Lesotho Institute of Accountants Syllabus Issue date: May 2017 Status: Draft. Version
Table of contents 1 Overview... 4 1.1 Purpose... 4 1.2 Outline syllabus, rationale and key benefits... 4 1. Stages... 6 1.4 Technician Accounting stage... 7 1.5 General Accounting stage... 8 1.6 Chartered Accounting stage... 9 1.7 Assessments... 11 1.8 Development of technical competence in a regulatory environment... 11 1.9 Integration of business and professional ethics... 12 1.10 Pass marks and progression... 12 2 Module specifications aims, competencies, and content... 1 2.1 Technician Accounting stage... 1 2.2 General Accounting stage... 1 2. Chartered Accounting stage... 45 Appendices... 77 Page of 87
1 Overview 1. The syllabus aims to support the development of competent professionals capable of accepting the accounting and related responsibilities that business, government and regulatory authorities might demand of them. It seeks to develop the skills of accounting professionals in a measured way that reflects the values of public interest and a wider concern for the reputation and standards of a professional institute. 2. The syllabus is suited to those students working or seeking to work in the public or private sector, and in business and commerce. It facilitates advanced standing from candidates who qualify from recognised universities and meets the requirements of international bodies (IFAC), and international accounting and auditing standards.. The syllabus is comparable with modern standards employed by leading institutes across the world and reflects important characteristics of, and is designed to meet, specific business and government needs of Lesotho. 1.1 Purpose 4. The professional qualification begins with an expression of purpose which is a statement of the skills and competencies that define what is meant by being a professional accountant in Lesotho and which fits with national and international objectives. The Professional accountant as a well-rounded advisor that: Contributes real value in management of all types of organisations. Acts in the public interest as well as that of their employer or client. Delivers competences that include sound knowledge and higher value technical skills expected of accounting and finance professionals. Delivers their technical knowledge and skills in a practical and relevant way. Delivers skills in the private, and public sectors through a deep understanding of their issues and environments. 5. The remainder of this document outlines a robust syllabus that meet with this purpose and are set within the modern accounting profession. 1.2 Outline syllabus, rationale and key benefits 6. In outline, the proposed qualification has two elements to it: a -tier syllabus/examination structure (hereafter, syllabus structure) and an additional work experience requirement. The syllabus structure is outlined as: Page 4 of 87
Technician Accounting Stage The LIA syllabus structure General Accounting Stage Chartered Accounting Stage T1 Principles of Accounting T2 Costing T Budgeting and Information T4 Financial Accounting T5 Tax and Law T6 Audit and Assurance Progression requirement: T1,T2 and T must first be passed, attempted or credited before any of T4, T5 or T6 are attempted. All of the Technician Accounting Stage examinations to be passed or credited (T1- T6) before embarking on the General Accounting Stage programme of study.plus: G1 Management Accounting G2 Financial Management G Business and Organisational Environment G4 Financial Reporting All of the General Accounting Stage examinations to be passed or credited (G1-G4) before embarking on the Chartered Accounting programme of study.plus: Compulsory modules for all students: C1 Strategy C2 Strategic Financial Management C Governance and Ethics Compulsory modules must be passed before embarking on the Chartered Accounting stage optional modules. Choose one of the following routes: Private Practice Route C4 Advanced Taxation C5 Advanced Financial Reporting C6 Advanced Audit and Assurance in the Private Sector Public Sector Route C7 Public Sector Finance and Tax C8 Public Sector Financial Reporting C9 Advanced Audit and Assurance in the Public Sector Page 5 of 87
7. To be qualified as a member of LIA all elements of the qualification must be satisfied: that is, examinations must be passed and evidence of acceptable work experience is provided. The detail of the work experience framework is the subject of a different document. 8. The underlined modules contain mostly local content. All other modules are contextualised for Lesotho but are based on international content. 9. The rationale for the syllabus structure is to: Achieve the expression of purpose Create a clear link between syllabus content and learning materials. Clearly identify how student s progress from one stage of the qualification to the next which is measured in terms of skills acquired and competencies achieved via learning outcomes. Enable students to progress from appropriately designed and credited university degrees to the PQ (IES1). Adhere with IES2,, 4, 5 and 6 (technical competence, skills, ethics, the ability to integrate relevant technical and ethical skills with appropriate practical experience, and evaluated by appropriate and meaningful assessments). Position students for lifelong professional development: IES7 (CPD). Ensure that it is sufficiently benchmarked with international qualifications to grant a degree of mutual recognition with other country s professional qualifications. Provide detail which is sufficiently localised to ensure that its members skills are relevant to the Lesotho economy and environment. 1. Stages 10. The stages in the qualification (Technician, General, and Chartered) reflect the inherent difficulty of the subject matter in the modules and the requirements of progression to achieve professional competency that meets with the purpose of the qualification. At the lowest stage tasks in an exam will provide straightforward and structured data and information. At the next stage tasks will have straightforward but more complex data and information set in a more practical context. At the final stage, there will be scenarios that are more professionally challenging asking for development of professional advice. 11. In a competency based framework these tasks are expressed in terms of skills achievement of students. Skill achievement is developed into learning outcomes that specifically identify for students what they need to do in detail in order to demonstrate that a skill has been acquired. These learning outcomes are then reflected in assessments to ensure that students evidence their acquisition of skills. Stages and learning outcomes Learning outcomes are expressed in terms of tasks that use verbs such as identify, explain, calculate, analyse, evaluate and advise to specify the skill that has to be demonstrated. Modern accounting qualifications use a hierarchy of verbs which Page 6 of 87
