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CERTIFIED PUBLIC ACCOUNTANTS (CPA)

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REVISED EXAMINATION SYLLABUS

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JULY 2021
 kasneb Towers, Hospital Road, Upper Hill
P.O. Box 41362 - 00100, Nairobi - Kenya
Tel: 254(020) 4923000
Cellphone: 0722-201214/0734-600624
E-mail: [email protected] Website: www.kasneb.or.ke

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All rights reserved. No part of this booklet may be reproduced, distributed,

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stored in a retrieval system or transmitted, in any form or by any means,
including photocopying, recording or other electronic, mechanical,
photocopying, recording or otherwise, without prior written permission of
Kasneb

JULY 2021
 FOREWORD
One of the cardinal objectives of any education system is to ultimately provide the economy
with competent, self-driven and morally upright human capital for sustainable growth and
prosperity. In order to effectively achieve this, it is important that the education system
continuously adapts to market dynamics at global, regional and national levels.
For professional examination bodies such as the Kenya Accountants and Secretaries National
Examinations Board (Kasneb), this translates to the need to regularly review their syllabuses
to match and, in an ideal setting, surpass market expectations. The drivers of syllabuses
change are wide and diverse and transcend various factors including economic, legal, social
and technological spheres.
It is in the above context that The National Treasury and Planning, as the parent Ministry of
Kasneb, is pleased to note the significant milestone in the completion of the major review
process for Kasneb, having also participated with other stakeholders in the review process.
This latest review has afforded Kasneb the opportunity to address emerging trends that define
the next generation of professionals, including data mining and analytics, digital competence,

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soft skills and a global perspective in strategic decision making.

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With the revised syllabuses, Kasneb is expected to continue playing a leading role in providing

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the economy with competent professionals in the areas of accounting, finance, governance

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and corporate secretarial practice, credit management, forensic investigations, information

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communication technology and related areas. This is further expected to boost the

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Government’s development agenda as defined under the Kenya Vision 2030 development

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blueprint and the Big Four Agenda.
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The successful implementation of the revised syllabuses will require the support of all
stakeholders. I wish therefore to urge for the continued support to Kasneb including from
various Government Ministries and Departments, regulatory bodies, employers, professional
institutes, universities and other training institutions, among others.
It is my conviction that the revised syllabuses will reshape the professional qualifications
frontier in the region and beyond and firmly place Kenya as one of the leading countries in the
provision of globally competitive professionals.

Dr Julius M. Muia, PhD, CBS

The Principal Secretary/The National Treasury
The National Treasury and Planning

August 2021

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

 PREFACE
Kasneb has been undertaking a major review of its examination syllabuses every five years
and a mid-term review every two and a half years. The prime focus of the just completed major
review was the need to produce enhanced, integrated and competence based curriculums
whose graduates will remain well positioned to meet the dynamic global market demands for
the next five years and beyond.
The major review process commenced in earnest in August 2019 with an intensive stakeholder
engagement across various counties in Kenya. This was supplemented by study visits and
surveys conducted in various parts of the globe, including in the USA, UK, Canada, Malaysia,
Singapore, Australia and India. Further engagements with employers, practitioners and the
market at large culminated in the development of a competence framework for the professional
qualifications of Kasneb. A competence framework is a structure that sets out and defines
each individual competency required by persons working in an organisation. The
framework defines the knowledge, skills and attributes needed for people within an
organization.
Complementing the competence framework were occupational standards developed for the

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vocational, certificate and diploma programmes. Similar to the competence frameworks for

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professionals, the occupational standards for various technician qualifications are statements

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of work performance reflecting the ability to successfully complete the functions required in an

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occupation, as well as the application of knowledge, skills and understanding in an occupation.

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With the development of the competence frameworks and occupational standards, the next

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logical step was the development of the detailed syllabuses content addressing the identified

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required competencies. The syllabuses content was developed by various subject matter
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experts drawn from both public and private sectors, industry and academia, employers and
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practitioners among others.
As noted above, stakeholder engagement formed a critical pillar in each step of the review
process. At the final stretch, stakeholders were invited to validate the syllabuses on Friday, 7
May 2021 during a national virtual conference. This paved the way for the launch of the
syllabuses on Friday, 23 July 2021.
As part of the new competence-based system, Kasneb will use various assessment modes
through a partnership model with other institutions to test the achievement of key
competencies and skills. Among other key areas of focus is the introduction of practical
experience and work-simulation, together with a requirement for students to attend workshops
where matters of ethics, values, attitudes and other soft skills will be developed.
The major review of the syllabuses also witnessed the expansion of the qualifications
spectrum for Kasneb to include four vocational courses, one certificate course, three diploma
courses, five professional courses and one post-professional specialisation course.
We are confident that the new qualifications of kasneb will address the current and emerging
skills requirements in the national, regional and international markets.
Finally, I wish to take this opportunity to thank all our partners and stakeholders for their
contribution in various ways to the successful completion of the major syllabuses review.
Dr Nancy N. Muriuki, PhD
Chairman of the Board of Kasneb
August 2021

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

 ACKNOWLEDGEMENT
I wish to take this opportunity to express our deepest appreciation to all our key stakeholders
who, through their expert advice, comments, other feedback and general support contributed
to the development of the revised syllabuses together with the supporting competence
frameworks and occupational standards.
We are particularly grateful to the Government of Kenya through the National Treasury and
Planning, the Ministry of Education, Ministry of Foreign Affairs incorporating various Kenyan
Embassies and High Commissions, among others; various regulatory bodies including the
Kenya National Qualifications Authority (KNQA), Technical and Vocational Education and
Training Authority (TVETA), Commission for University Education (CUE), Central Bank of
Kenya (CBK), Capital Markets Authority (CMA); professional bodies including the Institute of
Certified Public Accountants of Kenya (ICPAK), Institute of Certified Secretaries (ICS),
Institute of Certified Investment and Financial Analysts (ICIFA), Institute of Credit
Management Kenya (ICM-K), Law Society of Kenya (LSK) - Nairobi Chapter; Federation of
Kenya Employers (FKE) and individual employers; the Ethics and Anti-Corruption Commission
(EACC); practitioners, subject matter experts and trainers, various consultants engaged;
students, parents and guardians; past and present members of the Board, Committees and

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Sub-Committee; members of staff of Kasneb among other stakeholders.

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We also extend our appreciation to all foreign regulatory and professional bodies who

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facilitated the study visits and provided valuable insights on global trends and emerging issues

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in areas relevant to the examinations of Kasneb. In this connection, we wish to highlight the

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following institutions for special mention:

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1. United Kingdom (UK): Chartered Governance Institute; Chartered Institute of
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Management Accountants; Chartered Institute of Marketers; Institute of Chartered
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Accountants in England and Wales; Pearson Vue Limited.
2. United States of America (USA): American Institute of Certified Public Accountants;
Chartered Financial Analysts Institute; International Federation of Accountants;
Society for Corporate Governance.
3. Singapore and Malaysia: Chartered Secretaries Institute of Singapore; Malaysian
Association of Chartered Secretaries and Administrators; Malaysian Institute of
Accountants.
4. Canada: CPA Canada; Board of Canadian Registered Safety Professionals.
5. Australia: CPA Australia; Pearson Vue Australia.
6. India: Indira Gandhi National Open University; Institute of Chartered Accountants of
India; Institute of Company Secretaries of India, Institute of Cost Accountants of India.
7. South Africa: South Africa Institute of Chartered Accountants (SAICA).
Kasneb remains forever grateful to all our stakeholders for your role in ensuring the
development of quality and globally benchmarked syllabuses, competence frameworks and
occupational standards. We look forward to your continued support in the implementation of
the revised syllabuses.

Dr Nicholas K. Letting’, PhD, EBS

Secretary/Chief Executive Officer, Kasneb
August 2021

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

TABLE OF CONTENTS
Page
Foreword (i)
Preface (ii)
Acknowledgement (iii)
Background information (v)

FOUNDATION LEVEL

Paper No. 1 Financial Accounting 1

Paper No. 2 Communication Skills 4

Paper No. 3 Introduction to Law and Governance 7

Paper No. 4 Economics 12

Paper No. 5 Quantitative Analysis 17

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Paper No. 6 Information Communication Technology 20

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INTERMEDIATE LEVEL

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Paper No. 7 Company Law 23

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Paper No. 8 Financial Management 27

Paper No. 9 Financial Reporting and Analysis 31

Paper No. 10 Auditing and Assurance 34

Paper No. 11 Management Accounting 40

Paper No. 12 Public Finance and Taxation 43

ADVANCED LEVEL

Paper No. 13 Leadership and Management 48

Paper No. 14 Advanced Financial Reporting and Analysis 52

Paper No. 15 Advanced Financial Management 54

Paper No. 16 (S1) Advanced Taxation 59

Paper No. 16 (S2) Advanced Auditing and Assurance 62

Paper No. 16 (S3) Advanced Management Accounting 65

Paper No. 16 (S4) Advanced Public Financial Management 67

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

BACKGROUND INFORMATION ABOUT kasneb
1.1 Legal Foundation and Status of kasneb
kasneb was established as a state corporation under the National Treasury by the
Government of Kenya on 24 July 1969. The establishment and operations of kasneb
are governed by the following main Acts:
(a) The Accountants Act, No. 15 of 2008 (which repealed the Accountants Act, Cap
531 of 1977).

(b) The Certified Public Secretaries of Kenya Act, Cap 534 of 1988.

(c) The Investment and Financial Analysts Act, No. 13 of 2015.

1.2 Functions of kasneb

Section 17(1) of the Accountants Act, 2008 of the Laws of Kenya defines the functions
of kasneb. These functions are:
(a) To prepare syllabuses for professional, diploma and certificate examinations in
accountancy, company secretarial practice and related disciplines;
(b) To make rules with respect to such examinations;

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(c) To arrange and conduct examinations and issue certificates to candidates who

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have satisfied examination requirements;

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(d) To promote recognition of its examinations in foreign countries;

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(e) To investigate and determine cases involving indiscipline by students

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registered with the Examinations Board;

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(f) To promote and carry out research relating to its examinations;

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(g) To promote the publication of books and other materials relevant to its

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examinations;
(h) To liaise with the Ministry of Education, Science and Technology in
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accreditation of institutions offering training in subjects examinable by the
Examinations Board, and
(i) To do anything incidental or conducive to the performance of any of the
preceding functions.
1.3 Professional Institutes/Registration Board for Kasneb graduates
1.3.1 Institute of Certified Public Accountants of Kenya (ICPAK)
ICPAK is established under Section 3 of the Accountants Act, 2008. One of
the functions of ICPAK is to advise kasneb on matters relating to examination
standards and policies. The Act also makes provisions for the establishment
of a Registration and Quality Assurance Committee (Registration Committee)
under Section 13. One of the functions of the Registration Committee is to
register eligible persons as Certified Public Accountants.
1.3.2 Institute of Certified Secretaries (ICS)
ICS is established under Section 3 of the Certified Public Secretaries of
Kenya Act (Cap. 534) of the Laws of Kenya. One of the functions of ICS is to
advise kasneb on matters relating to examination standards and policies.
1.3.3 Registration of Certified Public Secretaries Board (RCPSB)
RCPSB is established under Section 11 of the Certified Public Secretaries of
Kenya Act (Cap. 534) of the Laws of Kenya. One of the functions of RCPSB
is to register eligible persons as Certified Secretaries.

1.3.4 Institute of Certified Investment and Financial Analysts (ICIFA)

ICIFA is registered under the Investment and Financial Analysts Act, No. 13
of 2015 of the Laws of Kenya. One of the functions of ICIFA is to advise
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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

 kasneb on matters relating to examination standards and policies. The Act
also makes provisions for the establishment of a Registration Committee
under Section 13. One of the functions of the Registration Committee is to
register eligible persons as Certified Investment and Financial Analysts.
1.3.5 Institute of Credit Management Kenya [ICM (K)]
ICM (K) is registered under the Societies Act, (Cap.108) of the Laws of
Kenya.
1.4 Vision, Mission, Mandate and Core Values
The vision, mission, mandate and core values of kasneb are as follows:
1.4.1 Vision
Global leader in examination and certification of business professionals.
1.4.2 Mission
Empowering professionals globally by offering quality examinations and
undertaking research and innovation.
1.4.3 Mandate
The mandate of kasneb is the development of syllabuses; conduct of

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professional, diploma and certificate examinations and certification of

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candidates in accountancy, finance, credit, governance and management,

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information technology and related disciplines; promotion of its qualifications

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nationally, regionally and internationally and the accreditation of relevant

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training institutions in liaison with the ministry in charge of education.

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1.4.4 Core Values

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• Integrity
• Professionalism w.
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• Customer focus
• Teamwork
• Innovativeness

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

2.0 EXAMINATIONS OF kasneb
kasneb currently offers the following examinations:
(a) Vocational certificate courses
These are short-term, skills-based programmes currently in the areas of
entrepreneurship and innovation, graphic design, information and cyber security and
block chain technology. The courses are ideal both for fresh high school graduates and
established professionals in various areas willing to diversify their knowledge and
competencies in the above areas.
The vocational certificate courses are administered in two levels, with each level
requiring an average of three months, thus a total of six months.
Entrants with high school certificates will start with Level I which covers basic skills.
Other entrants with post-high school qualifications covering the basic skills will enter at
Level II.
The minimum entry for the vocational certificates is a KCSE certificate. The courses
can be pursued through a tuition-based programme or privately. Tuition-based
programmes (physical or virtual classes) are however recommended due to the
interactiveness with facilitators and other students which are key in imparting the

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requisite technical and soft skills.

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The examinations will be administered primarily on a computer-based platform.

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The details on each of the vocational programmes are summarised below:

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(i) Vocational Certificate in Entrepreneurship and Innovation

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The course imparts basic knowledge, skills, values and attitudes to apply

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entrepreneurship skills and generate innovative ideas to start and manage
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a new business or grow an existing entity. ww
(ii) Vocational Certificate in Graphic Design
The course imparts basic knowledge, skills, values and attitudes to
generate and enhance graphic designs according to set specifications.
(iii) Vocational Certificate in Information and Cyber Security
The course imparts basic knowledge, skills, values and attitudes to identify
information and cyber threats and risks and implement programmes to
protect information and databases.
(iv) Vocational Certificate in Blockchain Technology
The course imparts knowledge, skills, values and attitudes to develop a
simple blockchain program and undertake blockchain transactions.
(b) Certificate in Accounting and Management Skills (CAMS) course
The course imparts knowledge, skills, values and attitudes to prepare basic accounts
and financial statements for a small enterprise or non-complex environment and apply
basic management and marketing skills in business.
The course is mainly for persons who wish to qualify and work as entry level accounting
and management personnel.
The CAMS course is administered in two levels, with each level requiring an average of
six months, thus a total of one year.
The minimum entry requirement is KCSE mean grade D or a vocational certificate.
The course is fully tuition based with requirements for students to sit for continuous
assessment tests (CATs), which constitute 15% of the final score for assessment
purposes.
The examinations will be administered primarily on a computer-based platform.
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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

(c) Diploma Courses
Kasneb currently administers three diploma programmes; Accounting Technicians
Diploma (ATD), Diploma in Data Management and Analytics (DDMA) and Diploma in
Computer Networks and Systems Administration (DCNSA).
The diploma courses are administered in two levels, with each level requiring an average
of one year, thus a total of two years.
The minimum entry for the diploma courses is KCSE mean grade C-. Persons with
certificate and other higher qualifications from recognised institutions are also eligible for
entry. The courses can currently be pursued through a tuition-based programme or
privately. Tuition-based programmes (physical or virtual classes) are however
recommended due to the interactiveness with facilitators and other students which are
key in imparting the requisite technical and soft skills.
A summary on each of the diploma programmes is presented below:
(i) Accounting Technicians Diploma (ATD) course
The course imparts knowledge, skills, values and attitudes to prepare financial and
management accounts and financial statements for small and medium sized
enterprises and compute basic taxes for a business.

