PROCEDURE OF PAPER ATTEMPT OF ICAP PAPERS

PROCEDURE OF PAPER ATTEMPT OF ICAP PAPERS

THE PASSING MARKS ARE 50 OUT OF 100.

AND THERE IS NO NEGATIVE MARKING.

SO YOU CAN ONLY MANAGE TO PASS BY COVERING ALL SYLLABUS AND ATTEMPT ALL PAPER AS SHOWN BELOW.

J O I N T H E D I S C O U R S E PUBLISHED IN PAKISTAN ACCOUNTANT

J O I N T H E D I S C O U R S E PUBLISHED IN PAKISTAN ACCOUNTANT at

http://www.icap.org.pk/userfiles/file/Publication/Pak_apr_jun_2010.pdf

In my opinion the greatest risks to global business will be:


Energy crisis

Law and order, terrorism, and political strikes

Cost inflation with stiff competition

New technologies accompanied by day to day swift changes

Financial volatility

Organizations are realizing that risk is no longer a liability and if

managed adequately becomes a powerful asset that may offer a

competitive advantage.

Haroon Sulaman

Faisalabad

SUPPLY CHAIN MANAGEMENT

Supply Chain Management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption (supply chain).
A simple supply chain model consists of four components:




• Supplier: supplies the raw materials



• Manufacturer: produces the product



• Warehouse or Distribution Center: stores and ships the product



• End User: receives the product



Supply chain management software




Supply chain management software (SCMS) is a business term which refers to a range of software tools or modules used in executing supply chain transactions, managing supplier relationships and controlling associated business processes.

While functionality in such systems can often be broad – it commonly includes:

1. Customer requirement processing

2. Purchase order processing

3. Inventory management

4. Goods receipt and Warehouse management

5. Supplier Management/Sourcing

BENEFITS OF SCM APPLICATIONS:



Improving relationship with customers and buyers:

1) Quick order processing and delivery of goods.




2) Ensuring availability of goods.



3) Correct product and price information.



4) Timely payments.



Reduction in production cost by;



1) Reducing manpower requirements through greater automation.



2) Lowering the levels of inventory.



Co-ordination within the departments by providing single source of information which results in;



1) timely response among departments; and



2) Lesser conflicts in views.

SYSTRUST AND WEBTRUST

SYSTRUST AND WEBTRUST




SysTrust and WebTrust are two specific services developed by the AICPA that are based on the Trust Services Principles and Criteria. SysTrust engagements are designed for the provision or advisory services or assurance on the reliability of a system. WebTrust engagements relate to assurance or advisory services on an organization's system related to e-commerce. Only certified public accountants (CPAs) may provide the assurance services of Trust Services that result in the expression of a Trust Services, WebTrust, or SysTrust opinion, and in order to issue SysTrust or WebTrust reports, CPA firms must be licensed by the AICPA.





The following principles and related criteria have been developed by the AICPA/CICA for use by practitioners in the performance of Trust Services engagements such as SysTrust and WebTrust.



♦ Security. The system is protected against unauthorized access (both physical and logical).





♦ Availability. The system is available for operation and use as committed or agreed.



♦ Processing integrity. System processing is complete, accurate, timely, and authorized.



♦ Online privacy. Personal information obtained as a result of e-commerce is collected,

used, disclosed, and retained as committed or agreed.



♦ Confidentiality. Information designated as confidential is protected as committed or

agreed.



Each of these Principles and Criteria are organized and presented in four broad areas:



♦ Policies. The entity has defined and documented its policies relevant to the particular

principle.
♦ Communications. The entity has communicated its defined policies to authorized users.




♦ Procedures. The entity uses procedures to achieve its objectives in accordance with its

defined policies.



♦ Monitoring. The entity monitors the system and takes action to maintain compliance

with its defined policies.

ERP PROJECT COST

Cost of ERP - What does ERP really cost?


The total cost of ERP ownership includes the costs of packaged software, hardware,

professional services (for ongoing maintenance, upgrades and optimization) and internal

costs.

Costs of Software
 
The cost of packaged ERP software depends on the scope of implementation (the # of ERP


modules and the number of end users), complexity of software and ERP vendors. ERP

software that involves the integration with external business entities generally costs more.

ERP vendors offer discount for organizations who invest in a suite of ERP software

systems. Mid-sized organizations typically commit a few million dollars to packaged ERP

software.

Costs of Hardware

Implementation of ERP systems routinely requires purchase of new computer hardware,

systems software, network equipment and security software. The costs of hardware vary in

a wide range dependent on the scope of implementation and platforms. The hardware

typically costs about half million dollars for mid-sized organizations that implements ERP

systems.

Costs of Professional Services

Customization The big chunk of costs of Professional Services is customization. The cost

of customization can easily out-run the cost of packaged ERP software, but it is the

customization of ERP software that makes an ERP a success or a failure.

Integration ERP systems won't demonstrate its full potentials unless they are properly

integrated with other enterprise software application:

1. the integration of various functional ERP modules,

2. the integration of ERP with other e-business software applications, and

3. the integration of ERP with legacy systems.