recognise that students begin the learning process by being able to undertake the simpler tasks, as expressed in verbs such as identify and explain, moving on to more difficult tasks such as calculate and analyse, and ending-up with the higher stage tasks of evaluate and advise. This approach has long been used in modern accounting qualifications and is based, in one form or another, on Bloom s taxonomy of verbs. This approach is in accordance with IES2, appendix 1. IES2 describes what is involved in terms of proficiency levels which demarcates skills between different stages of modern accounting qualifications. 1.4 Technician Accounting stage 12. The Technician Accounting stage provides a framework for learning which contains core skills that prepare students for advanced study. The Technician Accounting stage is also a recognised qualification and an exit point, if desired, from the professional qualification.further details of the subjects are shown in a table below: T1 Principles of Accounting Outline content: Accounting is dealt with here primarily as a skill that supports the compilation of reliable financial accounts for sole traders and partnerships. At this level accounting includes knowledge of the essential framework of assumptions that underpin reliable reporting. Progression to: T4 Financial Accounting T2 Costing Outline content: costing is introduced at an early stage to reflect its importance as an essential management information tool to all organisations. It deals with the essentials of costing, including the gathering and recording of information for both direct and indirect costs and the processes by which costs and revenues may be estimated. T T4 Budgeting and Information Financial Accounting Progression to: G1 Management Accounting Outline content: modern accounting professionals must be equipped with sound practical knowledge on how to extract information from organisational systems and to use that information to support the creation of accounting and management information. Students will be expected to be able to demonstrate how to accurately code both income and expenditure. Students will also be expected to demonstrate a sound grasp of how to use computerised information systems. Progression to: G1 Management Accounting and G Business and Organisational Environment Progression from: T1 Principles of Accounting Outline content: on completing this module, candidates will understand the role, function and principles of financial accounting, explain aspects of professional and ethical behaviour, and be able to apply the rules of double entry bookkeeping. They will also develop the ability to prepare, analyse and report on financial statements for a variety of reporting entities in accordance with current generally accepted accounting principles in Lesotho and International Financial Reporting Standards (IFRSs). Progression to: G4 Financial Reporting T5 Tax and Law Outline content: Students are introduced the taxation framework in Lesotho and to the Page 7 of 87
T6 Audit and Assurance basics of income tax and VAT computations. This is contextualised in an ethical framework and students go onto study the impact of civul law on business and professional services. Progression to: core foundation knowledge thematic to the qualification and progression to C4 Advanced Taxation and C7 Public Sector Finance and Tax Outline content: the module provides candidates with the necessary knowledge and skills to perform internal and external auditing activities. It focuses on both the theoretical and practical aspects of auditing and is designed to ensure that candidates are able to conduct audit work and prepare high quality audit documentation. The module is based on the requirements of the International Standards on Auditing. Progression to: C6 Advanced Audit and Assurance in the Private Sector and C9 Advanced Audit and Assurance in the Public Sector. 1.5 General Accounting stage 1. The General Accounting stage qualification is made up of all of the T1-T6 modules of the Technician Stage qualification plus four further modules which develop important subject matter in management accounting, financial management, business and organisation environment, and financial reporting. G1 G2 G Management Accounting Financial Management Business and Organisational Environment Progression from: T2 Costing and T Budgeting and Information Outline content: The aim of this module is to ensure that students develop a knowledge and understanding of the various budgeting and cost accounting principles, concepts and techniques appropriate for planning, decisionmaking and control, and the ability to apply these techniques in the generation of management accounting reports. Progression to: C1 Strategy and C2 Strategic Financial Management Progression from: new topic Outline content: The aim of this module is to ensure that candidates develop a critical understanding of the nature and scope of financial management. They should be able to assess organisational funding requirements, calculate the cost of the available sources of finance, manage working capital, apply business valuation techniques and advise on the optimum financing structure for an entity. Progression to: C2 Strategic Financial Management Progression from: T Budgeting and Information Outline content: The aim of this module is to ensure that students develop skills that are of importance in modern organisations in the areas of performance management, procurement and commissioning, project management, quality control and systems implementation. Progression to: C1 Strategy and C Corporate Governance, Public Policy and Ethics G4 Financial Progression from: T4 Financial Accounting Page 8 of 87
