Expert analysis of CA Final (New) examination May/June 2019

Financial Reporting (CA Final - New Course)

Analysis of Financial Reporting CA Final New syllabus paper by CA Sumit Sarda:

This was the easiest paper asked till now, each and every question directly from the module, Ind AS is comparatively very vast and this attempt it was expected that some concept based questions will be asked, but ICAI has kept it simple maybe because the syllabus is very vast.

Weightage

• Analysis of Financial Statements: 16 marks
• Business Combination and Consolidation: 35 marks
• Revenue recognition: 5 marks, the amended new standard a question was expected asked straight from the module
• Financial Instruments: 12 marks (with a little confusing point on what is the face value of preference shares)
• Share-based payments: 8 marks
• Accounting Standards: 8 marks
• Other Ind AS: 23 marks
• Other Chapters: 16 marks

Comparatively paper was easy and students I don't feel would have face any difficulty

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Corporate & Economic Laws (CA Final - New Course)

Analysis of Corporate & Economic Laws - May 2019 paper by CS Tejpal Sheth

As declared by the ICAI, paper was divided into two parts. Part I consist 30 marks MCQs, which is not available to public domain and therefore, it is not possible to analyze and comment anything on it. But it can be  nderstood that MCQs should be of good quality and based on application approach. When it was announced by ICAI, majority of students thought that MCQs will be like CPT. From the sample MCQs, it can be inferred that it is in line with MCQs asked in CPA examination.

Part II contains descriptive questions. If I would like to announce my analysis in one line, I would say – 'Paper was good and balanced'. But we would like to go in detail and carry out analysis on question wise. Question no. 1(a) is ordinary question testing understanding of students regarding deemed appointment of directors. Most of students did well in exam for this question. The same kind of question was asked in November 2008 examination too.

Question no. 1(b), really good question. Question require to combine few sections to arrive at answer. It deals with sections 188, 184 and 167. Most of students who have written answer should have concept clarity otherwise they will not get good marks. Examiner will assign 2-3 marks for loose answer.

Question no 2(a)(i) is testing knowledge on oppression and mis-management. It has two concepts for testing. One, requisite number for making an application for oppression and mis-management and second, incurring losses and not declaring divided amount as mismanagement? 4 marks will be divided between these two concepts. The question is similar to the past question asked in May 1999 & May 1997.

Question no 2(a)(ii) is testing knowledge on compromise-amalgamation etc. In my opinion, it is cash cow question as weightage is four marks. The question is similar to the past question asked in May 2003, 2010, 2017 & November 2014. It is routine and ordinary question.

Question no. 2(b) is based on SARFESAI Act, 2002. Question needs understanding on 'NPA' and 'Section 31'. Question had been asked in past on section 31. Concept of NPA is explained in good way in study material of ICAI. As it is for 6 marks, one has to explain relevant theory part in good manner followed by application and its conclusion.

Question no. 3(a) is asking on validity of act of tribunal from perspective of Companies Act, 2013. It falls within chapter of winding up. Most of students are not paying much attention to winding up provisions. Remember, it is question for 8 marks. If you could not write it in well manner, it is great loss. It deals with section 301 of Companies Act, 2013. In my opinion, it is cornered question. Good choice of question.

Question no. 3(b)(i) and (ii) are based on past questions asked. It is on money laundering. Students should not forget that ICAI is continuously asking questions on PMLA. It is for 2+4 marks. ICAI is asking question from PMLA from certain topics like; punishment of ML, Section 5 & 12 in majority of cases.

Question no. 4(a) (i) is related to SEBI Guideline (now it is SEBI (ICDR) Guidelines 2018) and testing knowledge on eligibility for making IPO. For, four marks, it is lengthy question in my opinion. Sub-questions are designed in such manner so as it requires clear concept clarity to write answer in perfect way.

Question no. 4(a)(ii) is related to SCRA and pure theory type question. Remember, it is asking factors and not penalty amount. Many students do not read it carefully and write something else which was never required by examiner.

Question no. 4(b) is related to FCRA. In times to come, importance of FCRA is likely to increased as Government is implementing it strictly. I except at least one question from this chapter. For, 6 marks it tests two concepts; one-eligibility for registration and second provisions for cancellation. It is good question in my opinion, newly drafted by ICAI.

Question no. 5(a) is really good drafted question and related to dormant company. In my opinion, it is like question asked in ICSI final paper. It requires understanding concept of significant accounting transaction. For, 8 marks, it is good question. When special resolution is required is good dot for pondering. Only students who are through with procedure can answer it.

Question no. 5(b) is class question. Its tricky question. Most of students shared with me that it was lengthy question but it is not. It requires understanding of section 53 of IBC. IBC has good coverage in exam. Priority of payment if understood but not presented in good manner in answer will not fetch good marks. Students may take note that IBC will have good questions in exam yet to come.

Question no. 6(a) and its optional question are good and can be answered by students easily. With respect to alternative question, it requires good understanding of temporary loan within section 180. It requires good working note too.

Question no. 6(b) is again good question and related with disqualification of directors. It is based on question asked in past.

Question no. 6(c)(i) is again on PMLA…See total weightage of PMLA is 9 marks. 10% of
total paper. But it is based on understanding of rank of Asst. Director. Whereas question no. 6(c)(ii) is related to IBC. It is on the committee of creditors and provisions relating to it. Remember provision of IBC relating to appointment or replacement of IRP shall be approved by 66% of voting shares of financial creditors. Earlier it was 75%. It has been amended last year.