Data Conversion

The cost of data conversion depends on the format and the media that

store the historical data. Data conversion from legacy systems to RDBMS is a timeconsuming

process. Data conversion may lead to further data gathering to fill the missing

links in data requirements.
 
Testing
 
 ERP systems are thoroughly tested before they go into production. ERP testing


includes unit testing, component testing, regression testing, performance testing and user

acceptance testing.

Training

Workflow and UI design in ERP software are more complex than average

business software. ERP training is expensive because workers almost invariably have to

learn a new set of processes of doing their daily tasks besides learning how to use the ERP

software. To reduce the cost of ERP training and to ease the transitions from old processes

to new, organizations often seek the help from training companies which are specialized in

coaching workers on using ERP software from particular vendors.

WHY ERP PROJECT FAIL?

WHY ERP PROJECT FAIL?


Among companies that have been through a- less-than-fully successful ERP


implementation five reasons for poor results show up consistently:

• Operating strategy did not drive business process design and deployment.

• The implementation took much longer than expected.

• Pre-implementation preparation activities were done poorly, if at all.

• People were not well-prepared to accept and operate with the new system.

• The cost to implement was much greater than anticipated.

There Is No Magic in ERP Software: It’s in Preparation of the Process and People

Successfully implementing ERP the first time requires a structured methodology that is

strategy-, people and process-focused.

Federal budget 2009 & textile sector

Federal budget 2009 & textile sector

Introduction

Pakistan is the 4th largest cotton producer and 3rd largest cotton consumer. The textile and clothing industry has been the main driver of the export based industry for the last 50 years in terms of foreign currency earnings and jobs creation.

Textile Industry has made an investment of about 7.5 billion US$ during the last ten years (1999-2009). China, India and Bangladesh are posing tough challenge by virtue of their competitiveness.

What comprise its cost & revenue?

Cost is determined by

Raw material

Labour

Factory overhead ( mainly energy)

All other cost

Revenue is determined by whatever sale is made.

It has two markets to sale.

Local sale

Export sale

IMPORTANT QUESTIONS ARE

How textile industry will grow ( 2008 2.6 2009 -.7)

How to enhance its exports

How to increase foreign exchange reserves

How to create employment opportunities in the country

How to lower cost of doing business in pakistan to cater foreign investment

Demands from textile industry

Immediate financial relief

Special treatment on energy ( gas & electricity)

Market access

Federal budget 2009

A) "The government is managing the affairs of our country within a strategic policy framework expressed in its Nine Point Agenda of economic and socialrecovery. I take this opportunity to highlight these nine pillars:

I. Macroeconomic Stability and Real Sector Growth.

II. Protecting the Poor and the Vulnerable.

III. Increasing Productivity and Value Addition in Agriculture.

IV. Making Industry Internationally Competitive.

V. Capital and Finance for Development.

VI. Removing Infrastructure Bottlenecks through Public Private Partnerships.

VII. Integrated Energy Development Programme.

VIII. Human Capital Development for the 21st Century.

IX. Governance for a Just and Fair System."

"SOURCE BUDGET SPEECH FOR FISCAL YEAR 2009-10 "

B) Some of the textile circles feared that the federal budget would prove last nail in manufacturing sector's coffin, as the budget lacks a booster for growth of manufacturing sector, guaranteeing job creation over the last four decades.

C) The State Minister for Finance & Revenue Hina Rabbani Khar did not explained in her budget speech as to how the government was going to revive the industrial sector, particularly textile industry, which contributes 67 per cent to the country’s total exports

D) With a view to moving industry towards consolidation and value addition an Export Investment Support Fund, worth Rs. 40 billion has been proposed for FY 2009-10. The government will contribute Rs 10 billion towards this fund; another Rs 10 billion would be contributed by the Export Development Fund; balance Rs 20 billion would be contributed by governmental agencies through mopping up of surpluses in commercial banks.

"SOURCE BUDGET SPEECH FOR FISCAL YEAR 2009-10 "

The announcement of Rs 40 billion as industrial support fund does not clarify that what is being earmarked for which sector.????

E) 'The government proposes to declare fiscal 2009/10 as the year of industrial recovery.'

But it spreads disappointment simultaneously by missing the measures to bring the textile industry out of woe.

Federal budget 2009- 2010 of Pakistan

Federal budget 2009- 2010 of Pakistans

To know & download Federal budget 2009- 2010 of Pakistans .
++++++++++++++++++++++++++++++++

Economic Survey of Pakistan 2009

Economic Survey of Pakistan 2009

To know & download
====================

IAS-2 Inventories ( Measurement of cost)

IAS-2 Inventories (Accounting treatment)

Inventories shall be measured at the lower of cost and net realisable value.

Net realisable value is the:

estimated selling price in the ordinary course of business
less
the estimated costs of completion and
the estimated costs necessary to make the sale.

The cost of inventories shall comprise all :

costs of purchase,

costs of conversion and

other costs incurred in bringing the inventories to their present location and condition.