Reporting Outline content: In this module, accounting from the Technician stage is developed in the context of more complex events and transactions with a greater emphasis on compliance with regulations including local and International Accounting Standards and generally accepted accounting practices. Students will be expected to demonstrate an understanding of and competence in financial statement analysis and analysis of choices in accounting treatments. Progression to: C5 Advanced Financial Reporting and C7 Public Sector Financial Reporting 1.6 Chartered Accounting stage 14. The Chartered Accounting stage positions students to meet the requirements of a professional accountant with knowledge and competencies recognisable across the world. The focus of the modules that comprise this stage is to develop the skills of students to the point where they can make competent professional judgements and evaluations arising from an analysis of complex situations. Students will be able to demonstrate analytical capabilities that require the linking of knowledge components, recognising alternatives, and identifying problems and issues that are not immediately apparent but which nonetheless require resolution. In arriving at informed evaluations, students will then be able to draw conclusions and advise clients in an effective manner. An important feature of this programme of study is that it allows students to concentrate their efforts on modules that are directly relevant to their careers with optional routes in private practice or public sector. 15. The General Accounting stage is comprised of compulsory modules C1, C2 and C. Students must choose one of two routes and take all modules within a route: Private Practice route modules: modules C4, C5, C6 Public Sector route modules: modules C7, C8, C9 C1 Strategy Progression from: G2 Financial Management; G1 Management Accounting Outline content: Strategic business analysis enables students to understand and apply tools and models to support the development and implementation of organisational strategies and to develop skills in strategic analysis, choice and implementation. Students will become competent in the use of management information to measure and monitor strategic performance. Evaluating complex scenarios will be a feature of the module, based on complex data, financial and stakeholder analysis including making recommendations. C2 Strategic Financial Management Progression from: G2 Financial Management Outline content: Advanced Financial Management requires students to place into context finance with broader strategic aims. It looks at both financing and investment opportunities and allies it to a risk management framework that is essential for modern organisations. The module then considers the global context of business. C Corporate Progression from: T5 Tax, Law and Governance Page 9 of 87
C4 C5 C6 C7 C8 Governance, Public Policy and Ethics Advanced taxation Advanced Financial Reporting Advanced Audit and Assurance in the Private Sector Public Sector Finance and Tax Public Sector Financial Reporting Outline content: This module is designed to provide candidates with a sound working knowledge of the main policy stakeholders and processes within the Lesotho public service. A comprehensive review will be undertaken of good governance practice within both public and private sectors, all developed within applicable ethical frameworks. Progression from: T5 Tax, Law and Governance Outline content: The Advanced Taxation module develops further aspects of tax related competencies will allow students to ensure tax compliance and identify opportunities for tax planning, where appropriate. Both Lesotho and further international dimensions of taxation will be considered with skills being developed from analysis and evaluation of complex scenarios. Students will be able to demonstrate skills of communication by conveying appropriate levels of advice to a wide range of clients, all applied to a high ethical standard. Progression from: G4 Financial Reporting Outline content: This module extends student knowledge of generally accepted accounting practices, deepens their understanding of financial reporting requirements and extends their competencies to apply Advanced accounting practices to complex situations. Students will be able to critically evaluate accounting alternatives, ensure compliance with generally accepted standards, and understand how reporting alternatives affect the results, financial position and risks disclosed by entities. Reporting extends student competencies to understanding organisation sustainability, corporate social responsibility reports and other financial reporting activities such as management commentaries. Progression from: T6 Audit and Assurance Outline content: This module, in the context of both the private and public sectors, extends student knowledge of International Standards on Auditing and other regulatory requirements. Important issues of practice and engagement management will be dealt with which will enable students to provide advice on a wide range of audit and assurance assignments. Engagement planning, execution, and reporting remain the focus of the module and a deep engagement with ethical issues and appropriate behaviour will inform much of the development of student abilities as they apply their skills to a variety of complex audit and assurance problems. Progression from: C4 Advanced Taxation and C7 Public Sector Finance and Tax Outline content: The aims of this module are to develop the candidate s knowledge of public expenditure and the sources of revenue for public service organisations, and to ensure that students develop the knowledge and skills relating to the tax system within Lesotho as applicable to individuals and companies. After studying this subject, candidates should be able to discuss public expenditure and revenue, and describe tax liabilities and explain the basis of their calculations. Progression from: G4 Financial Reporting Outline content: This module is designed to provide candidates with the technical knowledge and skills required to perform financial reporting responsibilities within the public sector. The module takes the candidate Page 10 of 87