I would like to place concluding remarks in following bullet points for students of November 2019 attempt and subsequent attempts:

• PMLA, IBC, SEBI Related topics are favoruite for the examiner
• One question from FCRA
• Most of questions related to application of small or cornered theoretical part
• Now, you cannot rely on 'director topic' only to clear exam with good marks
• Presenting answer to the point in clear and concise language is required. Students need writing practice to perform better in final examination.

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Strategic Financial Management (CA Final - New Course)

Analysis of Strategic Financial Management paper by Prof. Rahul Malkan:

• Mix of Some very new and some repeat questions
• Was Calculative and lengthy as compared to previous 2 attempts
• Mostly all questions were based on fundamental concepts
• Overall lengthy - but exemption was on the table

Note :
Question 1 - Compulsory
Question 2 to 6 - Any 4 questions

Chapter wise Marks Distribution

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Direct Tax Laws and International Taxation (CA Final - New Course)

Dissection of CA Final (new syllabus) - Paper 7 - Direct Tax Laws and International Taxation, May 2019 attempt

Kind Attention: Students of CA (Final) appearing in NOV 2019 / MAY 2020

The objective of this article is two-fold namely;

This question paper was divided into two parts: Part I comprised Multiple Choice Questions (MCQs) while Part II comprises questions which requires descriptive type answers. Under Part II there were 6 questions of which Question No. 1 was compulsory and another 4 to be attempted out of remaining 5 questions. Each question was of 14 Marks.

Now let me present the overall analysis of 84 marks (including 1 optional question)

Overall Analysis

Kindly go through following tabular summary of complete dissection of the question paper focusing on Tricky / Difficult adjustments and the apparent error (s) in the question paper.

Complete dissection of question paper

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Advanced Auditing & Professional Ethics (CA Final - New Course)

Hello everyone! As a professor it’s very important to understand what material is being used for draftingpapers, understand the trend so that I can make students hit bulls’ eye. So we worked for many hours to give you accurate and path breaking analysis. So, this time ICAI has drafted tricky paper asmajority of the questions were new. This in contrast to old course where majority questions were from PM, Past Papers, RTPs & MTPs. These new questions were not very difficult, but point is students who relied just on past papers etc would find this paper challenging. But if you are good in conceptual knowledge, covered majority of concepts then paper wont pose big challenge.

You will be surprised to see many of below facts. (Paper was of 119 marks of which 30 were covered by MCQs, So we have around 89 Marks of descriptive questions)

Coverage of Various Topics

1. Other Chapters had the majority weightage of around 39 Marks. (43%)
2. Standards on Auditing covered 23 Marks. (26%)
3. Professional Ethics covered14 Marks. (16%)
4. Company Audit covered13 Marks. (15%)

Source of Paper

(Don’t add up below marks there is overlapping of the source)

1. PM contributed to 27 Marks of the paper.(30%)
2. If we consider the recent past papers, it contributes around 26 Marks. (29%, 5 Years)
3. Considering the MTPs/RTPs, they contribute to around 22 Marks of the paper.(24%, 2 Years)
4. Around 54 Marks of the paper constituted of new questions which were not covered in the PM, Past papers or MTPs/RTPs. Such questions required conceptual clarity. Therefore, it is very important for the students to understand that depending solely on the question bank would not suffice.(60%)

Strategy

1. Company Audit & PE together contributed to nearly 27 Marks, so students should have a good hold on the said areas.
2. Descriptive & MCQs combined coverage of SAs is also good, it’s worth to spend more time on them.Also, to solve these questions, a good hold on the concepts is required.
3. There were some direct questions asked from the other chapters & hence was the easy scoring area.
4. Because of whooping 30 marks MCQs, importance conceptual clarity and coverage all concepts has increased manifold.
5. A comprehensive coverage of the syllabus is the need of the hour.

Curious Questions

Q2(b) - New Question from consolidation chapter, asked first time in exams, related to non-consolidation of subsidiary, where students were supposed to draft audit report. It was asked in May 18 RTP then Nov 18 RTP and then it came in May 19 Exams. So studying RTPs is very important

Q3(a) - Question on composition of board in corporate governance. Asked in exams first time, generally such questions were expected in law. But it was covered in study material.

Q3(c) -  This question was from professional ethics. Students has to answer 2 things, first it is allowed to become advisor to issue and second it is not allowed to do underwriting.

Q4(a) - Now this question was on assessment & evaluation of control environment. Control environment is very famous term in SA 315. Question was not on what do you mean by control environment, it was on evaluation of control environment but answer in icai study material is not as per SA 315

Q4(b) - Case study on disqualification of auditor. Business relationship with company is disqualification but there are exemptions. This case is covered in exemption. (Hotel)

Q6(a) - Exemption from cost audit. Exports accounted for only 70%, for exemption it should have been exceeding 75%.

Q6(c) - CA Sant is a CA having COP, but he was neither partner nor employee of CA Pant. Hence CA Pant is guilty of misconduct as per Clause (1) of Part I of First Schedule to the Chartered Accountants Act 1949.

ANALYSIS ON THE BASIS OF MARKS DISTRIBUTION:

ANALYSIS ON THE BASIS OF DIFFICULTY:

Analysis and Suggested Answers of CA Final Audit (New Course) May 19 Exams by CA Ravi Taori

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Stay tuned to check the analysis of the other subjects.