain approaches to strategic planning, using: a. Rational model; b. Logical incremental model; and c. Freewheeling opportunism model. | |||
| Discuss the strategic management process: analysis; choice; implementation; and evaluation. | |||
| Explain the concept of corporate governance and discuss: a. Perspectives on corporate governance; b. Historical development of corporate governance: global and national; and c. Structure, principles, functions and mechanisms of corporate governance. | |||
| B. Strategic management | 30% | ||
| 1 | Strategic analysis | (a) Analyse a business and its strategy, given its purpose, mission, vision and objectives from shareholders’ and stakeholders’ perspectives. (b) Analyse the external business environments and examine the opportunities and threats that could arise from events or potential events at the global, national, industry or competitive levels. (c) Analyse the internal environment of a business to identify the strengths and weaknesses and align them with the opportunities and threats in the external environments. (d) Analyse the position of a business in terms of its competitive strategy, plans and current markets, drawing conclusions and giving simple recommendations on the chosen plans. (e) Analyse the position of a business with a chosen strategy in the context of its environment, based on an assessment of its resources, processes, people, information technology (IT), products, core capabilities and competences. Give simple recommendations on the best options. (f) Draft an overall analysis, drawing conclusions with recommendations based on given financial and non-financial data and information from a variety of sources in a given scenario. (g) Determine sustainable competitive advantage and the core competence of a business in a given scenario. Note: Models for analyses include PESTEL, SWOT, SOAR, Porter’s diamond, Porter’s Five Forces, Life Cycle, Value Chain, Benchmarking, Customer Relationship Management and BCG Matrix. | |
| 2 | Strategic choice | (a) Analyse the appropriate choices of strategy that a company may adopt based on a given scenario. This should include competitive advantage, the strategic clock, cost leadership differentiation, lock-in strategies and collaboration. (b) Identify and explain, based on an analysis of choices of strategy, the impact of strategy on commercial, ethical, corporate social responsibility and sustainability objectives. (c) Evaluate the appropriateness of a chosen strategy that supports business objectives, considering constraints, conflicts and other issues based on a given scenario. The following models and tools may be employed in carrying out the evaluation: Models (i) Porter’s generic competitive strategies; (ii) Johnson, Scholes and Whittington (JSW) model of strategic planning; and (iii) Boston Consulting Group (BCG) model in strategic management. Tools (i) Forecasting tools; (ii) Trend analysis; (iii) System modelling; and (iv) Delphi technique. (d) Draw conclusions based on market and product analyses that support a business strategy concerning pricing, positioning, placing and other product decisions in a strategic marketing plan. (e) Determine the appropriate corporate growth strategy in a given scenario: i) Internal development; ii) Diversification; iii) Forward and backward integration; iv) Mergers and acquisitions; v) Product portfolio management; vi) Griener’s Growth Model; and vii) Other growth models. (f) Select a strategic growth direction of a company using Ansoff’s matrix | |
| 3 | Strategic implementation | (a) Discuss and evaluate the alternative functional strategies that are appropriate to deliver a chosen strategy in a given scenario such as production, marketing, finance, IT and human resources. (b) Develop and evaluate alternative business plans and proposals and select the best option to implement a chosen strategy. (c) Evaluate the tools and techniques for strategy implementation applicable to different business units in a given scenario. (d) Evaluate strategic performance using: balanced scorecard, performance pyramid, and Fitzgerald and Moon building blocks. (e) Appraise organisational structures and related activities that may be appropriate to deliver a chosen strategy set out in a given scenario: entrepreneurial, functional, divisional, conglomerate and matrix. (f) Communicate chosen strategies and performance targets to operational and tactical managers through annual budgets, monthly and weekly targets, linking critical success factors (CSFs) to key performance indicators (KPIs) and strategy. (g) Evaluate and explain how information technology and information systems can support the effective implementation of a business strategy including issues of competitive advantage. (h) Evaluate and explain the potential issues of change that may arise from a chosen or given business strategic implementation plan. (i) Evaluate the impact of organisational change on organisation culture including cultural web and Mckinsey’s 7S model. (j) Evaluate the role of leadership in managing the change process, including building and managing effective teams. (k) Evaluate tools, techniques and strategies for managing and leading the change process. | |
| C. Risk management | 20% | ||
| 1 | Explain the meaning of risk, including risks arising internally or externally and relate them to achievement of: (a) Strategic objectives; (b) Operational efficiency and effectiveness; (c) Reliable reporting; and (d) Legal, regulatory and ethical compliance. | ||
| 2 | Identify and assess risks in a given scenario in relation to their impact(s) on objectives. | ||
| 3 | Measure and prioritise risks. | ||
| 4 | Discuss the role of board of directors in risk identification and assessment. | ||