C9 Advanced Audit and Assurance in the Public Sector through the key financial reporting standards of the International Public Sector Accounting Standards (IPSAS), the processes required for the preparation of financial statements, and aspects of non-statutory performance reporting within the public sector. Progression from: T6: Audit and Assurance Outline content: The aim of this module is to develop high level knowledge, application and evaluation skills in the conduct of audits in the public sector, paying particular attention to the broad scope of activities of auditors in the public sector. The three areas of audit activity are identified in terms of performance, compliance and financial audits. There is a particular focus on key issues within the public sector including the governance and management of large scale projects. 1.7 Assessments 16. The syllabus is designed to support are valid and reliable assessment approach. This will support the competency framework set out and will ensure that assessments are in accordance with IES6: Assessment and Exams. For the student, a clear link between learning and achievement demonstrated in the examinations of the Institute will ensure that the process of qualifying as an accountant is as transparent as possible. 17. Assessment levels: Questions at the Technician Accounting stage are most likely to provide students with information and relatively simple limited scenario content that they can use as a basis to calculate, compile and prepare responses to specific requirements or as a basis for stating and explaining their knowledge. Questions at the General Accounting stage are most likely to provide students with relatively straightforward but realistic scenarios and supporting information asking them to prepare more technically complex outputs that are more focused on client requirements. Questions at the Chartered Accounting stage will almost always begin with a scenario that is more challenging in terms of its business or other complexity with requirements that will be reported to a third party or supervisor that require analysis, critical comment, evaluation of alternatives and effective articulation. Often requirements will allow for higher level skills of evaluation, synthesis and judgement. Some requirements may contain issues that are not immediately apparent. 1.8 Development of technical competence in a regulatory environment 18. This syllabus contains detailed specifications of the extent and depth of knowledge required of laws, regulations, codes and standards within relevant subjects. These specifications are updated annually as changes take place in the regulatory environment so that students know Page 11 of 87
exactly what is and is not examinable. 19. Major periodic reviews will be undertaken to ensure sustained relevance and the extent of these will depend on a wider set of factors including, but not restricted to, substantial changes in the economic or regulatory environment, revised stakeholder requirements, and planned strategic developments in the professional qualification. 1.9 Integration of business and professional ethics 20. Elements of professional ethics are included in the syllabus throughout the qualification and, specifically, in a number of modules, as identified in the detailed syllabus. 1.10 Pass marks and progression 21. All papers shall be marked out of 100. To pass any paper, a candidate must obtain at least 50%. 22. The progression through the qualification is indicated in the detail of the syllabus content and are subject to exemptions granted. Page 12 of 87
2 Module specifications aims, competencies, and content 2.1 Technician Accounting stage T1 Principles of Accounting 2. The aim of this module is to ensure that students acquire knowledge that will help them to record transactions and events, make appropriate adjustments to accounting records, prepare noncomplex financial statements and understand the context of accounting in the private and public sector. 24. On completion of this module, candidates will reach a competency sufficient to be able to: (A) process documents relating to goods and services sold, (B) process receipts (C) record supplier transactions, (D) process payments to suppliers, employees and sundry claims (E) balance bank transactions and perform reconciliations, (F) prepare ledger balances and control accounts and perform reconciliations, (G) draft a trial balance, (H) maintain records relating to the acquisition and disposal of capital items, (I) collate and prepare information for the preparation of final accounts, (J) prepare the final accounts of sole traders and partnerships, (K) demonstrate an understanding of the role of accountancy in business. In the assessment, candidates may be required to: (A) Process documents relating to goods and services sold Accurately prepare invoices and credit notes and check against source documents Ensure invoices and credit notes are correctly authorised before being sent to customers Ensure invoices and credit notes are correctly coded Enter invoices and credit notes into books of prime entry Enter invoices and credit notes in the appropriate ledgers Produce statements of account for despatch to debtors Use relevant information from aged debtors analysis to deal with customers regarding overdue accounts (B) Process receipts Check receipts (cash, cheques, automated payment) against relevant supporting Page 1 of 87
information Enter receipts in appropriate accounting records such as: manual cash book manual main ledger and subsidiary ledger computerised records Prepare paying-in documents and reconcile to relevant records Identify unusual features (wrongly completed cheques, out-of-date cheques, credit and debit card limits exceeded, disagreement with supporting documentation, etc.) and resolve any problems identified (C) Record supplier transactions Check suppliers invoices and credit notes against relevant documents for validity such as: orders suppliers invoices delivery notes credit notes books of prime entry: manual purchases day book manual purchases returns day book relevant computerised records Check calculations on suppliers invoices and credit notes for accuracy on pricing Value Added Tax (VAT) discounts manual main ledger computerised ledgers Identify and deduct available discounts Correctly code invoices and credit notes Correctly enter invoices and credit notes into books of prime entry Enter invoices and credit notes in the appropriate ledgers Identify discrepancies and either resolve or identify an appropriate course of action (D) Process payments to suppliers, employees and sundry claims Calculate payments (payroll, creditors, petty cash etc.) from relevant documentation such as petty cash claims suppliers statements Page 14 of 87
