CA Foundation to Replace CPT
In response to changes in the requirements of Job Market and to develop multi-dimensional Chartered Accountants, The Institute of Chartered Accountants of India (ICAI) has recently revised the chartered accountancy course structure of Common Proficiency Test (CPT) and renamed it as “CA Foundation” – to add better future competencies to future Chartered Accountants. Now new subjects have been added in CPT and exam is renamed as CA foundation- entry level exam to become CA. Moreover, the new pattern is a blend of objective and subjective paper. The basic objective of making such change is to make CA’s competitive in the Global Village. The revised scheme for new CA foundation exam came into effect from 1st July 2017. From July 1, 2017 onwards, an aspirant can register only under new pattern, and the first examination under new pattern will be held in May 2018. Surely, this step will allow only competitive students to clear this exam.
The other reason that can be attributed to making the change in the syllabus is that it has been developed in sync with the International Education Standards issued by International Accounting Education Standards Board (IAESB )and inputs from ICAI members and other experts.
Why Emphasis on Regularly Changing Pattern of Exams?
Change is always constant everywhere. Just like in MBBS, Chartered Accountancy is also a profession in Indian society & abroad. Consequently, it is seen in high esteem. Constant changes are made in the curriculum of Medical Science in line with development in research. Similarly, with the changes in Job Market and competencies, ICAI has issued the notification to replace CPT by CA foundation: the first step to becoming CA has been changed.
The Unique Selling Proposition (USP) of CA is that the course curriculum of CA is updated regularly as a result of changes in ever-evolving business & economic scenario and requirement of new competencies in the Job Market. Passing criteria for cracking CA has become tougher. Consequently, Job Market is and will always be in high demand of CA.
What Changes are Made?
As per the latest changes, the three levels would now be renamed as Foundation, intermediate and final. New subjects have been added in Syllabus of CA foundation and the weightage given to some papers have been either increased or decreased. At present, the paper on fundamentals of accounting carries 60 marks. Now after implementing changes, the above-mentioned paper will be renamed as principles and practices of accounting and will carry 100 marks. Reason being, it is the core subject of CA profession.
On top of that, new subjects have been added: General English and Business & Commercial knowledge. Reason being, knowledge of these subjects is in crucial demand in the present Corporate World. This step is also taken to ensure that entry-level exam (CA foundation) becomes more difficult -to balance demand and supply of CA’s in the job market. Moreover, the foundation examination will be partly objective and partly descriptive. So, the new system is more transparent: In the present MCQ-based system most of the students do guesswork. Consequently, in the past, even undeserving students used to reach the next level. This practice had repercussions on quality standards of CA profession.
CA CPT Old Scheme Vs CA Foundation New Syllabus
|Old Scheme||New Scheme|
|Common Proficiency Test (CPT)||CA Foundation|
|200 Marks||400 Marks|
|Fundamental of Accounting|
|Principles and Practices of Accounting|
|Mercantile Law (40 Marks)|
|General English (40 Marks)|
Mercantile Law (60 Marks = ICA + SOGA + PA = 45 Marks + LLP + Companies Act = 15 Marks) and
|General Economics (50 Marks)|
|Business Economics (60 Marks) and Business and Commercial Knowledge (40 Marks)|
|Quantitative Aptitude (50 Marks)|
|Business Mathematics (40 Marks), Logical Reasoning (20 Marks) and Business Statistics (40 Marks)|
Information about Schedule of both Exams: Common Proficiency Test (CPT) and CA Foundation
|Type of Entry Level Exam||Date|
|Last Date for CPT Registration||June 30, 2017|
|First time registration for CA Foundation||July 1, 2017|
|Schedule of First Foundation Exam||May, 2018|
|Schedule of last CPT Exam||June 2019|
Parallel Attempts – There will be three parallel attempts
|June 2018||May 2018|
|December 2018||November 2018|
|June 2019||June 2019|
The new subjects added and their syllabus is as follows:
General English (40 Marks)
|SECTION A||SECTION B||Section C|
|Topic : Comprehension Passages and Note Making|
Subtopic : Comprehension Passages
Subtopic: Note Making
|Topic: Developing Writing Skills|
Subtopic: Article Writing
Subtopic: Report Writing
Subtopic : Writing Formal Letters
Subtopic : Writing Mails
Subtopic : Resume Writing
|Topic: Basic English Grammar|
Chapter-1 Introduction to Basic Writing
Chapter-2: Nouns, Pronouns and Verbs
Chapter-3 Articles, Adjectives and Adverbs
Chapter-4 Prepositions, Conjunctions and Interjections
Chapter -5 Direct-Indirect, Active -Passive Speech
Chapter 6 :Vocabulary Root Words, Synonyms, Antonyms, Prefixes, Suffixes), Phrasal verbs, Collocations and Idioms.
Paper 3 (Section A) : Business Mathematics and Logical Reasoning
Following few topics added in Business Mathematics
Algebra of Matrices, Inverse of a Matrix and determinants, solving system of equations using matrix method (Cramer’s rule) involving not more than 3 variables.
Nominal rate of return
Compound Annual growth rate (CAGR)
Logical reasoning is new paper carrying 20 Marks
Number series coding and decoding and odd man out
Paper 3 (Section B) : Business Statistics
Paper 4: Business Economics & Business and Commercial Knowledge (100 Marks)
Part I: Business Economics (60 Marks)
- Introduction to Business Economics
(a) Meaning of Business Economics
(b) Objectives of Business Firm- Profit Maximization, Sales Maximization, Growth Maximization.
- Theory of Demand and Supply
(a) Meaning and determinants of demand, Law of demand and Elasticity of demand ─ Price, income and cross elasticity (b) Theory of consumer’s behaviour – Marshallian approach and Indifference curve approach (c) Meaning and determinants of supply, Law of supply and Elasticity of supply.
(d) Demand Forecasting
- Theory of Production and Cost
(a) Meaning and Factors of production
(b) Laws of Production – The Law of Variable proportions and Laws of Returns to Scale, Producer’s equilibrium
(c) Concepts of Costs ─ Short-run and long-run costs, Average and marginal costs, Total, fixed and variable costs.
Price Determination in Different Markets
(a) Various forms of markets – Perfect Competition, Monopoly, Monopolistic Competition and Oligopoly (b) Price determination in these markets.
- Business Cycles
Meaning of Business Cycles
Phases of Business Cycles
Features of Business Cycles.
Causes behind these Cycles.
Paper 4 Part II Business and Commercial Knowledge
Introduction to Business
Nature of Business, Profession and Employment. Objectives of Business. Business and Commercial Knowledge. Economic and Non-Economic Activities.
Micro and Macro Environment, Elements of Micro Environment –
Consumers/Customers, Competitors, Organization, Market, suppliers, Intermediaries, Elements of Macro Environment – Demographic, Economic, Political-legal, Sociocultural, Technological, Global Environment.
Business organizations Top Indian and Global Companies.
Government Policies for Business Growth
Policies creating conducive business environment – Startups,E-commerce.
Liberalization, Privatization, Foreign Direct Investment.
Organizations facilitating Business
Indian regulatory bodies – SEBI, RBI, IRDA, CCI, FMC, CBDT, CBEC Indian Development Banks – IFCI, IDBI, SIDBI, EXIM Bank,NABARD
Global organizations and world trade bodies – IMF, ADB, WTO, OECD, SAARC, ASEAN, OPEC.
Accounting Bodies – IFAC,IASB, IESB, CAPA, SAFA, AOSSG.
Common Business and Commercial Terminologies
Finance, Marketing and other business terms. Stock Market Terminology.