| 5 | Minimise risk using the ALARP (As Low As Reasonably Practicable) principle (objective and subjective risk principles; related and correlated risk factors). | ||
| 6 | Evaluate appropriate responses to risks identified in a given scenario. | ||
| 7 | Explain the roles of a risk manager and risk committees in risk management. | ||
| 8 | Discuss risk auditing and monitoring. | ||
| 9 | Identify and explain appropriate high-level procedures to mitigate risks in a given scenario using TARA (transfer, avoidance, reduction and acceptance) framework. | ||
| 10 | Identify and explain appropriate mechanisms to monitor risk and risk management processes including information and communication systems such as enterprise risk management and ISO 31000 framework on risk management. | ||
| 11 | Evaluate both inherent and residual risks after mitigation in relation to shareholders’ and stakeholders’ risk appetites in a given scenario. | ||
| 12 | Discuss alternative risk management approaches: risk diversification; risk transfer; risk sharing; and risk hedging. | ||
| D. Governance | 20% | ||
| 1 | Identify the issues and bases of decision making, employing theories and philosophies of corporate governance in a given scenario. These include: (a) Agency theory; (b) Transaction cost theory; (c) Stewardship theory; (d) Resources dependency theory; (e) Managerial and class hegemony theory; (f) Psychological and organisational perspective theory; (g) Stakeholders’ theory; and (h) Systems theory. | ||
| 2 | Explain the nature, significance and scope of enterprise governance and threats to effective governance, including: (a) Concept of good governance; (b) Roles of internal and external auditors; (c) Board structure; and (d) Audit committee. | ||
| 3 | Identify and assess roles and responsibilities of an effective board in a given scenario. | ||
| 4 | Discuss ‘non-compliance with laws and regulations’ (NOCLAR) in relation to the responsibilities of the board. | ||
| 5 | Discuss oversight functions of a board and institutional shareholders over management in a given scenario. | ||
| 6 | Assess transparency of an entity through the quality of its disclosures. | ||
| 7 | Discuss the importance and implications of probity as a principle of governance. | ||
| 8 | Assess the extent to which a board in the public sector focuses on the value of sustainable long-term success. | ||
| 9 | Assess the extent to which a board in the public sector focuses on: delivery of an effective and appropriate public service; and acting in the public interest. | ||
| 10 | Discuss global developments in enterprise and corporate governance and elucidate the rules-based and principles-based approaches to corporate governance. Also, evaluate relevant national and international codes of corporate governance. | ||
| 11 | Discuss the concept of corporate social responsibility and specify its background and scope. | ||
| 12 | Discuss the concept of sustainability in business, sustainable asset management (SAM) and full cost analysis (FCA). | ||
| 13 | Explain governance and management issues relating to the use of information technology in organisations | ||
| E. Ethics | 25% | ||
| 1 | Explain the nature, scope and sub-divisions of ethics (descriptive, normative and meta-ethics; professional ethics and business ethics), and the relationship between (a) morality and ethics; and (b) ethics and law. | ||
| 2 | Explain and illustrate, using information in a given scenario, the importance of professional and business ethics in the public and private sectors | ||
| 3 | Discuss and apply ethical theories to decision-making in professional practice: consequential or teleological theories (egoism and utilitarianism); non– consequential or deontological theories (ethics of duties and ethics of rights and justice); ethical relativism; ethical absolutism; ethical subjectivism; and situation ethics. | ||
| 4 | Discuss influences (individual, situational, cultural and religious), stages (Kohlberg’s stages of moral development and the Heinz’s dilemma) and models for ethical decision-making (Tucker’s five question model, American Accounting Association (AAA) model, systems development ethics,). | ||
| 5 | Discuss the alternative models of professional-client relationship; agency, contract, paternalism and fiduciary. | ||
| 6 | Identify and explain in the context of a given scenario, how the issues of moral duties and moral dilemma may arise in professional and business ethics. | ||
| 7 | Discuss the nature of ethical conflicts and ethical threats confronting the accountant in a professional practice, ethical safeguards and tests for resolving the conflicts. | ||
| 8 | Examine the nature, procedure and challenges of whistle-blowing in the accountancy profession. | ||
| 9 | Discuss the alternative ethical stances and culture of an entity (personal versus corporate ethical stance), using: (a) Johnson and Scholes four ethical stances; (b) Gray,Owen and Adam’s seven-level classification of social responsibilities; (c) Johnson and Scholes conception of the cultural web; and (d) Edgar Schein’s three levels of culture. | ||
| 10 | Identify and assess issues of professional ethics and corporate governance as they may arise within the context of ICAN code of professional conduct and IFAC code of ethics for professional accountants in a given scenario. | ||
| 11 | Discuss the ethical dimension of corruption (bribery, money laundering, embezzlement, theft, fraud, extortion, and blackmail). | ||
As an aspiring chartered accountant, studying for your Audit and Assurance examination using the ICAN syllabus doesn’t just bring you closer to passing the ICAN-ACA exams or advancing your profession; it ensures you become an expert auditor.