payslips cheque requisitions Schedule payments and obtain authorisation Enter payments into accounting records such as manual cash book manual petty cash book manual main ledger computerised records Identify queries and resolve or identify an appropriate course of action unauthorised claims for payment insufficient supporting evidence claims exceeding authorised limit Ensure security and confidentiality is maintained (E) Balance bank transactions and perform reconciliations Record details from the relevant primary documentation in the cashbook and ledgers such as: credit transfers standing order and direct debit schedules bank statements Correctly calculate totals and balances of receipts and payments Compare individual items on the bank statement and in the cashbook for accuracy Identify discrepancies and prepare a bank reconciliation statement (F) Prepare ledger balances and control accounts and perform reconciliations Make and record authorised adjustments Total relevant accounts in the main ledger Reconcile control accounts (sales ledger, purchase ledger, non-trade debtors, etc.) with the totals of the balance in the subsidiary ledger Reconcile petty cash control account with cash in hand and subsidiary records Identify discrepancies arising from the reconciliation of control and other accounts and resolve or identify an appropriate course of action (G) Draft an initial trial balance Prepare the draft initial trial balance Identify discrepancies in the balancing process such as: incorrect double entries Page 15 of 87
missing entries and wrong calculations Identify reasons for imbalance and rectify them (adjusting errors, creating a suspense account) Balance the trial balance (H) Maintain records relating to capital acquisition and disposal Record relevant details relating to capital expenditure in the appropriate records such as: asset register books of original entry ledgers Ensure that the organisation s records agree with the physical presence of capital items Correctly identify and record all acquisition and disposal costs and revenues in the appropriate records Correctly calculate and record depreciation charges and other necessary entries and adjustments in the appropriate records Ensure that the records clearly show the prior authority for capital expenditure and disposal and the approved method of funding and disposal Correctly calculate and record the profit and loss on disposal in the appropriate records Ensure that capital records are accurately maintained (I) Collate and prepare information for the preparation of final accounts Correctly prepare reconciliations for the preparation of final accounts such as purchase ledger reconciliation sales ledger reconciliation closing stock reconciliation Identify any discrepancies in the reconciliation process and either take steps to rectify them Accurately prepare a trial balance and open a suspense account to record any imbalance such as incorrect double entries missing entries numerical inconsistencies and wrong calculations insufficient data and incomplete records have been provided inconsistencies within the data Establish the reasons for any imbalance and clear the suspense account by correcting the errors Correctly identify, calculate and record appropriate adjustments such as Page 16 of 87
prepayments and accruals provisions for doubtful debts provisions for depreciation closing stock Make the relevant journal entries to close off the revenue accounts in preparation for the transfer of balances to the final accounts (J) Prepare the final accounts of sole traders and partnerships Prepare final accounts of sole traders in proper form, from the trial balance Prepare final accounts of partnerships in proper form and in compliance with partnership agreement, from the trial balance (including transactions related to the introduction of new partners and partnership dissolution) Observe the organisation s policies, regulations, procedures and timescales in relation to preparing final accounts of sole traders and partnerships (K) Demonstrate an understanding of the role of accountancy in organisations Explain and describe the role of accounting practice in organisations, both public and private Required knowledge Accounting Standards The technical appendix details the depth of treatment of required knowledge and the progression of competence over the stages in the qualification. T2 Costing 25. The aim of this module is to ensure that students can record and analyse information relating to direct costs and revenues; be able to allocate, apportion and calculate overhead costs; and prepare and evaluate estimates of costs and revenues. 26. On completion of this module, candidates will reach a competency sufficient to be able to: (A) record and analyse information relating to direct costs and revenues, (B) record and analyse information relating to the allocation, apportionment and absorption of overhead costs, and (C) Prepare and evaluate estimates of costs and revenues. In the assessment, candidates may be required to: Page 17 of 87
(A) Record and analyse information relating to direct costs and revenues Identify direct costs such as: materials direct labour costs Record and analyse information relating to direct costs Calculate direct costs Check cost information for stocks against usage and stock control practices such as: raw materials part-finished goods finished goods (B) Record and analyse information relating to the allocation, apportionment and absorption of overhead costs Identify overhead costs in accordance with the organisation s procedures such as: fixed variable semi-variable Attribute overhead costs to production and service cost centres in accordance with agreed bases of allocation and apportionment such as: direct methods step down methods Calculate overhead absorption rates in accordance with agreed bases of absorption such as: labour hour methods machine hour methods Record and analyse information relating to overhead costs in accordance with the organisation s procedures Make adjustments for under and over recovered overhead costs in accordance with established procedures Review methods of allocation, apportionment and absorption at regular intervals in discussions with senior staff and ensure agreed changes to methods are implemented (C) Prepare and evaluate estimates of costs and revenues Identify information relevant to estimating current and future revenues and costs such as short term decisions break-even analysis Page 18 of 87