Inventory cost should not include:

abnormal waste

storage costs

administrative overheads unrelated to production

selling costs

foreign exchange differences arising directly on the recent acquisition of inventories invoiced in a foreign currency

interest cost when inventories are purchased with deferred settlement terms.

Illustration 1

ABC ltd record shows the following data regarding abc material.

Invoice value of $ 1,000 ( Net of Trade discount $ 2)

Freight $5

Storage cost $ 1

Compute the cost of material to be recognised as per IAS -2

Solution:

Cost of material:

costs of purchase $ 1,000 + Freight $5 = $ 1,005

Storage cost is not included as per IAS-2

costs of purchase (including taxes, transport, and handling) net of trade discounts received.

Standard cost & retail method

The standard cost and retail methods may be used for the measurement of cost, provided that the results approximate actual cost.

Specific costs.

For inventory items that are not interchangeable, specific costs are attributed to the specific individual items of inventory.

For items that are interchangeable:

IAS 2 allows the FIFO or weighted average cost formulas.

(Fifo & weighted average illustration as per above.)

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Japan's economy takes sharp downturn as GDP falls 4%

Japan's economy takes sharp downturn as GDP falls 4%

Japan's GDP contracted at an alarming rate in the first quarter, dropping 4% compared with the previous quarter and 15.2% compared with the same period last year. The decline, the fourth consecutive quarter of such, was the biggest since 1955, when Japan started keeping GDP records

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To know more

North Korea sees record expansion in trade

North Korea sees record expansion in trade

The value of North Korean foreign trade, excluding deals with South Korea, set a record last year, Yonhap News reported. Exports increased 23% to $1.13 billion, while imports expanded 32.7% to $2.69 billion

==========
To know more

Canada's banks stay strong, profitable through recession

Canada's banks stay strong, profitable through recession

When market conditions in Canada were at their worst during the first quarter, the country's major banks were making a profit. None of the banks has needed a government bailout. Mortgage interest is not tax deductible, eliminating an incentive to borrow, and when loan to value is more than 80%, the mortgage must be insured by an agency of the Canadian government

========

To know more

Spanish prime minister moves to keep jobs, cut taxes

Spanish prime minister moves to keep jobs, cut taxes

Facing Spain's most dramatic setback in 40 years, Prime Minister Jose Luis Rodriguez Zapatero took aggressive action to breathe life into the economy. He plans to cut taxes for small businesses that keep their employees and pay $2,700 bonuses to people who buy cars made in Spain. He also plans to eliminate airport fees for airlines that carry at least the same number of passengers as last year.The government had already announced stimulus measures valued at about €71 billion, including an €11 billion public works program.

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To know more

China's foreign direct investment drops 7 months straight

China's foreign direct investment drops 7 months straight

In April, foreign direct investment in China fell 22.5%, the seventh consecutive monthly decline. "This is a reflection of multinational companies around the world tightening their belts," said David Cohen, an economist with Singapore's Action Economics. "The weakness is being offset by the fiscal-stimulus measures of the Chinese government.

================
To know more

Japan's 10 automakers expect 2009 losses to cross $10B

Japan's 10 automakers expect 2009 losses to cross $10B

Hit hard by plummeting auto sales worldwide and the strength of the yen, Japan's 10 automakers predicted that their combined losses for fiscal 2008 -- $3.35 billion -- will more than triple to $10.48 billion this fiscal year. "We've begun to see the bottom, but there's no sign of recovery," Mitsubishi Motors President Osamu Masuko said.

+++++++++++

To know more

Industrial production slides 20.2% in eurozone

Industrial production slides 20.2% in eurozone

Industrial output across the eurozone dropped 20.2% in March compared with the same month last year, according to Eurostat, the EU's statistics office. The surprisingly sharp decline marked the biggest year-on-year fall since 1991, when records began to be kept.

To know more

Indian industrial production sees worst drop since 1993

Indian industrial production sees worst drop since 1993

Output from India's factories, mines and utilities fell 2.3% in March compared with the same month last year, as exports suffered amid the severest global downturn since World War II. The drop in production was triple the figure analysts predicted and the worst for India's economy since January 1993.
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To know more

Oracle won't divest Sun's hardware business

Oracle won't divest Sun's hardware business

Oracle Corp Chief Executive Larry Ellison said he won't sell off Sun Microsystems Inc's hardware business, dispelling speculation that he only wanted the company for its software units.

Oracle's steadily rising profit margins have impressed Wall Street in recent years, and analysts say it is a risky move for it to buy Sun, which has lost $2 billion in the first three quarters of its current fiscal year.

To know more

BoE announces surprising initiative to buy more bonds

BoE announces surprising initiative to buy more bonds

The Bank of England surprised the City by ordering a £50 billion expansion of its scheme for buying corporate and government bonds. The move is part of the bank's aggressive campaign to bolster the economy and stabilize the financial sector. The move came as the BoE's Monetary Policy Committee kept interest rates at 0.5% for the second straight month.

To know more