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The course is aimed at persons who wish to qualify and work as middle level

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accountants providing technical support to professional accountants, auditors, tax

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practitioners and related areas.

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(ii) Diploma in Data Management and Analytics (DDMA) course

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The course imparts knowledge, skills, values and attitudes to undertake non-complex

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design of databases, mine and analyse data for decision making.

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The DDMA will be administered on a computer-based platform. ww
(iii) Diploma in Computer Networks and Systems Administration (DCNSA) course
The course imparts knowledge, skills, values and attitudes to design, configure, test
and secure and manage non-complex networks.
The DCNSA will be administered on a computer based platform.
(d) Professional Courses
Kasneb currently administers five professional courses, as summarised below:
(i) Certified Public Accountants (CPA)
(ii) Certified Secretaries (CS)
(iii) Certified Investment and Financial Analysts (CIFA)
(iv) Certified Credit Professionals (CCP)
(v) Certified Information Systems Solutions Expert (CISSE)
The professional courses are administered at Foundation, Intermediate and Advanced
Levels. Each level requires an average of one year, though candidates are advised to
provide for an additional one year to meet requirements for internship/practical
experience
The minimum entry requirement for the professional courses is KCSE mean grade C+.
Persons with diplomas or other higher-level qualifications from recognised institutions
are also eligible for entry. The courses can be pursued through a tuition-based
programme or privately. Tuition-based programmes (physical or virtual classes) are
however recommended due to the interactiveness with facilitators and other students
which are key in imparting the requisite technical and soft skills.
A summary on each of the professional courses is presented below:

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

 (i) Certified Public Accountants (CPA) course
The course imparts knowledge, skills, values and attitudes to, among other
competencies:
• Prepare accounts and financial statements including for complex entities
in both the private and public sectors.
• Use computerised accounting systems
• Practically apply data analytical tools analyse data and reach conclusions.
• Undertake audit and assurance services
• Apply advanced financial management skills to evaluate various financial
aspects of a business for decision making
• Prepare management accounts
• Apply leadership and management skills in practice to manage teams and achieve
results
The course is aimed at persons who wish to qualify and work or practice as professional
accountants, auditors, finance managers, tax managers and consultants in related areas
in both public and private sectors.

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Assessment will be conducted in a variety of ways, including examinations, practical

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papers, workshops attendance and practical experience.

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In addition to the above papers, prior to certification, candidates will be required to

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• Attend workshops on ethics, soft skills and emerging issues organised by Kasneb

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and ICPAK and earn IPD hours)

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• Obtain 1-year practical experience, or alternatively attend workshops on work

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based simulation organised by Kasneb and ICPAK. ww
In order to assist CPA students to obtain the requisite practical experience and internship
opportunities, they will be registered as student members of the Institute of Certified Public
Accountants of Kenya (ICPAK) under a programme called the Trainee Accountants
Practical Experience Programme (TAPEF). Through TAPEF, ICPAK working in
consultation with Kasneb will assist students as much as possible to link with professional
accountants who will mentor them towards obtaining the necessary practical experience.
(ii) Certified Secretaries (CS) course
The course imparts knowledge, skills, values and attitudes to, among other competencies:
• Practice and promote principles of good governance within public and private sector
entities
• Implement and comply with legal, regulatory and ethical requirements in practice
• Ensure proper conduct and management of meetings
• Undertake consultancy and advisory services in corporate secretarial and related
practices
• Manage boardroom dynamics
• Undertake governance and compliance audits
The course is aimed at persons who wish to qualify and work or practice as corporate
secretaries, policy formulators and consultants in governance, governance and
compliance auditors and administrators at county and national levels and in the private
sector.
Assessment will be conducted in a variety of ways, including examinations, projects and
workshops attendance.

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

(iii) Certified Investment and Financial Analysts (CIFA) course
The course imparts knowledge, skills, values and attitudes to, among other
competencies:
• Apply financial tools and concepts in analysis and valuation of investment and
securities
• Manage and grow portfolios of investments
• Analyse various types of investments including equity investments, fixed income
investments and derivatives
• Manage corporate finances
• Apply financial modelling and analytical tools in investments analysis
The course is aimed at persons who wish to qualify and work or practice as investment,
securities and financial analysts, portfolio managers, investment bankers, fund
managers, consultants on national and global financial markets and related areas.
(iv) Certified Credit Professionals (CCP) course
The course imparts knowledge, skills, values and attitudes to, among other
competencies:

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• Manage the credit cycle for trade credit providers

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• Manage credit risk for different entities

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• Undertake credit analysis for various corporate entities

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• Undertake debt collection in a professional manner

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• Comply with various requirements in debt management including governance,

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ethical, legal and regulatory requirements.
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The course is aimed at persons who wish to qualify and work or practice in various
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fields of credit management including credit analysis, debt management and recovery,
corporate lending and related areas in both formal and informal sectors.
(v) Certified Information Systems Solutions Expert (CISSE) course
The course imparts knowledge, skills, values and attitudes to, among other
competencies:
• Develop information systems solutions for a business
• Design and operationalise database management systems
• Design, configure and trouble shoot computer networks
• Implement ICT projects
• Manage and analyse big data
(e) Post-professional specialisation course
Kasneb has introduced the Certified Forensic Fraud Examiner (CFFE). The course imparts
knowledge, skills, values and attitudes to, among other competencies:
• Apply analytical techniques in fraud detection
• Design and implement preventive and detective controls
• Apply and ensure compliance with the appropriate laws in fraud investigations
• Apply the burden and standards of proof in civil and criminal proceedings
• Apply the various methods and techniques of conducting fraud investigations
• Write standard investigations and expert witness reports
• Develop fraud prevention programs
• Conduct a fraud prevention health check up
• Develop and implement a fraud risk management program
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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

 The course is aimed at persons who wish to qualify and work or practice in the fields of
financial fraud and corruption investigations, fraud prevention, fraud risk analysis and
related areas.
The CFFE is administered in three modules, with an integrated case study and workshops
at the end of the course. Each module is expected to last for three months. Examinations
for the CFFE course will be administered three times in a year, thus the course is meant to
last on average one year.

The minimum entry requirement to pursue the CFFE course is:

• Kasneb professional qualification; or
• Bachelor’s degree from a recognised university; or
• Any other qualification considered equivalent to the above.
The course can be pursued through tuition-based learning or self-study.

Kasneb working with other partners will be rolling out another post-professional
specialisation area in public financial management.

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(f) Examinations for holders of foreign qualifications wishing to be registered and

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practice in Kenya

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(i) Examination for holders of foreign accountancy qualifications (FAQs)

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In consultation with the Council of ICPAK under Section 26 Sub-Sections (2) and (3)

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of the Accountants Act, 2008, kasneb examines holders of foreign accountancy

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qualifications who have applied for registration as Certified Public Accountants

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(CPAs) of Kenya and they are required to demonstrate their knowledge of local law
and practice. w.
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(ii) Examination for holders of foreign secretaries qualifications (FSQs)
In consultation with the Council of ICS under Section 20 Sub-Sections (2) and (3) of
the Certified Public Secretaries of Kenya Act, Cap 534, kasneb examines holders of
foreign secretaries qualifications who have applied for registration as Certified
Secretaries (CSs) of Kenya and they are required to demonstrate their knowledge of
local law and practice.
(iii) Examination for holders of foreign investment and financial analysts
qualifications (FIFAQs)
In consultation with the Council of ICIFA under Section 16 Sub-Sections (2) and (3)
of the Investment and Financial Analysts Act, No. 13 of 2015, kasneb examines
holders of foreign qualifications who have applied for registration as Certified
Investment and Financial Analysts (CIFA) and they are required to demonstrate their
knowledge of local law and practice.

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

3.0 EXAMINATION RULES AND REGULATIONS
3.1 Registration and examination bookings
All applications for registration and examination booking must be in the prescribed
manner. Students are advised to download the e-kasneb app for purposes of
registration and examination booking. The deadline for registration and examination
booking will be specified for each sitting but may not be later than thirty days to the
date of the next examinations.
3.2 Exemptions
Exemptions may, on application, be granted to registered students who are holders of
certain degrees and diplomas recognised by kasneb. Exemptions will be granted on a
paper by paper basis. Details on available exemptions can be accessed on the kasneb
website www.kasneb.or.ke.
3.3 Retention of Credits
Credits for papers passed by candidates will be retained without limit.

3.4 Progression Rule

A candidate will not be allowed to enter a higher level of the examination before

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completing the lower level.

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3.5 Registration Renewal

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3.5.1 A registered student must renew the studentship registration annually on the

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first day of July provided that newly registered students will be required to

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renew their registration on the first day of July following the examination
sitting to which they are first eligible to enter.

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3.5.2
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A student who without good cause fails to renew the registration within three
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months of the renewal date will be deemed to have allowed the registration
to lapse and may thus forfeit the right to write the examination until the
renewal position is regularised. The registration number of a student who fails
to renew the registration for three consecutive years will be deactivated, that
is, removed from the register of students and will thus not be able to book for
examinations until the registration number is reactivated.
3.5.3 A student whose registration number is deactivated for failure to renew the
registration may apply for reactivation provided that if the application is
accepted, the student shall:
(a) Pay the registration reactivation fee.

(b) Pay three years of registration renewal fees.

3.6 Rules Governing the Conduct of Students in the Examination Room
Kasneb will conduct examinations on both computer-based and paper-based
platforms. The following rules mainly relate to paper-based examinations. Kasneb will
be issuing additional rules specific to computer-based examinations in due course.

3.6.1 Candidates should present themselves for the examination at least 30

minutes before the scheduled time for the commencement of the examination
they are taking.
3.6.2 A candidate who arrives half an hour or later after the commencement of the
examination will not be allowed to take the examination nor will a candidate be
permitted to leave the examination room until after the end of the first half hour
since the commencement of the examination.
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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

3.6.3 Each candidate is assigned a registration number upon registration as a student
of kasneb. The candidate must sit at the place indicated by that number in the
examination room. The registration number must be entered in the space
provided at the top right-hand corner of each answer sheet.

3.6.4 The name of the candidate must not appear anywhere on the answer sheet.
3.6.5 Each answer sheet has a serial number indicated on the top, left hand side of the
answer sheet. Each candidate must indicate the serial number of the answer
sheet(s) used for each examination paper in the signature register.
3.6.6 Examination stationery will be provided in the examination room, but
candidates must bring their own blue or black ink pens, pencils, and rulers.

3.6.7 Mobile phones are strictly not allowed in the examinations room.
3.6.8 No stationery whatsoever may be removed from the examination room.

3.6.9 Candidates must not carry the examination question papers from the
examination room.

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3.6.10 Candidates are allowed to use calculators provided that such calculators are

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noiseless, cordless and non-programmable.

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3.6.11 Candidates will be required to positively identify themselves to the chief

a
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invigilator by producing their student identification cards and the national
identity cards. Non-Kenyan candidates will be required to produce other

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relevant identification documents such as passports.
w.
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3.6.12 Strict silence must be observed during the entire duration of the examination.
3.6.13 Candidates must not possess any notes, printed paper or books in the
examination room, but must leave any such material with the chief invigilator.
Candidates using clipboards must ensure that such clipboards have no writing
on them whatsoever.
3.6.14 Smoking is not allowed in the examination room.
3.6.15 Candidates must not collude in the examination room by exchanging notes or
keeping the answer booklet in such a way that another candidate can read or
copy from the booklet.
3.6.16 Impersonation in the examination room is not only a serious offence but also a
criminal offence.
3.6.17 During the course of the examination, no candidate may leave the examination
room without permission from the chief invigilator. Any candidate who does so
will not be allowed to return to the examination room.
3.6.18 Candidates who finish the paper before the chief invigilator announces the end
of the examination and wish to leave the examination room while the
examination is in progress must inform the invigilator and hand in their scripts
to the invigilator before leaving the examination room. However, no candidate
will be allowed to leave the examinations room during the last fifteen (15)
minutes of the examination.
3.6.19 Candidates must not leave the examination room with any answer booklet or
answer sheets.

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

 3.6.20 Candidates must not leave the examination room before their answer booklets
are collected by the invigilators.
3.6.21 Candidates must not write notes on the examination timetable (Authority to sit
the Examination).
3.6.22 Candidates with confirmed disabilities may apply to kasneb to be allowed extra
time during examinations. Such application should be made at least two
months prior to the examination.
3.6.23 Candidates must produce the timetables (Authority to sit the Examination) in
order to be allowed to take the examination. Candidates may download their
timetables (Authority to sit the Examination) from the kasneb website or through
the e-kasneb. The downloaded timetables may be used as authority to sit the
examination.
3.7 Action for Breach of Examination Rules and Regulations
3.7.1 kasneb is mandated by the Accountants Act, 2008 under Section 17 (1)(e) to
investigate and determine cases involving indiscipline by students registered
with kasneb. Section 42 of the Act further defines examination offences that
are punishable under the law and the applicable penalties.

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3.7.2 Disciplinary action will be taken against candidates who breach the

c
a.
examination rules and regulations of kasneb. A breach of the examination rules

ny
and regulations of kasneb shall include but is not limited to the following:
(a) Deficiency in identification.

ke
(b) Impersonation.

a
me
(c) Collusion.

so
(d) Possession of a mobile phone in the examination room.

w.
(e) Possession of notes in the examination room. ww
(f) Taking away answer booklets.
(g) Writing of names on the scripts.
(h) Possession of mobile phones in the examination room.
(i) Carrying the examination question papers from the examination room.
3.7.3 The action for breach of the examination rules and regulations of kasneb shall
include but not limited to the following:

(a) De-registration as a student of kasneb.

(b) Cancellation of registration number.
(c) Nullification of candidate’s results.
(d) Prohibition from taking examinations of kasneb.
(e) Written reprimand and warning.
3.7.4 Certain breaches of the rules and regulations amount to breaches of the law.
In such cases, candidates will be handed over to the police for investigations
and appropriate legal action.

Section 42 of the Accountants Act, 2008 provides that a person who:

(a) gains access to examinations materials and knowingly reveals the
contents, whether orally, in writing or through any other form, to an
unauthorised party, whether a candidate or not;
(b) wilfully and maliciously damages examinations materials;

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

(c) while not registered to take a particular examination, with intent to
impersonate, presents or attempts to present himself to take the part of
an enrolled candidate;
(d) presents a forged certificate to a prospective employer or to an
institution of learning with intent to gain employment or admission; or
(e) introduces unauthorised materials into the examinations room, whether
in writing or in any other form, whether a candidate or not, commits an
offence and is liable on conviction to imprisonment for a term not
exceeding three years, or to a fine not exceeding one hundred thousand
shillings, or to both.

om
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a.
ny
a ke
me
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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

 CERTIFIED PUBLIC ACCOUNTANTS (CPA)

FOUNDATION LEVEL

PAPER NO. 1 FINANCIAL ACCOUNTING

UNIT DESCRIPTION
This paper is intended to introduce the candidate to the overall purpose of accounting,
applicable regulations, the accounting treatment and presentation of basic transactions and
preparation and analysis of financial statements.