margin of safety target profit profit volume ratio limiting factors long term decisions: (D) Prepare, analyse and evaluate cash flow forecasts Prepare estimates of future income and costs Calculate the effects of variations in capacity on product costs Analyse critical factors affecting costs and revenues using appropriate accounting techniques and draw clear conclusions from the analysis State any assumptions used when evaluating future costs and revenues Identify and evaluate options and solutions for their contribution to organisational goals Present recommendations to appropriate people in a clear and concise way and supported by a clear rationale T Budget and Information 27. The aim of this module is to provide candidates with sound practical knowledge on how to extract information from organisational systems and to use that information to provide comparisons on costs and income. Students will be expected to be able to demonstrate how to accurately code both income and expenditure. Students will also be expected to demonstrate a sound grasp of how to use computerised information systems. 28. On completion of this module, candidates will reach a competency sufficient to be able to: (A) code and extract information (B) analyse costs and income, making comparisons where appropriate (C) Explain the most appropriate of the following budgeting approaches and methods, taking into account their advantages and disadvantages for planning, control and motivation (D) prepare cash budgets, or extracts therefrom, from information supplied; (E) explain how to use computer systems and software (F) identify and explain how to maintain the security of data. In the assessment, candidates may be required to: (A) Code and extract information Recognise appropriate cost centres and elements of costs such as: materials Page 19 of 87
labour expenses Extract income and expenditure details from the relevant sources such as: purchase orders purchase invoices sales orders sales invoices payroll code income and expenditure correctly addressing issues such as wrong codes Identify any problems in obtaining the necessary information, and suggest an appropriate course of action Identify and report errors (B) Analyse costs and income, making comparisons when appropriate Clarify information requirements with the appropriate person such as: costs income Compare information extracted from a particular source with actual results such as: previous period s data corresponding period s data forecast data ledgers Identify discrepancies Provide comparisons on costs and income in the required format (C) Explain the most appropriate of the following budgeting approaches and methods, taking into account their advantages and disadvantages for planning, control and motivation bottom-up and top down approaches to generating and managing budgets activity-based, responsibility-based and product-based budget structures (D) prepare cash budgets, or extracts therefrom, from information supplied; prepare and/or comment upon a cash budget for a business which highlights the quantity and timing of cash surpluses and deficits calculate the cash cycle for a business and recognise its significance; recognise how a business manages surpluses and deficits predicted in cash budgets. (E) Explain how to use computer systems and software Page 20 of 87
Perform initial visual safety checks and power up the computer system (PC and Networked system) such as visual safety checks: hardware components plugs cables interfaces Use passwords to gain access to the computer system where limitations on access to data is required Access, save and print data files and exit from relevant software Use appropriate file names and save work Back up work carried out on a computer system to suitable storage media at regular intervals Close down the computer without damaging the computer system Seek immediate assistance when difficulties occur such as hardware failure software failure corruption of data (F) Identify and explain how to maintain the security of data Ensure passwords are kept secret and changed at appropriate times Ensure computer hardware and program disks are kept securely located Identify potential risks (Corruption, Loss, Illegal copying) to data from different sources and take steps to resolve or minimise them such as internal external viruses poor storage facilities theft Maintain security and confidentiality of data at all times such as: backup copies secure storage Understand and implement relevant legal regulations where thy exist in Lesotho, such as: data protection legislation VDU regulations Page 21 of 87
health and safety document retention T4 Financial Accounting 29. The aim of this module is to ensure that candidates understand the role, function and principles of financial accounting, explain aspects of professional and ethical behaviour, and can apply the rules of double entry bookkeeping. They also develop the ability to prepare, analyse and report on financial statements for a variety of reporting entities in accordance with current generally accepted accounting principles in Lesotho and International Financial Reporting Standards (IFRSs). 0. On completion of this module, candidates will reach a competency sufficient to be able to: (A) Identify the users of financial accounts and explain their requirements; (B) Explain key aspects of professional and ethical behaviour (C) Describe organisational forms in terms of legal definitions and explain their economic environment they relate to accounting needs (D) Describe the impact of the International Accounting Standards Board s (IASB) Conceptual Framework for Financial Reporting (E) Prepare accounting records that meet the requirements of the Conceptual Framework for Financial Reporting (F) Prepare and present financial statements for sole traders, limited companies, partnerships and other organisations in accordance with IFRS; (G) Analyse and interpret financial statements: (H) Outline the content and coverage of International Public Sector Accounting Standards (IPSAS). 1. In the assessment, candidates may be required to: (A) Identify the users of financial accounts and explain their requirements Describe briefly the purpose and context of the accounting framework including structure and role of the accounting profession in society functions and benefits of accounting differences between financial and management accounting roles of the accountant, auditor and financial manager objectives of financial statements users of financial statements and their needs Page 22 of 87