The ICAN syllabus for Audit and Assurance is carefully designed to help accountants like you understand complex audit and assurance principles/standards and their real-life applications to simple situations requiring audit opinion.
Studying with this syllabus guarantees your success in the forthcoming ICAN examinations and becoming an expert auditor at a go.
Candidates are expected to possess knowledge of accounting systems, generally accepted accounting principles, audit and assurance principles and practice to build a firm foundation for internal and external audit engagements. There is an emphasis on knowledge of national and international auditing standards and their application to simple situations requiring audit opinion.
On successful completion of this paper, candidates should be able to:
| Syllabus for ICAN Skills Level | |||
| Level | Skills | ||
| Course name | B2- Audit and Assurance | ||
| Abbreviation | AA | ||
| A. Objectives, need for and process of audit and assurance | |||
| Topic | Breakdown | Marking guide | |
| 1 | Objectives of audit and assurance (ISA 200) | (a) Discuss the concepts of audit and assurance. (b) Identify and explain the reasons for audit and assurance. (c) Explain the benefits of different types of audit and assurance assignments. (d) Identify the parties in audit and assurance engagements including the members of the audit and assurance team and discuss their roles, duties and rights. (e) Compare and contrast the different levels of assurance that may be obtained from audit and assurance assignments. (f) Discuss audit expectation gap. | 30% |
| 2 | Need for audit and assurance | (a) Discuss the legal and regulatory frameworks for statutory audit and assurance in line with the provisions of: (i) CAMA CAP C20 LFN 2004 (as amended); (ii) BOFIA CAP B3 LFN 2004 (as amended)and with relevant circulars; (iii) Insurance Act 2003, NAICOM Act, 2003; (iv) Financial Reporting Council of Nigeria Act, 2011; (v) Nigerian standards on auditing (NSA); and (vi) International standards on auditing (ISA). (b) Discuss the role of the internal audit department in maintaining an effective internal control system. (c) Compare internal and external audits. (d) Discuss the peculiarities of public sector audit. | |
| 3 | Process of audit and assurance | (a) Explain the basic steps of audit and assurance process in relation to: (i) Nomination; (ii) Acceptance; (iii) Engagement; (iv)Planning (ISA 300, ISA 320); (v) Performance: Evaluation of internal control; Evidence and obtaining evidence (ISA 500); Records and working papers; Testing and other works; Evaluating results (ISA 540); (vi) Conclusion; and (vii) Reporting (ISA 700). (b) Explain public interest and the need for professional scepticism in carrying out audit and assurance engagements. (c) Discuss the concept of materiality (ISA 320). (d) Explain reasonable assurance. (e) Explain opinion and assurance report. | |
| B. The nature and use of internal control (ISA 315) | 20% | ||
| 1 | Discuss the meaning, objectives and nature of internal control. | ||
| 2 | Discuss effective internal control. | ||
| 3 | Discuss the different types of internal control. | ||
| 4 | Discuss responsibilities for instituting and evaluating the effectiveness of internal control. | ||
| 5 | Discuss the main components of internal control. | ||
| 6 | Explain how accounting systems and related internal controls may be identified, recorded and analysed. | ||
| 7 | Discuss the techniques required for evaluating internal controls (walk-through, spot check, compliance test, substantive test)(ISA530); | ||
| 8 | Evaluate internal controls in a given scenario. | ||
| 9 | Discuss the limitations of internal control. | ||
| 10 | Discuss the contents of a management letter. | ||
| 11 | Discuss internal controls in a computerized accounting environment (ISA 315). | ||
| C. Gathering evidence | 30% | ||
| The nature of audit evidence and the selection of sufficient and appropriate audit evidence (ISA 500) | |||
| 1 | Justify the need to maintain and keep working papers and other documentation. | ||
| 2 | Evaluate the different sources and quality of evidence and the methods of obtaining evidence. | ||
| 3 | . Document appropriate procedures for gathering evidence based on a given scenario (ISA 505, ISA 520). | ||
| 4 | Identify the circumstances where written representations may be required (ISA 580). | ||