LEARNING OUTCOMES
A candidate who passes this paper should be able to:
• Prepare books of original entry and basic ledger accounts under the double entry system
• Prepare basic financial statements of sole traders, partnerships, companies,
manufacturing entities and not for profit organisations
•

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Comply with the regulatory framework in the accounting field
•

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Analyse financial statements by use of ratios and statement of cash flows
•

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Demonstrate basic understanding of public sector accounting framework

en
CONTENT

ak
1. Introduction to Accounting

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1.1 Nature and Purpose of Accounting

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1.2 The objective of Financial Accounting

w.
1.3 The Elements of Financial Statements

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1.4 The Accounting Equation
1.5 The Users of Accounting Information

2. The Accounting Process and Systems

2.1 The Source documents such as receipts and invoices
2.2 The Books of Prime entry/Original Entry from the journals, cashbooks, Petty cash
books and registers
2.3 The Ledger and the concept of double entry
2.4 The Trial Balance
2.5 The Financial Statements

3. Regulation and other principles guiding the accounting profession

3.1 The legal sources of regulation
3.2 The professional sources of regulation (local and international bodies) and ethical
requirements
3.3 Accounting Standards
3.4 Common accounting principles/concepts
3.5 Qualities of useful financial information

4. Accounting for Assets and Liabilities

4.1 Property, Plant and Equipment (depreciation, acquisition, disposal, exchange,
excluding revaluations)
4.2 Intangible Assets

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

 4.3 Financial Assets and Financial Liabilities (Definition, Examples and Classification
only)
4.4 Inventory
4.5 Cash in hand and cash at bank (bank reconciliation statements)
4.6 Trade Receivables (Measurement and credit Losses)
4.7 Trade payables
4.8 Accrued Incomes/Expenses and Prepaid Incomes/Expenses

5. Financial Statements of a sole trader

5.1 Statement of Profit or Loss
5.2 Statement of Financial Position

6. Financial Statements of a partnership

6.1 The partnership deed/agreement
6.2 The statement of Profit or Loss and appropriation
6.3 Partners' capital and current accounts
6.4 The statement of financial position

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6.5 Accounting treatment and presentation when there is a change in profit/loss

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sharing ratio, admission/retirement of a partner, dissolution of a partnership

ya
en
7. Financial Statements of a company

ak
7.1 Important concepts of a company (Ordinary and Preference share capital, issuing

me
new shares by way of full market price, bonus shares and rights issue, Reserves,

so
retained profits and corporation tax)

w.
7.2 Statement of Profit or Loss

ww
7.3 Other comprehensive incomes
7.4 Statement of Financial Position
7.5 Statement of Cash flows

8. Financial Statements of a manufacturing entity

8.1 Manufacturing Statement of production
8.2 Statement of Profit or Loss
8.3 Statement of Financial Position

9. Statements of a not-for-profit entity

9.1 Objectives of Not-for-profit organisations
9.2 Statement of Income and Expenditure
9.3 Statement of Financial Position

10. Correction of errors and preparing financial statements with incomplete records
10.1 Types and causes of errors
10.2 Correcting errors in source documents, the books of prime entry, the ledger, the
trial balance and financial statements
10.3 Reasons for incomplete information
10.4 Preparation of financial statements from incomplete information

11. Analyzing Financial Statements

11.1 The objective of analysing financial statements
11.2 Analysing financial statements using financial ratios (Liquidity, Profitability,
Solvency, Efficiency, Investor/Value and Cash Flow categories)
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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

12. Accounting in the Public Sector
12.1 Features of public sector entities (as compared to private sector)
12.2 Structure of the public sector (National and county governments, State
Corporations, Departments and Agencies)
12.3 Regulation and oversight (International Public Sector Accounting Standards
Board, Director of Accounting Services, National Treasury, Parliamentary
Committees, Accounting Officers at national and county levels)
12.4 Objectives of public sector financial statements and Standards (IPSAS)
12.5 Accounting techniques in public sector such as budgeting, cash, accrual,
commitment and fund accounting)

Sample Reading and Reference Material

1. Wood, F & Robinson, S. (2018). Bookkeeping and Accounts (9th edition). Harlow. Pearson
Education Ltd.

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2. Glautier, M., Underdown, B., & Morris, D. (2011). Accounting: Theory and Practice (8th

.c
ya
edition.). Harlow. Pearson Education Ltd.

en
3. Sangster, A. & Wood, F. (2018). Frank Wood’s Business Accounting Volume 1 (14th

ak
edition.) Harlow. Pearson Education Ltd.

me
4. Kasneb e-learning resources (link on the Kasneb website)

so
5. Kasneb approved study packs

w.
ww

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

PAPER NO. 2 COMMUNICATION SKILLS

UNIT DESCRIPTION
This paper is intended to equip the candidate with the knowledge, skills and attitude that will
enable him/her to communicate clearly and concisely, orally and in writing in formal and informal
situations.

LEARNING OUTCOMES
A candidate who passes this paper should be able to:
• Communicate effectively and ethically in an organization using different media
• Use non-verbal cues effectively in communication
• Demonstrate effective presentation skills
• Apply the protocols of team and virtual groups’ communication
• Write formal reports and proposals
• Apply information technology in communication

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CONTENT

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1. Introduction to communication

ya
1.1 Meaning of communication

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1.2 Role of communication in an organisation
1.3 Elements of communication

ak
1.4 The communication process

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1.5 Principles of effective communication

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1.6 Essential of an effective communication system

w.
1.7 Barriers to effective communication

2. Types of communication
2.1 Formal and informal communication ww
2.2 Flow of communication in an organisation
2.3 Grapevine communication
2.4 Internal and external communication
2.5 Interpersonal and intrapersonal communication
2.6 Cross-cultural communication
2.7 E-mail
2.8 Visual communication - graphs/charts/tables/diagrams/pictures

3. Oral communication
3.1 Meaning of oral communication
3.2 Importance of oral communication
3.3 Types of oral communication - Face to face and telephone conversations
3.4 Effective listening -The listening process, principles of effective listening, listening
techniques, barriers to effective listening
3.5 Interviews - Types, purpose, preparation and conduct of interviews
3.6 Persuasive communication - Meaning, objectives, creating persuasive messages,
approaches to persuasion
4. Non-verbal communication
4.1 Meaning and importance of non-verbal communication
4.2 Forms of non-verbal communication
4.3 Effective use of non-verbal communication
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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

 4.4 Barriers to effective non-verbal communication
5. Writing skills
5.1 Sentence construction and paragraph development
5.2 Business letters
5.3 Memorandum
5.4 Posters and notices
5.5 Forms and questionnaires
5.6 Circulars and newsletters
5.7 Advertisements and publicity materials
5.8 Documents used in business transactions - letter of enquiry, catalogue, quotation,
purchase order, invoice, credit note, debit note, others
5.9 CVs and resume

6. Public speaking and presentation

6.1 Effective presentation skills
6.2 Audience analysis
6.3 Selecting and researching the topic

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6.4 Preparation and organisation of an effective presentation

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6.5 Structure of presentation

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6.6 Presentation aids

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6.7 Public speeches - Structure and delivery of public speeches

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6.8 PowerPoint presentations

me
so
7. Group and team communication

w.
7.1 Group communication networks

ww
7.2 Team communication
7.3 Communicating in virtual groups and teams-group e-mails, what’s app groups,
social media
7.4 Meetings - Types, role of members, preparation, conduct, documents used in
meetings
7.5 Conferences and symposia

8. Report and proposal writing

8.1 Types and purpose of reports
8.2 Structure and content of reports
8.3 Types and uses of proposals
8.4 Structure and content of proposals
8.5 Writing of formal reports and proposals

9. Information technology and communication

9.1 Role and impact of technology in communication
9.2 Communication networks - Internet, intranet and extranet
9.3 Teleconferencing and video conferencing
9.4 Webinar
9.5 Wireless technology

10. Ethics in communication

10.1 Role of ethical communication in an organisation
10.2 Principles of ethical communication
10.3 Ethical issues in communication
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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

10.4 Enhancing ethical communication in an organisation
10.5 Factors influencing ethical communication
10.6 Ethical dilemmas in communication
10.7 Handling ethical dilemmas in communication

Sample reading and reference material

1. Thrill, J and Bovee, C (2017). Business Communication Today (14th edition). Pearson.
2. Stanton, N (2016). Mastering Communication (5th edition). Wiley.
3. Taylor, S (2016). Communication for Business: A Practical Approach (4th edition).
Pearson.
4. Floyd, K. and Cardon, P. (2019). Business and Professional Communication. McGraw-
Hill.
5. Kasneb e-learning resources (link on the Kasneb website)
6. Kasneb approved study packs

om
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ya
en
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w.
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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

PAPER NO. 3 INTRODUCTION TO LAW AND GOVERNANCE

UNIT DESCRIPTION
This paper is intended to equip the candidate with the knowledge, skills and attitude that will
enable him/her to apply the principles of law and legal systems in an entity and ensure compliance
with basic principles of governance and ethics.

LEARNING OUTCOMES
A candidate who passes this paper should be able to:
• Demonstrate knowledge of essential elements of the legal system
• Demonstrate knowledge of legal personality
• Apply law of contract and tort in various scenarios
• Apply general principles of business law in practice
• Apply fundamental principles of ethics in practice
• Comply with fundamental principles of governance

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CONTENT

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ya
1. Nature, Purpose and Classification of Law

en
1.1 Meaning of law
1.2 Nature of law

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1.3 Purpose of law

me
1.4 Classification of law

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1.5 Law and morality

w.
1.6 The Constitution

ww
1.7 Legislation and delegated legislation
1.8 Substance of common law and doctrines of equity
1.9 African customary law
1.10 Islamic law, Hindu law and African customary law
1.11 Judicial precedence
1.12 General rules of International law and ratified treaties

2. Administrative Law
2.1 Meaning of administrative law
2.2 Sources of administrative law
2.3 Functions of administrative laws
2.4 Doctrine of separation of powers
2.5 Delegated legislation
2.6 Control of delegated legislation
2.7 Discretion and Judicial count of executive
2.8 Liability of state (contractual/ tortious)
2.9 Principles of natural justice
2.10 Judicial control of the Executive
2.11 Independence of Judiciary
2.12 Remedies in administrative law (mandamus, certiorari, prohibition, habeas corpus;
injunction and declaration)

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

3. The Court System
3.1 Establishment, structure, composition and jurisdiction of courts
3.2 Supreme Court
3.3 Court of Appeal
3.4 High Court
3.5 Employment and Labour Relations Court
3.6 Environmental and Land court
3.7 International Court of Justice
3.8 Magistrates Court
3.9 Court Martial
3.10 Kadhi’s Court
3.11 Distinction between Courts and Tribunals

4. Alternative Dispute Resolutions (ADR)

4.1 Nature of alternative dispute resolutions (ADR)
4.2 Nature and types of disputes
4.3 Legal framework governing ADR

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4.4 General principles of ADR

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4.5 Negation and Conciliation

ya
4.6 Mediation

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4.7 Arbitration

ak
4.8 Dispute Review Boards

me
4.9 Traditional dispute resolution mechanisms

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w.
5. Law of Persons

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5.1 Natural and artificial persons
5.2 Nationality, citizenship and domicile
5.3 Unincorporated and incorporated associations
5.4 Co-operative societies

6. Law of Tort
6.1 Nature of tort
6.2 General defenses under tort
6.3 Negligence
6.4 Types of liabilities in tort
6.5 Trespass
6.6 Limitation and survival of actions
6.7 Remedies in tort
6.8 Principles in awards damages
6.9 Defamation

7. Law of Contract
7.1 Definition of a contract
7.2 Classification of contracts
7.3 Essentials of a valid contract
7.4 Terms of a contract
7.5 Exemption clauses
7.6 Vitiating factors
7.7 Discharge of contract
7.8 Remedies for breach of a contract
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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

 7.9 Limitation of actions
7.10 Contract negotiation
7.11 Information technology and the law of contract

8. Sale of Goods
8.1 Nature of the contract of sale of goods
8.2 Types of goods
8.3 Formalities of the contract
8.4 Terms of the contract
8.5 Implied terms by statute, custom/usage
8.6 Rights and duties of the parties
8.7 Remedies for price and breach of contract
8.8 Auction sales
8.9 International contracts of sale: FAS, FOB, CIF, FCA, CPT, CIP, DAT, DAP, DDP,
CFR, DAF, DDU, Ex-works and Ex-ship

9. Agency

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9.1 Meaning and nature of the agency contract

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9.2 Types of agents

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9.3 Parties to the agency relationship

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9.4 Creation of agency

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9.5 Authority of an agent

me
9.6 Rights and duties of the parties

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9.7 Personal liability of agents

w.
9.8 Liability of the parties

ww
9.9 Termination of agency

10. Partnership
10.1 Nature of partnership
10.2 Registration process and requirements of partnership business
10.3 Types of partnerships
10.4 Rights, duties and liabilities of existing, incoming and minor partners
10.5 Management of partnerships
10.6 Dissolution of partnerships and its consequences

11. Indemnity and Guarantees

11.1 Essential features of indemnity
11.2 Nature and extent of liability of indemnifier
11.3 Commencement of liability of indemnifier
11.4 Nature of the contracts; essential features of contract guarantee; distinction
between contract of guarantee/ indemnity extent of nature and surety
11.5 Obligations of surety
11.6 Discharge of surety
11.7 Letters of credit
11.8 Rights and duties of the parties
11.9 Termination of the contract
11.10 Remedies for breach of contract

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

12. Insurance
12.1 Nature of the contract; types, parties to negotiable instrument
12.2 Formalities of the contract
12.3 Types of risks
12.4 Parties to the contract of insurance
12.5 Principles of insurance
12.6 Types of insurance
12.7 Transfers and amalgamation
12.8 Termination of the contract
12.9 ICT and insurance

13. Negotiable Instruments

13.1 Nature and characteristics
13.2 Negotiability of the instrument
13.3 Types: Cheques, promissory notes, bills of exchange
13.4 Types of crossings
13.5 Obligations of the parties

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13.6 Banker- customer relationship

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13.7 Presentment; purpose, time, place

ya
13.8 Discharge from liability

en
13.9 Modes of discharge

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13.10 Dishonour, mode of dishonour, nature of protest, penalties for dishonour

me
13.11 Acceptance for honour

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13.12 Criminal liability

w.
ww
14. The Law of Property
14.1 Definition of property
14.2 Classification of property (real and personal, movable and immovable, tangible and
intangible)
14.3 Property in land: Private, public and community land
14.4 Interests in land: Estates, servitudes and encumbrances
14.5 Intellectual property: Plant breeder’s patents, trademarks, copyrights and industrial
designs
14.6 Administration and management of land
14.7 Sectional properties
14.8 Management company
14.9 Obligations of lessor and lessee in sessional property Act
14.10 Transfer of land rights
14.11 Role of professionals (Advocates, Certified Secretaries) in land transactions

15. Introduction to corporate governance

15.1 Corporate governance – Definition and objects
15.2 Principles of corporate governance
15.3 Best practice in corporate governance
15.4 Role of stakeholders (shareholders, Board of Directors, Government)
15.5 Conflict of interest - Investor education and protection of shareholders
15.6 Compliance obligations
15.7 Legal Audit- definition and objects

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

16. Professional Ethics
16.1 Introduction and overview of professional ethics
16.2 Professional misconduct
16.3 Publicity and advertisement
16.4 Morality and etiquette
16.5 Professional ethics for accountants, corporate secretaries
16.6 Ethics and practice within a firm
16.7 Enforcement of professional ethics and standards

Sample reading and reference material

1. Jackson, T. The Law of Kenya. (3rd edition). Nairobi: Kenya Literature Bureau.
2. Ogola J. J., Business Law. (Revised Edition): Focus publications limited.
3. Furmston M., (2017). Cheshire, Fifoot and Furmston’s Law of Contract (17th edition)
London: Butterworth’s.
4. Finch, E. & Fafinski, S. (2013) Tort Law (4th edition) London: Pearson.

om
5. Steel, J. (2017). Tort Law: Text, Cases, and Materials (4th edition). Oxford: Oxford University

.c
Press.

ya
6. Kasneb e-learning resources (link on the Kasneb website).

en
7. Kasneb approved study packs.

ak
me
so
w.
ww

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

 PAPER NO. 4 ECONOMICS

UNIT DESCRIPTION
This paper is intended to equip the candidate with knowledge, skills and attitude to identify the
impact and interaction of economic principles in various situations and apply the principles in
decision making.