(B) Explain key aspects of professional and ethical behaviour ethical requirements for an accountant as imposed by statute and professional bodies ethical threats in accounting and associated safeguards private and public sector accounting failures and their effects professional practice on ethics (C) Describe organisational forms in terms of legal definitions and explain their economic environment as they relate to accounting needs Describe briefly the activities, structure, legal form, and environment of typical private and public service organisations such as private companies local authorities central government organisations higher and further education organisations charities and voluntary organisations public private partnerships mutual and co-operative bodies (D) Describe the impact of the International Accounting Standards Board s (IASB) Conceptual Framework for Financial Reporting globalisation and the need for harmonised accounting standards the role of the IASB in setting standards and its impact on the various elements of financial statements underlying assumption and qualitative characteristics of financial statements recognition and measurement of income, expenditure, assets, liabilities and equity in financial statements (E) Prepare accounting records that meet the requirements of the Conceptual Framework for Financial Reporting Use double entry principles to maintain accounting records, including documenting events and record transactions at source using source documentation to update the records of prime entry posting of entries from records of prime entry to ledgers preparation and posting of journal entries covering those relating to the acquisition, revaluation, and disposal of non-current assets, depreciation, bad debts, accruals, prepayments, inventory, misstatements and omissions preparation of reconciliation statements covering bank reconciliations, suspense accounts, foreign exchange transactions and control account reconciliations preparation of statements accounting for the application of government grants Recognise the importance of the basic financial statement assertions to ensure the maintenance of proper accounting records: transactions, account balances, presentation and disclosure (F) Prepare and present financial statements for sole traders, limited companies, partnerships and other organisations in accordance, where appropriate, with IFRS Use the double entry principles and financial statement assertions in the process of preparing Page 2 of 87
simple financial statements for the following profit or loss account and other comprehensive income and statements of financial position for limited liability companies (for internal use) and sole traders profit or loss account and other comprehensive income and statements of financial position from incomplete records Prepare simple financial statements for the following income and expenditure accounts and statements of financial position for clubs and societies, charities, and partnerships statements of cash flows for limited companies (G) Analyse and interpret financial statements Calculate basic financial ratios and assess financial performance and position (H)Outline the content and coverage of International Public Sector Accounting Standards (IPSAS) T5 Tax and Law development, content and coverage of International Public Sector Accounting Standards (IPSAS) and their impact on financial accounting and reporting in the public sector 2. The aim of this module is to ensure that students develop an understanding of the basics of taxation in Lesotho (including simple computations) and of the various influences (especially legal, professional and ethical) governing the behaviour of organisations. 59. On completion of this module, candidates will reach a competency sufficient to be able to: (A) Describe the taxation framework within Lesotho (B) Calculate income tax liabilities and understand the related ethical matters (C) Calculate the VAT on taxable transactions and understand the related ethical matters (D) Explain the impact of civil law on business and professional services (E) Explain the implications of incorporation, including the roles of shareholders and directors, and the main implications of insolvency law (F) Explain the impact of criminal law on business and professional services (G) Explain the impact of employment law in the professional context. In an assessment, candidates may be required to: (A) Describe the taxation framework within Lesotho The history of taxation in Lesotho Benefits of taxation to society Tax principles and types of taxes Page 24 of 87
Identifying different types of taxpayer Completion of tax returns and consequences of withholding taxes Identifying and explaining different types of taxes such as; Income Tax, VAT, stamp duty, property tax, company tax Taxation with regard to commercial farming Definition of the concepts of tax evasion and avoidance Leases and taxation Customs duties Fringe benefits (B) Calculate income tax liabilities and understand the related ethical matters Identify all relevant forms of income and to prepare the income tax computations for an individual Identify capital gains transactions and calculate computations and liability Prepare the appropriate entries on tax returns for both income tax and capital gains Show awareness of professional ethics issues The computation of business tax Prepare the income tax computations for trades and professions Prepare corporation tax computations for individual companies Identify those transactions which have a capital gains impact Complete the appropriate entries on tax returns Demonstrate an understanding of accounts which form the basis for tax computations (C) Calculate the VAT on taxable transactions and understand the related ethical matters Identify traders requiring registration for VAT Define a taxable person; supply; time of supply and place of supply Identify the basis of valuation of supplies Identify different types of supplies Compute partial exemptions and annual adjustments Identify the VAT treatment of imports and exports Determine deductible input tax Identify the provisions relating to transfers of a going concern Explain the regime of penalties & interest on late payment and the implications of other irregularities for VAT Page 25 of 87