| 5 | Evaluate the circumstances requiring discussion with senior assurance team members (ISA 450) and advise on how this should be communicated and documented. | ||
| D. Professional ethics and public interest | 20% | ||
| 1 | Discuss the importance of professional ethics. | ||
| 2 | Differentiate between rule-based and principle-based approaches to professional ethics. | ||
| 3 | Explain the meaning of public interest in the context of audit and assurance. | ||
| 4 | Discuss ethical issues under IFAC code and ICAN professional code of ethics and guide for members. | ||
| 5 | Compare ethical issues in the governance of private and public entities. | ||
| 6 | Discuss actions to deal with ethical dilemmas. | ||
| 7 | Assess the ethical threats to independence and safeguards. | ||
| 8 | Assess the ethical conflicts an accountant faces as an employee in a private or public entity. | ||
| 9 | Assess the ethical conflicts facing an accountant when charged with governance in a private or public entity. | ||
| 10 | Discuss the concept of whistle blowing in relation to audit and assurance (non compliance with rules and regulations – NOCLAR). | ||
| Applicable Standards | |||
| 1 | International Standards on Auditing (ISA) | 200 – Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with International Standards on Auditing. 230 – Audit documentation 300 – Planning an Audit of Financial Statements 315- Identifying and Assessing the Risks of Material Misstatement Through Understanding the Entity and its Environment 320 – Materiality in Planning and Performing an Audit 450 – Evaluation of Misstatements Identified during the Audit 500 – Audit Evidence 505 – External Confirmations 520 – Analytical Procedures 530 – Audit Sampling 540- Auditing Accounting Estimates, Including Fair Value Accounting Estimates and Related Disclosures 580 – Written Representations 700 – The Auditor’s Report on Financial Statements. | |
| 2 | Nigerian Standards on Auditing | Note: All the approved and released standards may be examined after six months from date of issue | |
| Syllabus for ICAN Skills Level | |||
| Level | Skills | ||
| Course name | B2- Audit and Assurance | ||
| Abbreviation | AA | ||
| A. Objectives, need for and process of audit and assurance | |||
| Topic | Breakdown | Marking guide | |
| 1 | Objectives of audit and assurance (ISA 200) | (a) Discuss the concepts of audit and assurance. (b) Identify and explain the reasons for audit and assurance. (c) Explain the benefits of different types of audit and assurance assignments. (d) Identify the parties in audit and assurance engagements including the members of the audit and assurance team and discuss their roles, duties and rights. (e) Compare and contrast the different levels of assurance that may be obtained from audit and assurance assignments. (f) Discuss audit expectation gap. | 30% |
| 2 | Need for audit and assurance | (a) Discuss the legal and regulatory frameworks for statutory audit and assurance in line with the provisions of: (i) CAMA CAP C20 LFN 2004 (as amended); (ii) BOFIA CAP B3 LFN 2004 (as amended)and with relevant circulars; (iii) Insurance Act 2003, NAICOM Act, 2003; (iv) Financial Reporting Council of Nigeria Act, 2011; (v) Nigerian standards on auditing (NSA); and (vi) International standards on auditing (ISA). (b) Discuss the role of the internal audit department in maintaining an effective internal control system. (c) Compare internal and external audits. (d) Discuss the peculiarities of public sector audit. | |
| 3 | Process of audit and assurance | (a) Explain the basic steps of audit and assurance process in relation to: (i) Nomination; (ii) Acceptance; (iii) Engagement; (iv)Planning (ISA 300, ISA 320); (v) Performance: Evaluation of internal control; Evidence and obtaining evidence (ISA 500); Records and working papers; Testing and other works; Evaluating results (ISA 540); (vi) Conclusion; and (vii) Reporting (ISA 700). (b) Explain public interest and the need for professional scepticism in carrying out audit and assurance engagements. (c) Discuss the concept of materiality (ISA 320). (d) Explain reasonable assurance. (e) Explain opinion and assurance report. | |
| B. The nature and use of internal control (ISA 315) | 20% | ||
| 1 | Discuss the meaning, objectives and nature of internal control. | ||