LEARNING OUTCOMES
A candidate who passes this paper should be able to:
• Apply basic mathematical and graphical techniques to analyse economic relationships
• Apply the knowledge of economics in decision making
• Analyse economic problems and suggest possible policy related recommendations
• Apply knowledge of economics in international trade and finance
• Relate economics to income levels and development in a country

CONTENT

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1. Microeconomics

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1.1 Introduction to economics

ya
1.1.1 Definition of economics
1.1.2 Basic economic concepts: economic resources, human wants, scarcity and

en
choice, opportunity cost, production possibility curves/frontiers

ak
1.1.3 Scope of economics: Micro and macro economics

me
1.1.4 Methodology of economics: positive and normative economics, scientific

so
methods, economics as a social science.

w.
1.1.5 Economic systems: planned economy, free market economy, mixed

ww
economy
1.1.6 Consumers’ sovereignty and its limitations

1.2 Demand, supply and determination of equilibrium

1.2.1 Demand analysis
1.2.1.1 Definition
1.2.1.2 Law of demand
1.2.1.3 Exceptional demand curves
1.2.1.4 Individual demand versus market demand
1.2.1.5 Factors influencing demand
1.2.1.6 Types of demand
1.2.1.7 Movement along and shifts of demand curves
1.2.1.8 Elasticity of demand
1.2.1.9 Types of elasticity: price, income and cross elasticity
1.2.1.10 Measurement of elasticity; point and arc elasticity
1.2.1.11 Factors influencing elasticity of demand
1.2.1.12 Application of elasticity of demand

1.2.2 Supply analysis

1.2.2.1 Definition
1.2.2.2 Individual versus market supply
1.2.2.3 Factors influencing supply
1.2.2.4 Movements along and shifts of supply curves
1.2.2.5 Definition of elasticity of supply

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

 1.2.2.6 Price elasticity of supply
1.2.2.7 Factors influencing elasticity of supply
1.2.2.8 Application of elasticity of supply

1.2.3 Determination of equilibrium

1.2.3.1 Interaction of supply and demand, equilibrium price and
quantity
1.2.3.2 Mathematical approach to equilibrium analysis
1.2.3.3 Stable versus unstable equilibrium
1.2.3.4 Effects of shifts in demand and supply on market equilibrium
1.2.3.5 Effect of taxes and subsidies on market equilibrium
1.2.3.6 Price controls: Maximum and Minimum price control
1.2.3.7 Price decontrol: Effect of Minimum and Maximum price
decontrol
1.2.3.8 Reasons for price fluctuations in agriculture

1.2.4 The theory of consumer behaviour

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1.2.4.1 Approaches to the theory of the consumer - cardinal versus

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ordinal approach

ya
1.2.4.2 Utility analysis, marginal utility (MU), law of diminishing

en
marginal utility (DMU)

ak
1.2.4.3 Limitations of cardinal approach

me
1.2.4.4 Indifference curve analysis; Indifference curve and budget line

so
1.2.4.5 Consumer equilibrium; effects of changes in prices and

w.
incomes on consumer equilibrium

ww
1.2.4.6 Derivation of a demand curve
1.2.4.7 Applications of indifference curve analysis: substitution effect
and income effect for a normal good, inferior good and a giffen
good; derivation of the Engels curve
1.2.4.8 Consumer surplus/Marshallian surplus

1.2.5 The theory of a firm

1.2.5.1 The theory of production
1.2.5.1.1 Factors of production
1.2.5.1.2 Mobility of factors of production
1.2.5.1.3 Short run analysis
1.2.5.1.4 Total product, average and marginal products
1.2.5.1.5 Stages in production and the law of variable
proportions/the law of diminishing returns
1.2.5.1.6 Long run analysis
1.2.5.1.7 Isoquant and isocost lines
1.2.5.1.8 The concept of producer equilibrium and firm’s
expansion curve
1.2.5.1.9 Law of diminishing returns to scale
1.2.5.1.10 Demand and supply of factors of production
1.2.5.1.11 Wage determination: demand and supply for
labour
1.2.5.1.12 Wage differential
1.2.5.1.13 Trade unions: functions, effectiveness and
challenges
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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

 1.2.5.1.14 Transfer earnings and economic rent

1.2.6 The theory of costs

1.2.6.1 Short run costs analysis and size of the firm’s total cost,
fixed cost, average cost, variable costs and marginal cost
1.2.6.2 Long run costs analysis
1.2.6.3 Optimal size of a firm
1.2.6.4 Economies and diseconomies of scale

1.2.7 Market structures

1.2.7.1 Definition of a market
1.2.7.2 Necessary and sufficient conditions for profit maximisation
1.2.7.3 Mathematical approach to profit maximisation
1.2.7.4 Output, prices and efficiency of: Perfect competition,
monopoly, monopolistic competition, oligopolistic
competition
2. Macroeconomics

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2.1 National income

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2.1.1 Definition of national income

ya
2.1.2 Circular flow of income

en
2.1.3 Methods/approaches to measuring national income

ak
2.1.4 Concepts of national income: gross domestic product (GDP), gross national

me
product (GNP) and net national product (NNP), net national income (NNI)

so
at market price and factor cost, disposable income

w.
2.1.5 Difficulties in measuring national income

ww
2.1.6 Uses of income statistics
2.1.7 Analysis of consumption, saving and investment and their interaction in a
simple economic model
2.1.8 Mathematical approach to the determination of equilibrium national income
2.1.9 Inflationary and deflationary gaps
2.1.10 The multiplier and accelerator concepts
2.1.11 Business cycles/cyclical fluctuations

2.2 Economic growth, economic development and economic planning

2.2.1 The differences between economic growth and economic development
2.2.2 Actual and potential growth
2.2.3 The benefits and costs of economic growth
2.2.4 Determinants of economic development
2.2.5 Common characteristics of developing countries
2.2.6 Obstacles to economic development
2.2.7 The need for development planning
2.2.8 Short term, medium term and long term planning tools
2.2.9 Challenges to economic planning in developing countries

2.3 Money and banking

2.3.1 Money
2.3.1.1 The nature and functions of money
2.3.1.2 Demand and supply of money
2.3.1.3 Theories of demand for money: The quantity theory, the
Keynesian liquidity preference theory
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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

 2.3.2 The banking system
2.3.2.1 Definition of commercial banks
2.3.2.2 The role of commercial banks and non-banking financial
institutions in the economy
2.3.2.3 Credit creation
2.3.2.4 Definition of central bank
2.3.2.5 The role of the central bank; traditional and changing role in a
liberalised economy, such as financial sector reform,
exchange rate reform
2.3.2.6 Monetary policy, definition, objectives, instruments and
limitations
2.3.2.7 Classical theory of interest rate determination
2.3.2.8 Interest rates and their effects on the level of investment,
output, inflation and employment
2.3.2.9 Harmonisation of fiscal and monetary policies
2.3.2.10 Simple IS - LM Model
2.3.2.11 Partial equilibrium and general equilibrium

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.c
2.4 Inflation and unemployment

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2.4.1 Inflation

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2.4.1.1 Definition and types of inflation

ak
2.4.1.2 Causes of inflation: cost push and demand pull

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2.4.1.3 Effects of inflation

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2.4.1.4 Measures to control inflation

w.
ww
2.4.2 Unemployment
2.4.2.1 Definition of unemployment
2.4.2.2 Types and causes of unemployment
2.4.2.3 Control measures of unemployment
2.4.2.4 Relationship between unemployment and inflation: The
Phillips curve

2.4.3 Agriculture and Industry

2.4.3.1 Role of agriculture in economic development
2.4.3.2 Challenges facing agricultural sector in developing countries
2.4.3.3 Policies to improve the agricultural sector
2.4.3.4 Role of industry in economic development
2.4.3.5 Benefits of small scale industries in developing countries
2.4.3.6 Obstacles to industrial development in developing countries
2.4.3.7 Policies to enhance industrial development in developing
countries

2.4.4 International trade and finance

2.4.4.1 Definition of International trade, advantages and
disadvantages
2.4.4.2 Theory of absolute advantage and comparative advantage
2.4.4.3 World trade organisation (WTO) and concerns of developing
countries
2.4.4.4 Protection in international trade

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

 2.4.4.5 Regional integration organisations, commodity agreements
and the relevance to less developed countries (LDCs)
2.4.4.6 Terms of trade, balance of trade, balance of payments
(causes and methods of correcting deficits in balance of
payments)
2.4.4.7 Exchange rates: Types of foreign exchange regimes, factors
influencing exchange rates, foreign exchange reserves
2.4.4.8 Foreign Direct Investment: case for and case against FDI
2.4.4.9 Foreign Aid: Case for and case against foreign aid
2.4.4.10 Bretton Woods financial institutions: International Monetary
Fund (IMF) and World Bank
2.4.4.11 Foreign debt management: causes, consequences of
excessive debt and interventions
2.4.4.12 Structural Adjustment Programmes (SAPs) and their impacts
on the LDCs

Sample reading and reference material

om
.c
1. Mudida R. Modern Economics. (2nd edition). Focus Publishers Ltd. Nairobi, Kenya.

ya
2. Mukras. M. S . Elements of Mathematical Economics (Revised Edition). Kenya Literature

en
Bureau. Nairobi, Kenya.

ak
3. Kasneb e-learning resources (link on the Kasneb website)

me
4. Kasneb approved study packs

so
w.
ww

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

PAPER NO. 5 QUANTITATIVE ANALYSIS

UNIT DESCRIPTION

This paper is intended to equip the candidate with knowledge, skills and attitudes that will enable
the learner to use quantitative analysis tools in business operations and decision making.

LEARNING OUTCOMES
A candidate who passes this paper should be able to:
• Use mathematical techniques to solve business problems.
• Apply set and probability theories in business decision making
• Apply operation research techniques in decision making
• Apply hypothesis testing in analysing business situations
• Apply linear programming to solve practical business problems

CONTENT

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1. Mathematical Techniques

.c
ya
1.1 Functions

en
1.1.1 Definition

ak
1.1.2 Functions, equations, inequalities and graphs; linear, quadratic, cubic,

me
Exponential and logarithmic functions

so
1.1.3 Application of mathematical functions in solving business problems

w.
ww
1.2 Matrix Algebra
1.2.1 Definition
1.2.2 Types and operations (addition, subtraction, multiplication, transposition
and inversion of up to order 3x3)
1.2.3 Application of matrices; statistical modelling, Markov analysis, input-output
analysis and general applications

1.3 Calculus

1.4 Differentiation
1.4.1 Definition
1.4.2 Rules of differentiation (general rule, chain, product, quotient)
1.4.3 Differentiation of exponential and logarithmic functions
1.4.4 Turning points (maxima, minima and inflexion)
1.4.5 Application of differentiation to business problems

1.5 Integration
1.5.1 Definition
1.5.2 Rules of integration (general rule)
1.5.3 Integration of exponential and logarithmic functions
1.5.4 Applications of integration to business problems

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

 1.6 Descriptive Statistics
1.6.1 Measures of central tendency: mean: arithmetic mean, weighted arithmetic
mean; geometric mean, harmonic mean, median and mode
1.6.2 Measures of dispersion: range, quartile, deciles, percentiles, mean
deviation, standard deviation and coefficient of variation
1.6.2.1 Measures of skewness: Pearson’s coefficient of skewness, product
coefficient of skewness
1.6.2.2 Measures of kurtosis: Pearson’s coefficient of kurtosis, product
coefficient of kurtosis
2. Probability
2.1 Set Theory
2.2 Definition
2.3 Types of sets
2.4 Set description; enumeration and descriptive properties of sets
2.5 Venn diagrams (order - Venn diagrams precede operation of sets)
2.6 Operations of sets; union, intersection, complement and difference
2.7 Probability Theory and Distribution

om
.c
2.7.1 Probability Theory

ya
2.7.2 Definitions; event, outcome, experiment, sample space, probability space

en
2.7.3 Types of events: elementary, compound, dependent, independent,

ak
mutually exclusive, exhaustive, mutually inclusive

me
2.7.4 Laws of probability; additive and multiplicative laws

so
2.7.5 Conditional probability and probability trees

w.
2.7.6 Expected value, variance, standard deviation and coefficient of variation
using frequency and probability

ww
2.7.7 Application of probability and probability distributions to business problems
2.8 Probability Distributions
2.8.1 Discrete and continuous probability distributions Z, F, test statistics
(geometric, uniform, normal, t distribution, binomial, Poisson and
exponential and chi-square)
2.8.2 Application of probability distributions to business problems

3. Hypothesis Testing and Estimation

3.1 The arithmetic mean and standard deviation
3.2 Hypothesis tests on the mean (when population standard deviation is unknown)
3.3 Hypothesis tests on proportions
3.4 Hypothesis tests on the difference between two proportions using Z and t statistics
3.5 Chi-Square tests of goodness of fit and independence
3.6 Hypothesis testing using R statistical software

4. Correlation and Regression Analysis

4.1 Correlation Analysis
4.1.1 Scatter diagrams
4.1.2 Measures of correlation - product-moment and rank correlation coefficients
(Pearson and Spearman) using R software

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

5. Regression Analysis
5.1.1 Simple and multiple linear regression analysis
5.1.2 Assumptions of linear regression analysis
5.1.3 Coefficient of determination, standard error of the estimate, standard error of the
slope, t and F statistics

6. Time series
6.1 Definition of time series
6.2 Components of time series (circular, seasonal, cyclical, irregular/ random, trend)
6.3 Application of time series
6.4 Methods of fitting trend; freehand, semi-averages, moving averages, least-squares
methods
6.5 Models - additive and multiplicative models
6.6 Measurement of seasonal variation using additive and multiplicative models
6.7 Forecasting time series value using moving averages, ordinary least squares
method and exponential smoothing

om
7. Linear programming

.c
7.1 Definition of decision variables, objective function and constraints

ya
7.2 Assumptions of linear programming

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7.3 Solving linear programming using graphical method

ak
7.4 Solving linear programming using simplex method (basic scenarios)

me
so
8 Decision Theory

w.
8.1 Definition

ww
8.2 Decision-making process
8.3 Decision-making environment; deterministic situation (certainty)
8.4 Decision making under risk - expected monetary value, expected opportunity loss,
risk using the coefficient of variation, the expected value of perfect information
8.5 Decision trees - sequential decision, the expected value of sample information
8.6 Decision making under uncertainty - maximin, maximax, minimax regret, Hurwicz
decision rule, Laplace decision rule.
Sample Reading and Reference Material
1. Kothari, U. D. (2017). Quantitative Techniques in Business, Management and Finance: A
Case-Study Approach. CRC Press.
2. Taha, H. A. (2018). Operations Research: An Introduction. New Delhi: Pearson India.
3. Groebner, D., Shannon, P., & Fry, P. (2017). Business Statistics: A Decision-Making
Approach (10th edition). New York: Pearson.
4. Berenson, M., Levine, D., Szabat, K., & Stephan, D. (2018). Basic Business Statistics:
Concepts and Applications. New York: Pearson.
5. Kasneb e-learning resources (link on the Kasneb website).
6. Kasneb approved study packs.