Show awareness of professional ethics issues (D) Explain the impact of civil law on business and professional services The nature of contractual agreements, the agency relationship and the consequences of negligence definition of contract and its elements when a legally binding contract exist between two parties and how a contract may be enforced the circumstances when a contract can be terminated and possible remedies for breach of contract the methods by which agency can be created, and the duties and rights of agents recognition of the authority an agent has to enter into contracts on behalf of a principal, including implied and apparent authority; and that given to partners under legislation instances and consequences of negligence (particularly negligent misstatement) instances and consequences of vicarious liability in a given scenario (E) Explain the implications of incorporation, including the roles of shareholders and directors, and the main implications of insolvency law types of shareholders and their roles differences between partnerships and companies the procedures required to form a registered company or a limited liability partnership, including any practical considerations, and the nature and contractual force of a company s memorandum and articles of association and the advantages and disadvantages of off-the-shelf companies in Lesotho the administrative consequences of incorporation or the formation of a limited liability partnership including requirements regarding statutory books, accounts, meetings and the role of the Company Secretary the procedures for the issue of shares, including issues at a premium and pre-emption rights capital maintenance including: reduction of capital, redemption and purchase of a company s own shares, financial assistance for the purchase of a company s own shares, distribution of profits share transfer requirements and disclosure requirements how a shareholder can influence the management of a company through meetings and resolutions, including shareholders rights to requisition a meeting statutory rights of shareholders to challenge the management of a company Page 26 of 87
the rights and duties which a member of a limited liability partnership possesses the ways in which a director may be appointed and removed directors duties, explaining the consequences of any major breach the powers of directors and in what circumstances they will bind the company in a contract with third parties the nature of fixed and floating charges and the procedures for registering them the nature and function of receivership, an administration order, a compulsory and a voluntary winding up (including relevance of secured debt) the main implications of insolvency law (F) Explain the impact of criminal law on business and professional services Instances of criminal behaviour that may be encountered by professional accountants and auditors Circumstances where an accountant will be protected from dismissal and victimisation if (s)he raises concerns about malpractice in the workplace Instances and consequences of fraud Instances and consequences of bribery Instances and consequences of money laundering and appropriate courses of action for a professional accountants and auditors in accordance with international and national regulations and law The relationships and interaction between legal principles, legislation, case law, ethics and ethical codes (G) Explain the impact of employment law in the professional context Key areas in which the law affects the role and work of the professional accountant employment law: who is an employee and the main legal consequences of employment status features of employment contracts and circumstances in which an employment contract may be terminated and the consequences arising wrongful dismissal and unfair dismissal T6 Audit and Assurance 4. This module is designed to provide the candidate with the necessary knowledge and skills to perform internal and external auditing activities. The module focuses on both the theoretical and practical aspects of auditing and is designed to assess the ability of candidates to conduct audit work and prepare high quality audit documentation. The learning outcomes are based on the requirements of the International Standards on Auditing. Page 27 of 87
5. On completion of this module, candidates will reach a competency sufficient to be able to: (A) Explain the scope and legal, regulatory, governance and ethical environment within which audits are performed (B) Explain the scope of internal and external audits (C) Describe the principles and explain the importance of quality control for an audit (D) Explain the planning of auditing and assurance engagements (E) Apply the techniques of auditing and assurance engagements (F) Explain the reporting on auditing and assurance engagements (G) Explain the role and application of audit techniques to the public sector in Lesotho; 6. In the assessment, candidates may be required to: (A) Explain the scope and legal, regulatory and ethical environment within which audits are performed General requirements relating to the provision of internal and external audit services Explain the role and responsibilities of an effective board and management structure within an organisation and the responsibility relationship to stakeholders Fair presentation and the nature of audit reports Auditor s rights and duties Auditor s liability including criminal liability and liability to third parties Impact of International Standards on Auditing (ISAs) on external audit work Public sector audit frameworks Explain the importance of ethical behaviour and the requirements of applicable standards Describe and explain IFAC Code of Ethics for Professional Accountants o o o o o o o General application of the code Introduction and fundamental principles Integrity Objectivity Professional Competence and due care Confidentiality Professional Behaviour (B) Explain the scope of internal and external audits: Basic tenets and concepts of internal and external audit work Power and authority available to internal and external auditors Page 28 of 87