| 2 | Discuss effective internal control. | ||
| 3 | Discuss the different types of internal control. | ||
| 4 | Discuss responsibilities for instituting and evaluating the effectiveness of internal control. | ||
| 5 | Discuss the main components of internal control. | ||
| 6 | Explain how accounting systems and related internal controls may be identified, recorded and analysed. | ||
| 7 | Discuss the techniques required for evaluating internal controls (walk-through, spot check, compliance test, substantive test)(ISA530); | ||
| 8 | Evaluate internal controls in a given scenario. | ||
| 9 | Discuss the limitations of internal control. | ||
| 10 | Discuss the contents of a management letter. | ||
| 11 | Discuss internal controls in a computerized accounting environment (ISA 315). | ||
| C. Gathering evidence | 30% | ||
| The nature of audit evidence and the selection of sufficient and appropriate audit evidence (ISA 500) | |||
| 1 | Justify the need to maintain and keep working papers and other documentation. | ||
| 2 | Evaluate the different sources and quality of evidence and the methods of obtaining evidence. | ||
| 3 | . Document appropriate procedures for gathering evidence based on a given scenario (ISA 505, ISA 520). | ||
| 4 | Identify the circumstances where written representations may be required (ISA 580). | ||
| 5 | Evaluate the circumstances requiring discussion with senior assurance team members (ISA 450) and advise on how this should be communicated and documented. | ||
| D. Professional ethics and public interest | 20% | ||
| 1 | Discuss the importance of professional ethics. | ||
| 2 | Differentiate between rule-based and principle-based approaches to professional ethics. | ||
| 3 | Explain the meaning of public interest in the context of audit and assurance. | ||
| 4 | Discuss ethical issues under IFAC code and ICAN professional code of ethics and guide for members. | ||
| 5 | Compare ethical issues in the governance of private and public entities. | ||
| 6 | Discuss actions to deal with ethical dilemmas. | ||
| 7 | Assess the ethical threats to independence and safeguards. | ||
| 8 | Assess the ethical conflicts an accountant faces as an employee in a private or public entity. | ||
| 9 | Assess the ethical conflicts facing an accountant when charged with governance in a private or public entity. | ||
| 10 | Discuss the concept of whistle blowing in relation to audit and assurance (non compliance with rules and regulations – NOCLAR). | ||
| Applicable Standards | |||
| 1 | International Standards on Auditing (ISA) | 200 – Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with International Standards on Auditing. 230 – Audit documentation 300 – Planning an Audit of Financial Statements 315- Identifying and Assessing the Risks of Material Misstatement Through Understanding the Entity and its Environment 320 – Materiality in Planning and Performing an Audit 450 – Evaluation of Misstatements Identified during the Audit 500 – Audit Evidence 505 – External Confirmations 520 – Analytical Procedures 530 – Audit Sampling 540- Auditing Accounting Estimates, Including Fair Value Accounting Estimates and Related Disclosures 580 – Written Representations 700 – The Auditor’s Report on Financial Statements. | |
| 2 | Nigerian Standards on Auditing | Note: All the approved and released standards may be examined after six months from date of issue | |
This ICAN syllabus on Financial Reporting is fully stacked with every topic that helps you, the learner, understand the principles of accounting, international accounting standards, regulatory frameworks for accounting and reporting amongst other courses
If you’re preparing for the ICAN-ACA professional examinations, all you need to come out top is right here.
Studying this syllable will fully endow you with the necessary skills and expertise required for excellence in your forthcoming ICAN examinations.
Financial accounting from the Foundation level is taken up a notch to financial reporting in the context of more complex events and transactions with a greater emphasis on compliance with regulations including international accounting standards and generally accepted accounting principles. Candidates will be expected to demonstrate an understanding of and competence in financial statements preparation, analysis, interpretation and reporting.