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

PAPER NO. 6 INFORMATION COMMUNICATION TECHNOLOGY

UNIT DESCRIPTION

This paper is intended to equip the candidate with knowledge, skills and attitudes that will enable
him/her to apply information communication technology effectively in solving business problems,
decision making and in adapting to new working environments.

LEARNING OUTCOMES
A candidate who passes this paper should be able to:
• Demonstrate proficiency in decision making using contemporary information communication
technology tools
• Use various application packages to solve business issues
• Use data communication networks, the Internet and e-commerce in optimising business
opportunities
• Apply data security measures and procedures
•

om
Implement information systems legal, ethical and social issues.

.c
ya
Note to trainers: Trainers are advised to use a practical approach in offering tuition for this unit
through infusing practical demonstrations in a computerized environment.

en
ak
CONTENT

me
1. Introduction to information communication technology (ICT)

so
1.1 Introduction to information communication technology

w.
1.2 Computer hardware

ww
1.3 Computer software
1.4 Programming languages and tools
1.5 Information systems personnel and hierarchy
1.6 Role of ICT in business environments
1.7 Information centres
1.8 Impact of ICT in business

2. Overview of operating systems

2.1 Overview of an operating system
2.2 Functions of an operating system
2.3 Types of operating systems
2.4 Computer booting
2.5 Selection and acquisition of operating systems

3. An overview of application packages

3.1 Word processing
2.5.1 Features of a word processor
2.5.2 Formatting and editing text
2.5.3 Creating and formatting tables

2.6 Spreadsheets
2.6.1 Features of a spreadsheet program
2.6.2 Formatting and editing spreadsheet
2.6.3 Formulas
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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

 2.6.4 Functions; sum, average,min, max, IPMT, NPV,PMT,PV, VLOOKUP,
HLOOKUP, COUNT, IF, sumif
2.6.5 Charts and graphs
2.6.6 Working with pivot tables
2.6.7 Linking formulas in different worksheets
2.6.8 What if analysis; Goal seek and solver

2.7 Presentation software

2.7.1 Features of a presentation program
2.7.2 Typing and formatting text in slide
2.7.3 Slide show

2.8 Computerised accounting software

2.8.1 Capturing data
2.8.2 Features of accounting software

3 Computer networks

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3.1 Computer networks concepts

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3.2 Computer network hardware and software

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3.3 Data transmission media

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3.4 Types of computer networks

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3.5 Advantages and limitations of networking

me
3.6 Cloud computing concepts, features and models

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4.7 Internet of things (IoT)

w.
ww
4 The Internet
4.1 Introduction to the Internet
4.2 Applications of Internet
4.2.1 Using search engines
4.2.2 E-mails
5.2.3 Electronic communication
4.3 Internet services - e-mails, www, instant messaging
4.4 Internet service providers (ISPs)
4.5 Applications of internet
4.6 Online collaborative tools; cloud sheets and cloud documents
4.7 Impact of internet on society

5 Data security
5.1 Overview of data security
5.2 Threats and controls
6.3 Data backup and restoration procedures
6 Information systems in an enterprise
7.1 Overview of information systems
7.2 Components of an information system
7.3 Types and characteristics of information systems
7.4 Systems in a functional perspective
7.5 Enterprise applications and the business process integration

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

8 e-Commerce
8.1 e-commerce concepts and features
8.2 Models of e-commerce
8.3 Impact of the internet on business
8.4 E-commerce enabling software
8.5 Business opportunities in e-commerce
8.6 E-commerce infrastructure and platforms
8.7 E-commerce payments methods
8.8 Challenges of e-commerce
8.9 Securing e-commerce transactions
8.10 M-commerce and applications
8.11 Digital marketing methods
9. Mobile devices and applications
9.1 Overview of mobile computing
9.2 Types of mobile devices
9.3 Uses of mobile devices

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9.4 Overview of mobile applications

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9.5 Mobile browsers

ya
10. Systems analysis and design

en
10.1 Elements of information systems

ak
10.2 Systems theory

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10.3 Types of information systems

so
10.4 Personnel involved in systems analysis and design
10.5 Systems analysis and design concepts

w.
10.6 Systems development life cycle (SDLC)

ww
10.6.1 Definition of systems development life cycle
10.6.2 Phases of SDLC
10.6.3 Advantages and disadvantages of SDLC
10.7 Requirements elicitation
10.7.1 Stakeholder analysis
10.7.2 Need for requirements gathering
10.7.3 Process for requirements gathering
10.7.4 Requirements gathering tools and techniques
10.7.5 Gap analysis
10.7.6 Prioritisation of requirements
11. Legal, ethical and social issues in information systems
11.1 Information systems ethical and social concerns
11.2 The moral dimension of information systems
11.3 The legal issues in information systems
Sample reading and reference material
1. Tymann, P., & Reynolds, C. (2008). Schaum's Outline of Principles of Computer Science (Schaum's
Outlines. New York: McGraw-Hill.
2. Rainer, R. K., & Prince, B. (2020). Introduction to Information Systems (8th Edition). New Jersey: Wiley.
3. Vermaat, M. E., Sebok, S. L., Freund, S. M., Campbell, J. T., & Frydenberg, M. (2017). Discovering
Computers (2018): Digital Technology, Data, and Devices. Boston: Cengage Learning.
4. Kasneb e-learning resources (link on the Kasneb website).
5. Kasneb approved study packs.
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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

 INTERMEDIDATE LEVEL

PAPER NO. 7 COMPANY LAW

UNIT DESCRIPTION
This paper is intended to equip the candidate with knowledge, skills and attitudes that will enable
him/her to apply and comply with the provisions of Company Law in relevant circumstances and
environments and further to demonstrate knowledge of the law and regulations governing
corporate entities and ensure compliance in practice.

LEARNING OUTCOMES
A candidate who passes this paper should be able to:
• Apply legal principles relating to formation of companies
• Evaluate the rights and obligations of members and shareholders
• Comply with the legal principles governing liquidation of corporates
• Comply with the legal principles governing restructuring of companies

om
• Comply with the legal principles relating to companies incorporated outside the country

.c
• Comply with the legal requirements relating to the financing of companies.

ya
en
CONTENT

ak
1. Nature and classification of companies

me
1.1 Nature and characteristics of a company

so
1.2 Types of companies

w.
1.3 Principle of legal personality and veil of incorporation

ww
1.4 Distinction between companies and other forms of business associations sole
proprietorships, partnerships and cooperative societies.

2. Formation of companies
2.1 Promoters and pre-incorporation contracts and deeds.
2.2 Process and drafting documents required to form a company.
2.3 Rules relating to company names
2.4 Memorandum and articles of association
2.5 Certificate of incorporation
2.6 Effects of incorporation
2.7 Execution of a company’s documents
2.8 Alteration of status of companies

3. Membership of a company
3.1 Acquisition of membership
3.2 Register of members
3.3 Rights and liabilities of members
3.4 Cessation of membership
3.5 Register of a company’s beneficial owners
3.6 Derivative actions.

4. Shares
4.1 Classes of shares
4.2 Variation of class rights
4.3 Share certificates
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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

 4.4 Issue and allotment
4.5 Transfer and transmission
4.6 Transfer of shares under central depository system
4.7 Mortgaging and charging of shares

5. Share capital
5.1 Meaning and types of share capital
5.2 Raising of share capital
5.3 Prospectus/information memorandum
5.4 Maintenance of capital
5.5 Alteration and Consolidation of share capital
5.6 Dividends

6. Debt capital
6.1 Borrowing powers of a company
6.2 Company assets that can secure a company’s borrowings
6.3 Company debentures

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6.4 Company charges

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6.5 Meetings and resolutions in respect of debt capital

ya
6.6 Registration of charges

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6.7 Remedies for debenture holders

ak
me
7. Company meetings

so
7.1 Nature and classification of company meetings

w.
7.2 Types of company meetings held to execute various functions of company

ww
meetings
7.3 Methods of holding company meetings
7.4 Essentials of a valid physical, virtual and hybrid meeting Voting
7.5 Resolutions
7.6 Drafting resolutions
7.7 Protection of minority shareholders

8. Company Directors
8.1 Qualifications, appointment and disqualification
8.2 Powers and duties of directors
8.3 Removal and vacation of office
8.4 Register of directors
8.5 Remuneration of directors
8.6 Loans to directors
8.7 Compensation for loss of office
8.8 Disclosure of director’s interest in contracts
8.9 The rule in Turquand’s case/Indoor Management rule
8.10 Insider dealing

9. The Company Secretary

9.1 Qualification, appointment and removal
9.2 Powers and duties of the Company Secretary
9.3 Liability of the Company Secretary
9.4 Register of Secretaries

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

10. Auditors
10.1 Qualification, appointment and removal
10.2 Remuneration of auditors
10.3 Powers and duties
10.4 Rights and liabilities
11. Company accounts
11.1 Books of accounts
11.2 Form and content of accounts
11.3 Group accounts
11.4 Director’s report
12. Audit of Company Accounts
12.1 Auditor’s report
12.2 Annual returns
13. Company Investigation
13.1 Investigation of company affairs
13.2 Appointment and powers of inspectors

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13.3 Inspector’s report

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ya
14. Corporate restructuring

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14.1 Need for restructuring

ak
14.2 Mergers
14.3 Post - merger reorganisation of a company’s share capital

me
14.4 Takeovers and acquisitions

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14.5 Mergers and divisions of public companies

w.
14.6 Compromises, arrangements, reconstructions and amalgamations

ww
15. Receivership, Administration, Liquidation and Dissolution of companies
15.1 Meaning of receivership, administration and dissolution
15.2 Appointment and vacation of office by the Official Receiver
15.3 Powers and duties of a receiver
15.4 Termination of receivership
15.5 Appointment of an administrator
15.6 Functions and powers of an administrator
15.7 Process of administration
15.8 Termination of appointment and replacement of administrators
15.9 Company voluntary arrangements
15.10 Meaning of liquidation
15.11 Types of liquidation
15.12 Appointment, powers and duties of liquidators
15.13 Discharge of liquidators
15.14 Distribution of assets and dissolution of companies
16. Foreign Companies
16.1 Process of registering a company
16.2 Certificate of registration
16.3 Power to hold land
16.4 Registration of charges
16.5 Accounts of foreign companies
16.6 Service of process and notices on foreign companies
16.7 Returns

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

 16.8 Penalties
16.9 Cessation of business

Sample reading and reference material

1. Laibuta, K. I. (2017). A Handbook of Company Law (Revised edition). Nairobi: Law Africa
Publishing.
2. Nyasae, A. N. (2016). Corporate Secretarial Practice in Kenya Today. Nairobi: Law Africa
Publishing.
3. Nyasae, A. N. (2016). Meetings: Law and Procedure in Kenya Today. Nairobi: Law Africa
Publishing.
4. Kasneb e-learning resources (link on the Kasneb website).
5. Kasneb approved study packs.

om
.c
ya
en
ak
me
so
w.
ww

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

PAPER NO.8 FINANCIAL MANAGEMENT

UNIT DESCRIPTION
This paper is intended to equip the candidate with knowledge, skills and attitudes that will enable
him/her to effectively manage, control and optimize on institutional finances.

LEARNING OUTCOMES
A candidate who passes this paper should be able to:
• Explain the nature and scope of financial management
• Describe the nature and functions of financial institutions and markets
• Analyse the sources of finance for an organisation and evaluate various financing options
• Evaluate various investment decision scenarios available to an organisation
• Evaluate the performance of a firm using relevant financial tools
• Make appropriate capital structure decisions for a firm, Value financial assets and firms
• Make appropriate liquidity and dividend decisions for a firm
• Evaluate current developments in the field of finance and their impact on financial

om
decisions

.c
ya
CONTENT

en
1. Overview of financial management

ak
1.1 Theoretical framework of financial management - The role and responsibilities of

me
a finance manager towards shareholders, employees, society, government and
other stakeholders.

so
1.2 Goals of a firm and corporate strategy; financial and non-financial objectives,

w.
overlaps and conflicts among the objectives

ww
1.3 Agency theory, stakeholder’s theory and corporate governance
1.4 Measuring managerial performance, compensation and incentives
1.5 Ethical issues in financial management

2. The financing decision

2.1 Nature and objectives of the financing decision
2.2 Factors to consider when making financing decisions
2.3 Sources of finances for enterprises; internally generated funds and the externally
generated funds, long term sources (equity, debt, hybrids, lease finance, venture
capital, business angel finance, private equity, asset securitisation and sale,
Islamic finance and initial coin offerings), medium term sources such as medium
term loans and hire purchase financing and short term sources of finance such as
overdraft finance, trade credit, issue of commercial papers, accruals, deferred
income; characteristics of each source of finance, pros and cons of the various
sources of finance.
2.4 Evaluation of financing options
2.5 Methods of issuing ordinary shares - Public issue, private placement, bonus issue,
employee stock option plans (ESOPS) and rights issues

3. Financial institutions and markets

3.1 Overview of a financial system - Financial markets, financial institutions and
financial instruments

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

 3.2 Nature and role of financial markets - primary and secondary securities market,
money and the capital markets, over-the counter and organised market,
derivatives market, mortgage market, forex market
3.3 Nairobi securities exchange (NSE, or equivalent entity in other jurisdictions) - The
role and functions of the securities exchange, securities exchange terminologies,
security exchange listing and cross border listing, share indices, timing of
investment at the securities exchange, Central depository system and automated
trading system, de-mutualisation
3.4 Stock market indices
3.5 Central depository system and automated trading system
3.6 Timing of investment at the securities exchange - Dow theory and Hatch system
of timing
3.7 The financial institutions and intermediaries: commercial banks, savings and loans
associations and co-operative societies, foreign exchange bureaus, unit trusts and
mutual funds, insurance companies and pension firms, insurance agencies and
brokerage firms, investment companies, investment banks and stock brokerage
firms, micro-finance institutions and small and medium enterprises (SMEs)

om
3.8 Regulation of financial markets; Central bank of Kenya (CBK, or equivalent entity

.c
in other jurisdictions) - The role of the Central bank and the Monetary policy of the

ya
central bank; Capital market authority and the Insurance regulatory authority

en
3.9 Factors responsible for the rapid development of financial institutions and markets

ak
3.10 Risks facing financial institutions

me
so
4. Time-value of money

w.
4.1 Concept of time value of money

ww
4.2 Relevance of the concept of time value of money in financial management
4.3 Time value of money versus time preference of money
4.4 Time line
4.5 Real versus nominal cash flows
4.6 Compounding techniques - Compound interest, Future value (FV) of a single cash
flow and series of cash flows; Compounding of annuity cash flows
4.7 Discounting techniques - Present value (PV) of a future cash flow and series of
future cash flows and discounting of annuity cash flows
4.8 Loan amortisation and sinking funds