On successful completion of this paper, candidates should be able to:
| Syllabus for ICAN Skills Level | |||
| Level | Skills | ||
| Course Name | B6-Financial Reporting | ||
| Abbreviation | FR | ||
| A. Conceptual and regulatory frameworks for financial reporting | |||
| Topic | Breakdown | Marking guide | |
| 1 | Conceptual Framework | (a) Explain the meaning and purpose of conceptual framework. (b) Explain the objectives, qualitative characteristics and limitations of financial statements. (c) Discuss the underlying assumptions in preparing financial statements. (d) Identify users of financial statements and their information needs. (e) Identify and discuss the components of financial statements. (f) Explain the concept of capital maintenance. (g) Differentiate between principle-based and rule-based financial reporting frameworks. (h) Discuss accrual, cash and breakup bases of accounting. | 10% |
| 2 | Regulatory framework | (a) Identify and discuss laws, regulations, accounting standards and other requirements that govern the preparation of financial statements. (b) Identify and discuss relevant provisions of Companies and Allied Matters Act, Cap C20 LFN 2004 (as amended), and special pronouncements by regulatory authorities (CBN, NDIC, FRCN, NAICOM, NSE, SEC, PENCOM, etc.) (c) Explain the standard setting process of International Accounting Standards Board (IASB) and the relationship with national standard setters. (d) Discuss the process of adoption of IFRSs and applicable local standards. (e) Explain the peculiar nature and relevant frameworks of specialized, not-for-profit and public sector entities including IFRS, national standards and International Public Sector Accounting Standards (IPSAS). | |
| B. Accounting standards and policies relating to specific transactions in financial statements | 20% | ||
| 1 | Tangible non-current assets | Calculate, where necessary, discuss and account for tangible non-current assets in accordance with the provisions of relevant accounting standards (IAS 16, IAS 20, IAS 23, IAS 40, and IFRS 5). | |
| 2 | Intangible non-current assets (IAS 38) | Calculate, where necessary, discuss and account for intangible non-current assets in accordance with the provisions of IAS 38. | |
| 3 | Impairment of tangible and non-intangible assets (IAS 36) | Calculate, where necessary, discuss and account for impairment of tangible and intangible non-current assets (excluding financial assets and liabilities) in accordance with the provisions of IAS 36. | |
| 4 | Fair value measurement, financial assets and liabilities | (a) Differentiate between debt and equity financial instruments. (b) Calculate, where necessary, discuss and account for fair value measurement of financial assets and liabilities in accordance with the provisions of relevant accounting standards (IAS 32, IFRS 7, IFRS 9 and IFRS 13) with respect to measurement, recognition, derecognition and disclosures, excluding hedging but including simple impairment cases. | |
| 5 | Inventories and revenue from contracts (IAS 2, IAS 41, IFRS 15) | Calculate, where necessary, discuss and account for inventories and revenue from contracts in accordance with the provisions of relevant accounting standards (IAS 2, IAS 41 and IFRS 15). | |
| 6 | Provisions, contingent liabilities and assets, and events after the reporting period (IAS 10, IAS 37) | Calculate, where necessary, discuss and account for provisions, contingent liabilities and assets as well as events after the reporting period in accordance with the provisions of relevant accounting standards (IAS 10, IAS 37). | |
| 7 | Income taxes (IAS 12) | Calculate, where necessary, discuss and account for income tax including current and deferred tax in accordance with the provisions of IAS 12. | |
| 8 | Earnings per share (IAS 33) | Calculate, discuss and account for earnings per share (EPS) in accordance with provisions of IAS 33. | |
| C. Preparation and presentation of general purpose financial statements 20% Preparation of financial statements | 20% | ||
| 1 | (i) Discuss accounting policies and changes in accounting policies in accordance with the provisions of IAS 8, where necessary. (ii) Prepare and present general purpose financial statements including statement of financial position, statement of profit or loss and other comprehensive income, statement of changes in equity and relevant notes in accordance with IAS 1. (iii) Prepare and present statement of cash flows for single entities in accordance with IAS 7, using direct and indirect methods. | ||
| D. Preparing and presenting financial statements of simple group (parent, one subsidiary and an associate) | 25% | ||
| 1 | Understanding a simple group | (a) Explain the concept of group especially a simple group and the objectives of preparing group financial statements. (b) Discuss the provisions of the relevant accounting standards for the preparation and presentation of financial statements of simple group – (IAS 27, IAS 28, IFRS 3 and IFRS 10), including the use of fair value for non-controlling interest. (c) Calculate non-controlling interest using alternative methods and effect necessary adjustments required to prepare the financial statements of simple group. | |
| 2 | Preparation and presentation | (a) Prepare and present statement of financial position of a simple group (one subsidiary and an associate in accordance with the provisions of relevant standards (IAS 1, IAS 27, IAS 28, IFRS 3 and IFRS 10). (b) Prepare and present statement of profit or loss and other comprehensive income of a simple group (one subsidiary and an associate), in accordance with the provisions of relevant standards (IAS 1, IAS 27, IAS 28, IFRS 3 and IFRS 10). (c) Prepare and present statement of cash flows of a simple group (one subsidiary and an associate), in accordance with the provisions of IAS 7. | |
| E. Analyses and interpretation financial statements | 20% | ||
| 1 | Analyses of financial statement | (a) Identify and discuss types of analyses and interpretation of financial statements. (b) Discuss various aspects of financial position and performance that may be assessed (profitability, liquidity/solvency, gearing, investors’ returns) through the analyses and interpretation of financial statements. (c) Define ratio, identify and calculate various types of ratios used in the assessment of financial position and performance of a business entity. (d) Analyse and interpret computed ratios and assess the current period financial position and performance of a business entity in comparison to (i) its prior period (ii) another given entity for the same period and (iii) industry average for the same period. (e) Analyse and interpret computed ratios and assess the current period financial position and performance of a simple group (one subsidiary and associate) in comparison to (i) its prior period, (ii) another given simple group entity for the same period and (iii) industry average for the same period. (f) Discuss the use of statement of cash flows in assessing liquidity and compare its usefulness with that of a statement of profit or loss and other comprehensive income when assessing liquidity and going concern of a business entity. (g) Explain the use of earnings per share (EPS) in assessing the performance of corporate entities in the capital market, especially capital market reaction to earnings announcement. (h) Where necessary, write reports as may be required when analysing and interpreting the financial position and performance of a business entity and simple group, drawing conclusions, making recommendations and giving advice from the perspectives of different stakeholders. | |
| 2 | Limitations of analyses and interpretation of financial statements | (a) Discuss the limitations of historic financial information in the analyses and interpretation of financial statements. (b) Explain how financial statements may be manipulated and discuss the impact of window dressing and creative accounting on calculated ratios and how they can distort analyses and interpretation of financial statements. (c) Explain how analyses and interpretation of financial statements of specialized and not-for-profit organizations differ from those of profitoriented organizations. (d) Explain why earnings per share (EPS) trend may be a better indicator of performance when compared with a company’s profit trend and discuss the limitations of using EPS as a performance measure. (e) Explain why and how the use of consolidated financial statements might limit analyses and the use of interpretation techniques. (f) Discuss the use of other information, including non-financial information relevant to the assessment of an entity’s performance. | |
| F. Ethics and current developments in financial reporting | |||
| 1 | Discuss and apply ethical issues in financial reporting | ||
| 2 | Discuss developments around the inclusion of non-financial information in financial reporting. | ||
| 3 | Discuss new accounting standards in issue as may be specified from time to time. | ||
| Applicable Accounting Standards | |||
| Preface to IFRS Conceptual Framework for Financial Reporting IAS 1 – Presentation of Financial Statements IAS 2 – Inventories IAS 7 – Statement of Cash Flows IAS 8 – Accounting Policies, Changes in Accounting Estimates and Errors IAS 10 – Events after the Reporting Period IAS 12 – Income Taxes IAS 16 – Property, Plant and Equipment IAS 20 – Accounting for Government Grants and Disclosure of Government Assistance IAS 23 – Borrowing Costs IAS 27 – Separate Financial Statements IAS 28 – Investments in Associates IAS 32 – Financial Instruments: Presentation IAS 33 – Earnings Per Share IAS 36 – Impairment of Assets IAS 37 – Provisions, Contingent Liabilities and Contingent Assets IAS 38 – Intangible Assets IAS 40 – Investment Property IAS 41 – Agriculture IFRS 3 – Business Combinations IFRS 5 – Non-current Assets Held for Sale and Discontinued Operations IFRS 7 – Financial Instruments: Disclosures IFRS 9 – Financial instruments IFRS 10 – Consolidated Financial Statements IFRS 13 – Fair Value measurement IFRS 15 – Revenue from contracts with customers New standards may be examined after six months from the date of issue. All applicable laws may be examined after six months from date of amendment or enactment. | |||
| Exemption Guidelines | ||
| SN | Academic Qualification | Exemptions |
| A | PhD (Accounting) with M.Sc. (Accounting) and B.Sc.(Accounting) | All subjects in Foundation and Skills levels |
| B | M.Sc. (Accounting) obtained from ICAN accredited institutions in addition to B.Sc. in Accounting. | All subjects in Foundation level B1.Financial Reporting B2. Audit and Assurance |
| C | M.Sc. (Accounting) obtained from ICAN accredited institutions but without B.Sc. in Accounting. | A2. Business, Management and Finance A3. Financial Accounting A4. Management Information |
| D | M.Sc. (Accounting) obtained from non-accredited institutions in addition to B.Sc. in any accounting related discipline. | A2. Business, Management and Finance A3. Financial Accounting A5. Business Law |