5. Business/Financial asset Valuation models

5.1 Concept of value; book value, going concern value, substitution value,
replacement value, conversion value, liquidation value, intrinsic value and market
value
5.2 Reasons for valuing financial assets/business
5.3 Theories on valuation of financial assets; fundamental theory, technical theory,
random walk theory and the efficient market hypothesis
5.4 Valuation of redeemable, irredeemable and convertible debentures/ corporate
bonds
5.5 Valuation of redeemable, irredeemable and convertible preference shares
5.6 Valuation of ordinary shares; net asset basis, price-earnings ratio basis,
capitalisation of earnings basis, Gordon’s model, finite earnings growth model,
Super-profit model, Walter’s model, discounted free cash flow, residual income
model, Use of relative measures such as Economic Value added (EVA) and
Market Value Added (MVA)
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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

 5.7 Valuation of rights issues
5.8 Valuation of unit trusts and mutual funds
5.9 Valuation of private companies: income and market-based approaches

6. Introduction to capital structure decisions

6.1 The meaning of capital structure and the factors to be taken into account when
making capital structure decision.
6.2 Cost of capital; Meaning of cost of capital, practical applications of cost of capital,
component costs of capital
6.3 The firm’s overall cost of capital; Weighted average cost of capital (WACC),
Weighted marginal cost of capital (WMCC) and factors influencing the firm’s Cost
of capital.
6.4 Leverage and Risk; Operating leverage and Operating risk, financial leverage and
financial risk and total leverage and total risk.
6.5 Analysis of Operating profit (EBIT), Earning per share (EPS) at the point of
indifference in the firm’s earnings; Determination of the range of firm’s operating
profit (EBIT) within which each financing option will be recommended

om
.c
7. Introduction to capital budgeting decisions

ya
7.1 The nature and importance of capital investment decisions

en
7.2 Capital budgeting process

ak
7.3 Capital investment’s cash flows - initial cash outlay, terminal cash flows and annual

me
net operating cash flows, incremental approach to cash flow estimation

so
7.4 Capital investment appraisal techniques

w.
7.5 Non-discounted cash flow methods - payback period and accounting rate of return

ww
7.6 Discounted cash flow methods - net-present value, internal rate of return,
profitability index, discounted payback period and modified internal rate of return
(MIRR)
7.7 Strengths and weaknesses of the investment appraisal techniques
7.8 Expected relations among an investment’s NPV, company value and share price
7.9 Capital investment options - timing option, strategic investment option,
replacement option and abandonment option
7.10 Problems/difficulties encountered when making capital investment decisions in
reality

8. Financial statements analysis and forecasting

8.1 Scope of financial statement analysis, major financial statements and other
information sources, financial statement analysis frame work and users of financial
statements and their information needs
8.2 Financial Statement analysis verses Business analysis
8.3 Techniques of financial Statement analysis; Cross-Sectional analysis, Time series
analysis and a combination of both techniques.
8.4 Types of financial statement analysis
8.5 Ratio analysis; nature of financial ratios, classification and calculation of financial
ratios and limitation of financial ratios
8.6 Common size statements - Vertical and horizontal analysis
8.7 Financial forecasting; cash budgeting and percentage of sales method of
forecasting

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

9. Working capital management
9.1 Introduction and concepts of working capital
9.2 Working capital versus working capital management
9.3 Factors influencing working capital requirements of a firm
9.4 Types of working capital
9.5 Importance and objectives of working capital management
9.6 Working capital operating cycle; the importance and computation of the working
capital operating cycle
9.7 Working capital financing policies: Aggressive, conservative and matching
financing policy
9.8 Determining the finance mix: basic approaches for determining an appropriate
Working Capital finance mix; Hedging or matching approach, conservative
approach, aggressive approach.
9.9 Management of inventory: kinds of inventory, objectives of Inventory Management,
Techniques of Inventory Management; stock levels, Economic Order Quantity
(EOQ) and Just-In-Time(JIT).
9.10 Cash Management; Motives of holding cash, techniques of managing cash, cash

om
management models-Baumol model, Miller-Orr model and Orgler’s model

.c
9.11 Management of accounts receivable and accounts payable; assessing

ya
creditworthiness, collecting amounts owing, trade credit

en
ak
10. Dividend decision

me
10.1 Meaning and significance of dividend policy

so
10.2 Factors influencing dividend policy

w.
10.3 Forms of dividend: script dividend, cash dividend, stock dividend, bond dividend,

ww
property dividend
10.4 Dividend theories; Bird in hand theory, Clientele effect theory, Information
signalling theory, Walter’s model, Gordon Model, Tax differential theory, Modigliani
and Miller dividend irrelevance theory
10.5 Types of dividend policy: regular dividend policy, stable dividend policy, irregular
dividend policy, zero dividend policy.
10.6 The impact of dividend payout on share price

11. Introduction to portfolio analysis

11.1 Introduction - Risk-return trade off/relationship, Distinction between risk free and
risky assets
11.2 Expected return, Standard deviation of returns and the Relative risk of an individual
asset
11.3 Expected return of a 2 asset-portfolio
11.4 The Covariance and correlation coefficient of returns of assets.
11.5 The actual portfolio risk of a 2-asset portfolio using the analytical and mathematical
model and its interpretation

12. Islamic finance

12.1 Justification for Islamic Finance; history of Islamic finance; capitalism; halal;
haram; riba; gharar; usury
12.2 Benefits and deficiencies of Islamic Finance
12.3 Principles underlying Islamic finance: principle of not paying or charging interest,
principle of not investing in forbidden items; ethical investing; moral purchases

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

 12.4 The concept of interest (riba) and how returns are made by Islamic financial
securities
12.5 Sources of finance in Islamic financing
12.6 Types of Islamic financial products:- sharia-compliant products: Islamic investment
funds; takaful the Islamic version of insurance Islamic mortgage, murabahah,
Leasing - ijara; safekeeping - Wadiah; sukuk - islamic bonds and securitisation;
sovereign - sukuk; Islamic investment funds; Joint venture - Musharaka, Islamic
banking, Islamic contracts, Islamic treasury products and hedging products,
Islamic equity funds; Islamic derivatives
12.7 International standardisation/regulations of Islamic Finance: case for
standardisation using religious and prudential guidance, National regulators,
Islamic Financial Services Board

13. Personal financial management

13.1 Financial Problems encountered in managing individual financial affairs
13.2 Savings and investment considerations
13.3 Personal risk management

om
13.4 Cost of credit

.c
13.5 Financial Alterations - Retirements; Estate and Tax planning and family budgeting

ya
en
14. Contemporary issues and emerging trends

ak
14.1 Globalisation and growth of derivative markets and securitisation

me
14.2 Cryptocurrency

so
14.3 Block chain technology

w.
14.4 Cloud funding

ww
14.5 Digitisation of financial transactions
14.6 Behavioural finance
14.7 Big data project finance

Sample reading and reference material

1. Pandey, I. M. (2015). Financial Management (11th edition). New Delhi: Vikas Publishing.
2. Damodaran, A. (2001). Corporate Finance: Theory and Practice (2nd edition). New York:
John Wiley & Sons Inc.
3. Mclaney, E. (2017). Business Finance: Theory and Practice (11th edition). Harlow: Pearson.
4. Brealey, R. A., Myers, S. C., & Allen, F. (2019). Principles of Corporate Finance (13th
edition). Boston: McGraw-Hill Education.
5. Kasneb e-learning resources (link on the Kasneb website).
6. Kasneb approved study packs.

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

PAPER NO. 9 FINANCIAL REPORTING AND ANALYSIS

UNIT DESCRIPTION
This paper is intended to equip the candidate with knowledge, skills and attitudes that will enable
him/her to account for more complex financial transactions and to prepare as well as analyse
financial statements in the private and public sectors.

LEARNING OUTCOMES
A candidate who passes this paper should be able to:
• Account for various assets and liabilities
• Prepare financial statements including published financial statements for various types of
organisations
• Account for specialised transactions
• Prepare group financial statements
• Analyse and interpret financial statements
• Apply International Financial Reporting Standards (IFRSs) and International Public Sector

om
Accounting Standards (IPSASs) in preparing non-complex financial statements.

.c
ya
CONTENT

en
1. Accounting for Assets and Liabilities [Assets and liabilities as covered in Financial
Accounting (Foundation Level) are also relevant here]

ak
1.1 Investment Property

me
1.2 Assets used in exploring for and evaluation of mineral resources

so
1.3 Non-current assets held for sale

w.
1.4 Financial Assets and Financial Liabilities (Recognition, Classification, Initial

ww
measurement, subsequent measurement, reclassifications and de-recognition)
1.5 Leases (Exclude Sale and Leaseback and dealers in leasing assets)
1.6 Current and Deferred tax
1.7 Government grants
1.8 Provisions, contingent liabilities and assets

2. Accounting for Specialized Transactions

2.1 Revenue recognition (Basic application of revenue recognition principles to Hire
Purchase, Consignment sales, construction contracts and joint arrangements)
2.2 Effects of changes in exchange rates (Only foreign currency denominated
transactions)
2.3 Borrowing Costs

3. Preparation of Financial Statements for different entities/Transactions

3.1 Conversion of a partnership into a company
3.2 Professional firms (Accountants, Lawyers, doctors, engineers)
3.3 Agricultural activities and farming
3.4 Pension plans
3.5 Cooperative Societies

4. Preparation of Published Financial Statements

4.1 Presentation of Financial Statements (Statement of Profit or Loss, other
comprehensive incomes, Statement of Financial Position and Statement of cash
flows)

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

 4.2 Accounting Policies, Changes in Accounting Estimates and Errors
4.3 Events after the Reporting Period
4.4 Discontinued Operations

5. Accounting and Financial Statements for Interests in Other Entities

5.1 Subsidiaries (Basic Consolidated Financial Statements with one subsidiary -
excluding disposals and statement of cash flows)
5.2 Associates and Joint ventures
5.3 Accounting treatment of investments in subsidiaries, associates and jointly
controlled entities in the financial statement of the investor (Separate financial
statements)
5.4 Branches (Only autonomous and local branches)

6. Public Sector Accounting Standards

6.1 Presentation of Financial Statements
6.2 Accounting Policies, Changes in Accounting Estimates and Errors
6.3 Effects of Changes in Foreign Exchange Rates

om
6.4 Revenue from exchange transactions and revenue from non-exchange

.c
transactions

ya
6.5 Property, plant and equipment, investment property and intangible assets

en
6.6 Provisions, contingent liabilities and contingent assets

ak
6.7 Presentation of budget information in Financial Statements

me
so
7. Analysing Financial Statements

w.
7.1 Analysing financial statements using ratios covered in Financial Accounting

ww
7.2 Analysing Financial Statements using common size approach for the statement of
profit or loss and statement of financial position

Sample reading and reference material

1. 1. McKeith, J., & Collins, B. (2013). Financial Accounting and Reporting (2nd edition).
McGraw-Hill Education.
2. Elliott, B., & Elliott, J. (2019). Financial Accounting and Reporting (19th edition). Harlow:
Pearson.
3. Cotter, D, (2012) Advanced Financial Reporting: A Complete Guide to IFRS. Harlow.
Financial Times / Prentice Hall.
4. Kasneb e-learning resources (link on the Kasneb website).
5. Kasneb approved study packs.

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

PAPER NO. 10 AUDITING AND ASSURANCE

UNIT DESCRIPTION
This paper is intended to equip the candidate with knowledge, skills and attitudes that will enable
him/her to conduct the audit of an entity.

LEARNING OUTCOMES
A candidate who passes this paper should be able to:
• Demonstrate an understanding of the regulatory framework governing the external audit
of financial statements
• Demonstrate an understanding of International Standards on Auditing where appropriate
and the International Code of Ethics for Professional Accountants (including International
Independence Standards)
• Implement the process of planning an audit, prepare audit programs and effectively
conduct an audit
• Undertake audit risk assessments (excluding group accounts)

om
• Apply the risk based audit approach to audit of limited companies

.c
• Prepare non - complex audit reports for audit engagements.

ya
en
CONTENT

ak
1. Nature and purpose of an audit

me
1.1 Nature and objectives of an audit

so
1.2 Development of audit (early audit and modern audit)

w.
1.3 Users of audited financial statements

ww
1.4 Features of audits
1.5 Distinction between auditing and accounting
1.6 Types and classification of audits
1.7 Situations when different audits are performed (interim, continuous, final,
operational)
1.8 Advantages and disadvantages of various types of audits
1.9 Nature of work done for different audits
1.10 Inherent limitations of an audit

2. Assurance and non- assurance engagements

2.1 Definition and objectives of assurance engagements
2.2 Audit as an assurance engagement
2.3 Elements of an assurance engagement
2.4 Types of assurance engagements (Audit, Review assignments)
2.5 Differences between audit and review engagements
2.6 International Standard on Assurance Engagement-ISAE 3000
2.7 Accepting appointment to perform assurance engagement
2.8 Review of interim financial information - ISRE 2410
2.9 Levels of assurance and reports issued on assurance engagements
2.10 Non-assurance engagements (Agreed upon procedures engagement -ISRS 4400
and compilation assignments-ISRS 4410
2.11 Attestation and direct reporting engagements

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

3. Legal and professional framework
3.1 Regulatory framework for external audits
3.1.1 Appointment of the auditors
3.1.2 Qualifications and disqualifications of auditors
3.1.3 Removal and resignation of auditors
3.1.4 Remuneration of the auditors
3.1.5 Rights and duties of auditors
3.1.6 Mechanisms of regulations of auditors-role of professional bodies, Audit
committee, rotation of audit firms
3.2 Professional ethics/code of ethics for professional accountants
3.2.1 Importance of the professional ethics
3.2.2 Basic/fundamental principles for Code of Ethics for accountants
3.2.3 Other professional guidelines on audit fees, conflict of interest, advertising
and publicity and opinion shopping by clients
3.2.4 Auditors independence /objectivity and its importance
3.2.5 Threats to independence and safeguards.

om
3.3 Threats on adherence to other fundamental principles and safeguards to the
threats

.c
3.4 Development and status of ISAs in execution of audits

ya
3.5 Relationship between International Standards of Auditing and National Auditing

en
Standards

ak
3.6 Purposes/importance of adoption of ISA in the audit.

me
so
4. Planning and Risk Assessment

w.
4.1 Obtaining, accepting and retention of an audit engagement

ww
4.1.1 Matters to consider before and after acceptance of nomination
4.1.2 Pre-conditions of an audit
4.1.3 Engagement letter, procedure of sending letter, purposes and contents of
the letter-ISA 210
4.1.4 Circumstances for revision of engagement terms
4.1.5 Understanding the entity and its environment
4.1.5.1 Background information about the entity or client.
4.1.5.2 Ways of gathering knowledge about the business
4.1.5.3 Reasons/importance of information gathered about the client
4.1.5.4 Reasons of review of previous audit files and communication
with previous auditors
4.1.6 Overview of audit process

5. Audit risk assessment

5.1 Components of audit risk (Inherent, Control and Inherent risks)
5.2 Assessment of different types of audit risks
5.3 Factors leading to increase or decrease of inherent, control and detection
Risks
5.4 Adoption of risk based audit, reasons and procedure
5.5 Advantages and Disadvantages of the approach
5.6 Evaluating and prioritising risk and control factors
5.7 Mechanisms to minimise the risks associated with client audits.

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

6. Audit planning
6.1 Purpose and challenges in audit planning
6.2 Planning for new and existing clients
6.3 Development of the overall audit strategy
6.4 Contents of audit planning memorandum/ overall plan
6.5 Relationship between audit strategy and audit plan
6.6 Design of audit programs, importance and problems of the programs
6.7 Impact of material misstatements on audit strategy and degree of work done
6.8 Influence of interim audit work on the year end/final audit.

7. Audit documentation
6.1 Reasons and importance of audit documentation
6.2 Sources, features and purposes of working papers
6.3 Storage of working papers-permanent audit file and current audit file, auditors note
book or diary
6.4 Lien or custody on working papers
6.5 Standardisation of working papers - advantages and disadvantages

om
6.6 Safe custody and retention of working papers

.c
6.7 Form and content of working papers

ya
6.8 Automated working papers

en
6.9 Quality control policies and procedures implemented by audit firm

ak
6.10 Objectives of quality controls to the audit firm/ auditors

me
6.11 Peer review and its objectives

so
w.
8. Internal control systems and Internal Audit Function

ww
8.1 Internal control systems (ICS)
8.1.1 Objectives of internal control system
8.1.2 Component of internal control system
8.1.3 Features of Internal control system
8.1.4 Designing of internal control system.
8.1.5 Auditors and management responsibility over ICS
8.1.6 Advantages and disadvantages /inherent limitations of ICS
8.1.7 Indicators of weaknesses in ICS and actions taken by management
8.1.8 The evaluation of internal control systems by auditors using Internal
Control Questionnaire, Flow charts and narrative notes
8.1.10 Tests of controls on specific control environments
8.1.11 Internal controls theory and practice-sales and debtors, purchases and
creditors, inventories and work in progress, fixed assets, salaries and
wages
8.1.12 Communication of improvements on ICS weaknesses/ risks associated
- Management letter.

9. Internal Audit Function

9.1 Scope and objectives of internal audit
9.2 Criteria of using internal audit work
9.3 Areas of support on external auditors’ work
9.4 Internal audit review reports and actions by management and those charged with
governance
9.5 Design of risk based internal audit plan
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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

 9.6 Internal audit key performance indicators
9.7 Managing and monitoring follow up of audit recommendations made to board/
management.
9.8 Outsourcing internal audit function-advantages and disadvantages.
9.9 Audit committee-functions, merits and demerits.
9.10 Internal check systems-scope, features, advantages and disadvantages
9.11 Information technology threats and control
9.12 Auditors duty on compliance with laws and regulations.

10. Overview of Forensic Accounting, Errors, Frauds and Irregularities

10.1 Overview of forensic accounting
10.1.1 Nature, purpose and scope of forensic accounting
10.1.2 Types of forensic investigations: corruption, asset misappropriation,
financial statement fraud, others
10.1.3 Asset Recovery process and legal framework

om
11. Errors, Frauds and Irregularities

.c
11.1 Differences between error and frauds

ya
11.2 Types of errors-omission, commission, principle, reversal of entries

en
11.3 Types of Frauds-Teeming and lading, ghost employees, window dressing,

ak
misappropriation of goods and fraudulent financial reporting

me
11.4 Causes of frauds and fraud triangle

so
11.5 Indicators of errors and frauds
11.6 Detection and prevention of errors and frauds and deterrence-role of internal

w.
audit

ww
11.7 Materiality and Implications of errors and frauds in the financial statements
11.8 Impact of errors and frauds on the audit plan
11.9 Reporting on error and frauds
11.10 External auditors and Management responsibility on error and frauds
11.11 Auditors professional skepticism.
12. Audit evidence
12.1 Financial statement assertions and audit evidence
12.2 Types and features of audit evidence (sufficiency, reliability and relevance)
12.3 Audit evidence gathering procedures/ techniques
12.4 Materiality and limitations of audit evidence
12.5 Financial statement assertions and audit evidence
12.6 Audit sampling techniques - statistical and non-statistical
12.7 Analytical reviews procedures- nature, objectives, timing and extent of support
evidence
12.8 Types of analytical Procedures-Variance analysis, reasonableness tests, trend
analysis
12.9 Using the work of experts- areas of support and considerations
12.10 Using management representations (importance, procedures adopted and
matters covered).

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

13. Auditing in the public sector
13.1 Introduction to auditing in the public sector and regulatory provisions
13.2 Objective and scope of public sector audit (compliance, performance, financial,
value for money)
13.3 Establishment, mandate and functions of public sector auditors
13.4 The parties to audit in public sector-auditor, responsible party and intended users
13.5 Role of internal audit function in public entities
13.6 Relationship between external and internal auditors in the public sector
13.7 Audit reports by office of Auditor General.
13.8 Functions of audit advisory board and executive committee in Auditor General
office.
14. Auditors Reports
14.1 Purposes of auditors’ report and concept of true and fair view
14.2 Legal /Statutory provisions on audit reports
14.3 Basic elements contents of audit reports
14.4 Emphasis of the matter paragraph and key audit matters

om
14.5 Types and Consequences of different types of audit reports issued.

.c
14.6 Features of unqualified and qualified audit reports

ya
14.7 Reasons for qualifications of audit reports (Limitation of scope, inherent

en
uncertainties, disagreements)

ak
14.8 Types of qualifications-disclaimer, except for and adverse opinions.

me
14.9 Overall audit review and finalisation

so
14.10 Subsequent events/Post balance sheet events review (adjusting and non -

w.
adjusting events, auditor’s responsibility and audit procedures)

ww
14.11 Going concern review (Auditors and management responsibility, indicators of
going concern difficulties, audit procedures, mitigation plans and reporting)
14.12 Management representations on contentious matters affecting financial
statements like guarantees made, capital commitments, borrowings, unusual
accounting adjustments.
14.13 Review of compliance with accounting policies, opening balances, prior period
audits by other auditors
14.14 Format for presentation of independent auditor’s report.

15. Auditing in a computerised system

15.1 Audit objectives in computerised systems
15.2 Differences between computerised and manual systems
15.3 Benefits and drawbacks of computerised accounting systems
15.4 Types of controls in computerised systems (Administrative, system development,
processing controls, application controls, master files and standing data
15.5 Auditors use of computers in the course of audit
15.6 Planning the audit in computerised systems
15.7 Audit approaches - audit around, with and through the computer and
circumstances when each is applied
15.8 Loss of audit trail, causes and measures to mitigate the loss of audit trail
15.9 Computer Assisted Audit Techniques (CAATS) - Audit software and test data
15.10 Types of audit software and functions and types of test data
15.11 Factors considered before using CAATS and steps in CAATS application
15.12 Advantages and disadvantages of CAATS
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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

 15.13 Use of embedded audit modules and integrated test facilities
15.14 Information security controls (Encryption, Firewalls, Passwords, Antivirus)

16. Contemporary and emerging issues in audit

16.1 E- commerce auditing
16.2 Cloud documentation
16.3 Use of data analytics tools in audit (Anomaly detection, diagnostic analysis,
predictive analysis.

Sample Reading and Reference Material

1. Kumar, R., & Sharma, V. Fundamentals of Practical Auditing. Revised Edition. New
Delhi: Prentice Hall India.

2. Millichamp, A., & Taylor, J. (2018). Auditing (11th edition). Cengage Learning EMEA.
3. Johnstone-Zehms, K. M., Gramling, A. A., & Rittenberg, L. E. (2018). Auditing: A Risk-

om
Based Approach to Conducting Quality Audits. Australia: South-Western / Cengage

.c
Learning.

ya
4. Whittington, R., & Pany, K. (2021). Principles of Auditing & Other Assurance Services

en
(21st edition). New York: McGraw-Hill Education.

ak
5. Arens, A., Elder, R., Beasley, M., & Hogan, C. (2016). Auditing and Assurance Services

me
(16th edition). Boston: Pearson.

so
6. Kasneb e-learning resources (link on the Kasneb website).

w.
7. Kasneb approved study packs.

ww

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

PAPER NO. 11 MANAGEMENT ACCOUNTING

UNIT DESCRIPTION
This paper is intended to equip the candidate with knowledge, skills and attitudes that will enable
him/her to apply the principles of cost estimation and cost and management accounting
techniques and methods for decision making.

LEARNING OUTCOMES
A candidate who passes this paper should be able to:
• Estimate the cost of goods and services
• Analyse product costs for manufacturing and non-manufacturing activities
• Prepare marginal and absorption cost statements
• Analyse an organisation’s activities through budgetary control process
• Analyse variances for decision making

CONTENT

om
1. The context of management accounting:

.c
1.1 Definition and scope of Cost and Management accounting

ya
1.2 Role of Management Accounting in decision making
1.3 Users of Management accounting information

en
1.4 Cost accounting as a subset of management accounting

ak
1.5 Management accounting and financial accounting

me
1.6 Difference between management accounting and financial accounting

so
1.7 Relationship between Management accountant and other managers

w.
1.8 Limitations of management accounting

ww
2. Costing terms and concepts
2.1 Cost definition and identification
2.2 Cost classification
2.3 Cost classification bases; by time; by behaviour; by function; identification with
stock; by relevance for decision making; by management control
2.4 Types of cost systems
2.5 Maintaining a cost database

3. Introduction to cost estimation

3.1 Non-mathematical methods
3.1.1 Accounts Analysis method
3.1.2 High-Low method
3.1.3 Industrial Engineering method
3.2 Mathematical methods
3.2.1 Scatter graph method
3.2.2 Ordinary Least Square method (simple regression only)

4. Cost accumulation
4.1 Accounting for direct material cost
4.1.1 Introduction to Material costing
4.1.2 Objectives of material control
4.1.3 Essential requirements of material control system
4.1.4 Centralised and decentralized purchasing

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

 4.1.5 Periodic inventory system
4.1.6 Perpetual inventory system
4.1.7 Setting stock levels
4.1.8 Factors influencing stock levels
4.1.9 Relevant cost for inventory management
4.1.10 The Economic Order Quantity

4.2 Valuing inventory issues using FIFO, LIFO, standard cost method, weighted
average, simple average and replacement cost method
4.3 Accounting for direct labour cost
4.3.1 Methods of labour remuneration
4.3.2 Bonus schemes
4.3.3 Factors influencing wages
4.4 Accounting for overhead cost
4.4.1 Overhead apportionment
4.4.2 Primary overhead distribution
4.4.3 Secondary overhead distribution methods (continuous allocation method,

om
algebraic method, direct allocation method, sequential allocation method)

.c
4.4.4 Absorption of overheads

ya
en
5. Activity based costing

ak
5.1 Meaning of activity-based costing

me
5.2 Distinction between activity-based costing and the Traditional absorption costing

so
5.3 Classification of cost drivers

w.
5.4 The hierarchy of cost drivers

ww
5.5 Overhead absorption rates - ABC
5.6 Income statements - one unit
5.7 Income statement - total output/sales

6. Product costing methods

6.1 Introduction to costing methods
6.2 Specific order costing; Job order costing; Batch costing
6.3 Continuous operation costing; Process costing (normal process losses; abnormal
process losses/gains); treatment of closing work in progress; treatment of opening
work in progress (FIFO and Weighted Average cost methods); Process costing for
joint products and by-products; distinction between joint-products and by-products
6.4 Service costing

7. Marginal and absorption costing

7.1 Differences between marginal costing and absorption costing
7.2 comparative income statements
7.3 Arguments for the use of marginal costing
7.4 Arguments for the use of absorption costing
7.5 Reconciliation statement

8. Cost-volume profit analysis (break-even analysis)

8.1 Introduction to C-V-P analysis
8.2 Assumptions of C-V-P analysis
8.3 Break-even chart
8.4 Profit-volume chart
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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

 8.5 Single product C-V-P analysis
8.6 Multiple product C-V-P analysis
8.7 Limitations of C-V-P Analysis
8.8 Applications of marginal costing in decision making (make/buy decisions;
discontinue a product; choice of a product where limiting factor exists; acceptance
of a special offer); overriding considerations to the above decisions

9. Budgetary control
9.1 Introduction to budgets
9.1.1 Essential features of a budget
9.1.2 Objectives of budgetary control
9.1.3 Difference between forecasts and budgets
9.2 Types of budgets
9.2.1 Classification based on time (long-term budgets, short-term budgets and
current budgets)
9.2.2 Classification based on functions (functional/subsidiary budgets, master
budgets)

om
9.2.3 Classification based on capacity (fixed budgets, flexible budgets)

.c
9.3 Preparation of budgets

ya
9.3.1 Functional budgets including cash budget and master budget

en
9.3.2 Fixed and flexible budgets

ak
me
10. Standard costing and variance analysis

so
10.1 Introduction

w.
10.1.1 Types of standards (basic standards, ideal standards, attainable

ww
standards)
10.1.2 Advantages and disadvantages of standard costing
10.2 Variance analysis
10.2.1 Material cost variances (usage variance, price variance)
10.2.2 Labour cost variances (efficiency variance, rate variance)
10.2.3 Variable overhead variances (expenditure variance, efficiency variance)
10.2.4 Fixed overhead variances (expenditure variance, capacity variance,
efficiency variance and volume variance)
10.2.5 Sales variances
10.3 Causes of the various variances and remedies

Sample reading and reference material

1. Tayles, M., & Drury, C. (2020). Management and Cost Accounting (11th edition). Cengage
Learning EMEA.
2. Arora, M. N. (2013). Cost Accounting: Principles & Practice (12th edition). New Delhi:
Vikas Publishing.
3. Storey, R. (1995). Introduction to Cost and Management Accounting. New York: Palgrave
Macmillan.
4. Kasneb e-learning resources (link on the Kasneb website).
5. Kasneb approved study packs.

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

PAPER NO. 12 PUBLIC FINANCE AND TAXATION

UNIT DESCRIPTION
This paper is intended to equip the candidate with knowledge, skills and attitudes that will enable
him/her to apply public financial management principles, implement public financial management
regulations at middle management levels and to prepare non-complex tax computations for
individuals and corporates.

LEARNING OUTCOMES
A candidate who passes this paper should be able to:
• Apply public financial management requirements in practice in non-complex environments
in both the public and private sectors
• Compute taxes for various individuals and entities
• Apply the written taxation laws in addressing various tax issues
• File tax returns
• Undertake non-complex tax reviews.

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CONTENT

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1. Introduction to Public Financial Management

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1.1 Nature and scope of public finance

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1.2 Sources of public finance

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1.3 Objectives of the Public Financial Management Act and Financial regulations

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1.4 Budget process for national, county and public entities, Development plan

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preparation, Treasury circulars, Cash flow projections, Budget estimates and

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revenue raising measures.
1.5 Role of the National Treasury and County Treasuries with respect to the
management and control of public finance.