| E | B.Sc/HND (Accounting) obtained under the Mutual Co-operation Agreement with Tertiary Institutions (MCATI) | All subjects in Foundation and Skills Levels |
| F | ATSWA ( from year 2010) | All subjects in Foundation Level B2. Audit and Assurance |
| G | ATS II (pre-2010) | A2. Business, Management and Finance A3. Financial Accounting A4. Management Information |
| H | B.Sc./HND (Accounting) obtained from ICAN accredited Institutions in Nigeria. | All subjects in Foundation Level B2. Audit and Assurance |
| I | B.Sc./HND (Accounting) obtained from recognised institutions in Nigeria but not accredited by ICAN. | A2. Business, Management and Finance A3. Financial Accounting A5. Business Law |
| J | B.Sc./HND (Accounting)/ Masters in Accounting & Finance (MAF) obtained from foreign recognised institutions. | A2. Business, Management and Finance A3. Financial Accounting A4. Management Information |
| K | B.Sc. Economics | A2. Business, Management and Finance |
| L | B.Sc. Actuarial Science | A2. Business, Management and Finance A5. Business Law |
| M | B.Sc./HND Insurance | A2. Business, Management and Finance A5. Business Law |
| N | B.Sc./HND/B.A Business Admin/Management/Public Administration | A2. Business, Management and Finance A5. Business Law |
| O | B.Sc./HND Banking and Finance | A2. Business, Management and Finance A5. Business Law |
| P | B.Sc./HND Marketing | A2. Business, Management and Finance A5. Business Law |
| Q | MBA/MBF in addition to B.Sc./HND in non- accounting discipline | A2. Business, Management and Finance A5. Business Law |
| R | B.Sc. (Ed.) Accounting or B.Ed. Business Education (Accounting option) | A2. Business, Management and Finance A3. Financial Accounting A5. Business Law |
| S | B.Ed. Education Management (Accounting Option) | A2. Business, Management and Finance A5. Business Law |
| T | B.Ed. Business Education | A2. Business, Management and Finance |
| U | B.Sc./B.A Commerce | A2. Business, Management and Finance A5. Business Law |
| V | B.Sc./HND Cooperative and Rural Development | A2. Business, Management and Finance A5. Business Law |
| W | LL.B/LL.M/LL.D | A5. Business Law |
| Professional qualifications | ||
| SN | Qualifications | Exemptions |
| A | Associate Chartered Institute of Bankers of Nigeria (ACIBN) | All subjects in Foundation level except Taxation |
| B | Associate Institute of Financial Services, UK (Formerly Chartered Institute of Bankers, London) | A2. Business, Management and Finance A3. Financial Accounting |
| C | Associate Chartered Institute of Stockbrokers of Nigeria (ACIS) | A2. Business, Management and Finance A3. Financial Accounting A5. Business Law |
| D | Associate Institute of Chartered Secretaries and Administrators (AICSA) | A2. Business, Management and Finance A3. Financial Accounting A5. Business Law |
| E | Associate Chartered Institute of Insurance of Nigeria (ACIIN) | A2. Business, Management and Finance A5. Business Law |
| F | Associate Chartered Institute of Taxation of Nigeria (ACITN) | All subjects in Foundation level except Management Information |
| G | Certified National Accountant of Nigeria (CNA) | All subjects in Foundation and Skills levels |
| H | Federal Treasury Academy with effect from 1987 (Formerly Federal Treasury Training School) (EMA) | All subjects in Foundation Level B2. Audit and Assurance |
| I | ICAEW | All subjects at all levels |
| J* | CIPFA, UK | All levels except the following subjects in each of the levels: A5. Business Law C4. Advanced Taxation |
| K* | CIMA, UK | All levels except the following subjects in each of the level: A5. Business Law B5. Public Sector Accounting & Finance C2. Advanced Audit and Assurance C4. Advanced Taxation |
| L* | ACCA, UK CPA, USA ICAS, UK ICAI, UK | All levels except the following subjects in each of the levels: A5. Business Law B5. Public Sector Accounting & Finance C4. Advanced Taxation |
| M | AIA (Final) with effect from 1994 AAT (UK) | A2. Business, Management and Finance A3. Financial Accounting A4. Management Information B2. Audit and Assurance |
| N | AIA (Pre-1994) | A2. Business, Management and Finance A3. Financial Accounting A4. Management Information |
Exam registration fee for the skills-level of ICAN depends on the number of courses you want to register for. Writing 5 courses at this level will cost you N84,740. See fee breakdown
There are five courses in the skills level of ICAN. They are; Financial Reporting, Audit and Assurance, Corporate Strategic Management and Ethics, Performance Management, and Public Sector Accounting, Finance and Taxation.
Candidates must register online for the examinations. Visit the institute’s website www.icanig.org for guidelines on students’ registration.
The Skills level examinations can be completed in one diet sitting. Candidates writing the examinations may register for any number of papers at a level and shall be credited with each paper passed. However, they are expected to complete the examination at a level before attempting papers at a higher level.
The ICAN professional examination is done twice a year, usually in May and November. However, registration for the exam starts 3 months before the exam dates.
The pass mark for each paper of the ICAN examination is 50%.
You can choose “self-study” or attend tutorials. It is advised that you study for the exams using the updated ICAN syllabus which available at syllabus.ng.