2. Relationship between National and County Governments on budget and economic

matters
2.1 The process of sharing revenue between national and county governments and
among the county governments: Factors considered and formula used
2.2 Division of revenue bill and county allocation of revenue bill
2.3 The role of the Commission on Revenue on Allocation (COR)
2.4 The role of the Council of Governors in county financial management
2.5 National Government public funds: The Consolidated Fund; The Contingency
fund; The Equalisation fund and Other National Government public funds
2.6 County Government public funds; County Revenue Fund; County Government
Emergency Funds and other county public funds
2.7 County government revenue sources.
3. Oversight Function in Public Finance Management
3.1 The role of National Assembly: Responsibilities of the National Assembly budget
committee in public finance matters
3.2 The role of Senate: Responsibilities of the Senate budget committee in public
finance matters
3.3 The role of Parliamentary Budget Office
3.4 The role of Auditor General
3.5 The role of Internal Audit
3.6 Role of Controller of Budget
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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

 3.7 The role of public sector accounting standards board
4. Procurement in public entities
4.1 Introduction to Public Procurement and Disposal (PPD) Act
4.2 Procurement guidelines as envisaged by PPD Act
4.3 Procurement process by National, County and other public entities: The role of the
National Treasury, Public Procurement Regulatory Authority and Public
Procurement Administrative Review Board
4.4 Tendering process and selection of suppliers in public sector
4.5 Concept of e-procurement

5. Public Private Partnerships Arrangements

5.1 Rationale and justification for Public Private Partnerships
5.2 Establishment of Public Private Partnerships (PPP) Unit in the National Treasury
5.3 Contract/project agreements, guidelines and standards
5.4 Composition and role of PPP petition committee
5.5 Establishment and role of PPP project facilitation fund

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6. Public Debt Management

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6.1 Establishment of debt management office

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6.2 Objectives of debt management in public sector

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6.3 Sources of public debt in Kenya

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6.4 Management of debts by county governments and other public entities

me
6.5 Role of the Cabinet Secretary of the National Treasury in public debt management

so
6.6 Measures that can be adopted to reduce public debt

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7. Introduction to Taxation
7.1 Definition of Tax, Taxation and Types of taxes in Kenya
7.2 History of taxation
7.3 Classification of taxes; Tax shifting and Factors that determine tax shifting
7.4 Principles of an optimal tax system
7.5 Types of tax systems; Single versus multiple tax systems
7.6 Purposes of taxation/Why the government levy taxes
7.7 Tax evasion and tax avoidance
7.8 Taxable capacity
7.9 Budgetary and Fiscal policies
7.10 The Revenue Authority; Structure, Functions, Large and Medium Taxpayers Office
mandate

8. Taxation of Income
8.1 Introduction
8.1.1 Basis of charging tax in Kenya: Section 3 of the Income Tax Act
8.1.2 Concept of residency and Criteria of taxing income in Kenya.
8.1.3 Taxable and non-taxable persons
8.1.4 Specified Sources of income
8.1.5 Incomes exempted from taxation
8.2 Taxation of Employment income
8.2.1 Taxable cash and non-cash benefits/rewards received from employment
8.2.2 Non-taxable cash and non-cash benefits/rewards received from
employment
8.2.3 Allowable deductions against employment income
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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

 8.2.4 Tax credits (withholding tax, personal and insurance relief, others)
8.2.5 Taxation of lumpsum payment for services rendered and services that
would have been rendered; Gratuity, terminal dues, compensation for loss
of office.
8.2.6 Operations of PAYE systems: Preparation of PAYE returns, categories of
employees, multiple sources of income, irregularly paid employees, casual
workers, PAYE audit and triggers
8.2.7 Other Statutory deductions (NSSF and NHIF)
8.2.8 All these should be illustrated with relevant computations including PAYE
computations

8.3 Taxation of Business Income

8.3.1 Introduction to taxation of business income including criteria of taxing
business income
8.3.2 Income Tax Act provisions on computation of business income
8.3.3 Allowable and disallowable business expenses and taxable business
income

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8.3.4 Taxable business income and tax payable computations in respect of:

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8.3.4.1 Sole proprietorship

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8.3.4.2 Partnerships (excluding admissions, retirement of partners

en
and conversions)

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8.3.4.3 Incorporated entities (excluding specialised institutions)

me
8.4 Taxation of rental income and royalties

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8.5 Taxation of Farming income

w.
8.6 Taxation of Investment income (Dividend and interest income)

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8.7 Turnover tax and Minimal tax
8.8 Taxation of Capital gains
8.9 Taxation of Digital income; digital service tax and Digital service tax agents
8.10 Withholding Tax
8.10.1 Income subject to withholding tax (Dividends, Interest, management and
profession fees, royalties)
8.10.2 Withholding Tax Rates on Residents and non-residents
8.10.3 Introduction to Double Tax Agreements and the impact on withholding tax
payments
All the above should be illustrated with relevant basic computations.

9. Investment Allowances/deductions
9.1 Introduction to capital allowances and Rationale for capital deductions
9.2 Types of capital allowances; Theory and computations
9.3 Investment deductions; Ordinary manufacturers
9.4 Industrial building deductions
9.5 Wear and tear allowances
9.6 Farm works deductions
9.7 Shipping investment deduction
9.8 Other deductions
All the above should be illustrated with relevant computations

10. Administration of Income Tax and Tax Procedures

10.1 Registration and deregistration of tax payers
10.2 Personal identification number: Issue, uses, cancellation of a PIN
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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

 10.3 Taxpayer's tax representative: Appointment, liabilities and obligations
10.4 Tax Returns and Assessments: Self-assessment, Default assessment, Advance
assessment, Amendment of assessments
10.5 Collection, recovery and refund of taxes
10.6 Tax Decisions, Objections, Appeals and Relief of mistakes
10.7 Voluntary Tax Disclosure Program
10.8 Administrative penalties and offences
10.9 Application of ICT in taxation: Practical use of iTax to file the returns

11. Administration of Value Added Tax (VAT)

11.1 Introduction to VAT, Basis of charging VAT and VAT rates
11.2 Rights and obligations of VAT taxable person
11.3 Registration and deregistration of businesses for VAT
11.4 Key terms in VAT: Input tax, Output tax, Supply, Time of supply/Tax point and
Taxable value of a supply/Value for VAT supported with relevant calculations
11.5 Deduction of input tax
11.6 Accounting for VAT and VAT records

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11.7 Taxable and non-taxable supplies: Zero rated supplies, Exempt goods and exempt

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services including restriction of input tax claim.

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11.8 Privileged persons and institutions

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11.9 Withholding VAT and withholding VAT agents

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11.10 VAT returns and assessments including VAT Auto Assessments

me
11.11 Remission, rebate and refund of VAT

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11.12 Changes to be notified to the commissioner

w.
11.13 Offences, fines, penalties and interest

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12. Customs Taxes and Excise Taxes
12.1 Purpose of customs and excise duties
12.2 Imposition of customs duty
12.3 Customs procedure
12.4 Bonded warehouse and bond securities
12.5 Goods subject to customs control
12.6 Refund of duty
12.7 The Simba System/Integrated Customs Management System
12.8 Imposition of excise duty
12.9 Excisable goods under excise control
12.10 Application for excise duty (licensing), issue of licences, Suspension and
Cancellation of Licences
12.11 Excise stamps and Excisable goods management system
12.12 Refund of excise duty
12.13 Excise duty returns and payments
12.14 Offences and penalties

13. Miscellaneous fees and levies

13.1 Export levy
13.2 Import Declaration fee (IDF)
13.3 Railway Development Levy (RDL)
13.4 Stamp duty
13.5 Catering levy
13.6 Motor vehicle advance tax
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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

 13.7 Betting, Lotteries & Gaming taxes

Sample reading and reference material

1. NCLR (2009). Laws of Kenya: East African Community Customs Management Act, 2004.
2. NCLR (2017). Laws of Kenya: Excise Duty Act No. 23 Of 2015
3. NCLR (2018). Laws of Kenya: Income Tax Act
4. NCLR (2012). Laws of Kenya: The Public Finance Management Act
5. NCLR (2018). Laws of Kenya: Tax Procedures Act of 2015
6. NCLR (2018). Laws of Kenya: Value Added Tax Act of 2013
7. Kasneb e-learning resources (link on the Kasneb website).
8. Kasneb approved study packs.
9. Sample text books by local authors

om
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ya
en
ak
me
so
w.
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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

 ADVANCED LEVEL

PAPER NO.13 LEADERSHIP AND MANAGEMENT

UNIT DESCRIPTION
This paper is intended to equip the candidate with knowledge, skills and attitudes that will enable
him/her to apply and demonstrate leadership and management skills to grow an enterprise under
various circumstances and environments including under uncertainties.

LEARNING OUTCOMES
A candidate who passes this paper should be able to:
· Demonstrate an understanding of leadership techniques and management principles
· Apply knowledge of leadership and management theories in organizations
· Effectively undertake management functions
· Make rational management decisions in an organisational context

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· Embrace and manage strategic change.

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ya
CONTENT

en
1. Introduction to management

ak
1.1 Nature of management

me
1.2 Importance of management

so
1.3 Levels of management

w.
ww
1.4 Multi-disciplinary nature of management
1.5 Roles of management as advocated by Henry Mintzberg
1.6 The changing roles of management and managers
1.7 Qualities of an effective manager
1.8 Management and administration

2. Evolution and development of management thought

2.1 Classical approaches to management
2.1.1 Taylor’s view point
2.1.2 Fayol’s administrative theory
2.1.3 Max Weber’s bureaucratic theory

2.2 Behavioural management approach

2.2.1 Elton Mayo-Human relation theory
2.2.2 Abraham Maslow’s theory
2.2.3 McGregor’s X and Y theories
2.2.4 Mary Parker Follett’s Management theory

2.3 Modern management theories

2.3.1 Quantitative thinking
2.3.2 Systems thinking
2.3.3 Contingency thinking
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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

 3. Leading as a function of management
3.1 Differences between management and leadership
3.2 Attributes and skills of a good leader
3.3 Delegation, responsibility and accountability
3.4 Power, authority and accountability

4. Other Functions of management

4.1 Planning function:

4.1.1 Introduction to planning
4.1.2 Importance of planning
4.1.3 Planning process
4.1.4 Types of plans
4.1.5 Approaches to planning

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4.2 Organising function

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4.2.1 Meaning and importance of organising

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4.2.2 Factors affecting the organising function

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4.2.3 Process of organising

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4.2.4 Principles of organising

w.
4.2.5 Organisational structures

4.3 Staffing function

4.3.1 Meaning and importance of staffing
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4.3.2 Staffing process
4.3.3 Factors that affect the staffing function
4.3.4 Components of the staffing function

4.4 Controlling function

4.4.1 Meaning and importance of control
4.4.2 Steps in the control process
4.4.3 Types of control
4.4.4 Controlling for organisational and employee performance
4.4.5 Tools for measuring performance
4.4.6 Essentials of an effective control system

5. Environmental Analysis
5.1 Micro-environment
5.2 Macro-environment
5.3 Internal environment
5.4 External environment
5.5 Tools of environmental analysis
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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

 6. Leadership approaches and strategy

6.1 Leadership traits

6.2 Leadership styles
6.3 Leadership skills
6.4 Formulation of an organisation’s strategic direction
6.5 Differences between transactional leadership and transformational leadership
6.6 Conflict resolution mechanisms
6.7 Ethics in leadership

7. Decision making
7.1 Importance of decision making
7.2 Decision making models/approaches
7.3 Types of decisions
7.4 Decision making process

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7.5 Problem solving skills

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7.6 Decision making under different conditions

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7.7 Challenges in decision making

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7.8 Effective decision making

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me
8. Enterprise management

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8.1 Meaning and concept of entrepreneurship

w.
8.2 Intrapreneurship

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8.3 Entrepreneurial development
8.4 Enhancing creativity and innovation in organisations
8.5 Methods of generating ideas
8.6 Introduction to business plan
8.7 Protection of intellectual properties

9. Project management
9.1 Project management concepts
9.2 Characteristics of a project
9.3 Importance of projects
9.4 Features of projects and baseline surveys
9.5 Illustration of the Project life cycle
9.6 Project planning and organising
9.7 Project resources and costing
9.8 Project completion and evaluation

10. Marketing management

10.1 Meaning and importance of marketing
10.2 Marketing management orientation/philosophies
10.3 Marketing mix
10.4 Development of marketing information
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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

 10.5 Marketing strategies
10.6 Marketing research and intelligence
10.7 International marketing and e-commerce

11. Leadership and Strategic Change

11.1 Meaning of change
11.2 Theories of change
11.3 Types of organisational change
11.4 Managing resistance to change
11.5 Diagnosing the change context
11.6 Levers for strategic change
11.7 Methods of introducing strategic change
11.8 Problems of formal change programmes
11.9 Leading Change

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12. Case Studies in Leadership and Management

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en
Sample reading and reference material

ak
me
1. Cole, G. A., & Kelly, P. (2020). Management Theory & Practice (9th edition). Cengage

so
Learning.

w.
2. Robbins, S. P., & Coulter, M. A. (2021). Management (15th edition). New Delhi: Pearson

ww
India.
3. Robbins, S. P., Coulter, M., & Decenzo, D. A. (2017). Fundamentals of Management:
Essential Concepts and Applications (10th edition). Boston: Pearson.
4. Kasneb e-learning resources (link on the Kasneb website).
5. Kasneb approved study packs.

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

PAPER NO. 14 ADVANCED FINANCIAL REPORTING AND ANALYSIS

UNIT DESCRIPTION
This paper is intended to equip the candidate with knowledge, skills and attitudes that will enable
him/her to account for more complex transactions, prepare advanced financial statements and
reports in the private and public sectors and demonstrate awareness of trends in accounting
practice.

LEARNING OUTCOMES
A candidate who passes this paper should be able to:
• Prepare financial statements for subsidiaries, associates and jointly controlled entities in
compliance with International Financial Reporting Standards (IFRSs) and International
Public Sector Accounting Standards (IPSASs) as applicable
• Analyse financial statements for public and private sector entities
• Account for complex accounting transactions
• Apply ethical standards in accountancy work and practice

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CONTENT
1. Accounting for Assets and Liabilities

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1.1 (Assets and Liabilities as covered in Financial Accounting and Financial Reporting

en
are also relevant here)

ak
1.2 Leases Including Sale and leaseback and dealers in leased assets

me
1.3 Deferred Tax (With group aspects)

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1.4 Employee Benefits

w.
1.5 Share Based Payments

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1.6 Financial Assets and Financial Liabilities (Impairment, Hedging, Embedded
Derivatives and Disclosures)
1.7 Fair Value Measurement
1.8 Impairment of Assets

2. Preparation of Financial Statements for Interests in Other entities

2.1 Subsidiaries (Including foreign subsidiaries, piecemeal acquisitions, reduction in
shareholding and disposals as well as statement of cash flows)
2.2 Accounting for Associates and Joint Ventures (Including foreign entities)
2.3 Disclosures of interests in other entities

3. Preparation of Financial Statements for other entities

3.1 Financial Statements for Banks
3.2 Financial Statements for Insurance Companies
3.3 Interim Financial Statements
3.4 Financial Statements in a hyperinflationary economy (including the preparation of
financial statements)
3.5 Financial Statements complying with IFRS for SMEs.

4. Analysing Financial Statements

4.1 Earnings Per Share
4.2 Related Party Disclosures
4.3 Operating Segments
4.4 Financial Reorganisations and reconstructions

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

5. Public Sector Accounting Standards
5.1 Segment Reporting
5.2 Related Party Disclosures
5.3 Impairment of cash generating assets and non-cash generating assets
5.4 Disclosure of information about the general government sector
5.5 Consolidated Financial Statements
5.6 Investments in Associates and Joint Ventures

6. Other Reports and Emerging Issues in Financial Reporting

6.1 The conceptual Framework and the process of developing new accounting
standards
6.2 Proposals to revise/update existing standards and recommendations to issue new
ones (Discussions Papers and Exposure drafts)
(The Examinations Board shall provide guidelines on which Discussion
Papers and Exposure drafts are examinable for specific years)
6.3 Management Commentary (Management Discussion and Analysis)
6.4 Capital Markets Authority Corporate Governance Reporting Requirements

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6.5 Global Reporting Initiatives Guidelines on Sustainability Reporting

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6.6 Integrated Reporting

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6.7 Materiality Guidelines for Financial Reporting

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6.8 Legal and Ethical issues in Financial Reporting.

ak
me
so
Sample reading and reference material

w.
1. Collins, W., & McKeith, J. (2013). Financial Accounting and Reporting (2nd edition).

ww
McGraw-Hill Education.
2. Elliott, B., & Elliott, J. (2019). Financial Accounting and Reporting (19th edition). Harlow:
Pearson.
3. Cotter, D, (2012) Advanced Financial Reporting: A Complete Guide to IFRS. Harlow.
Financial Times / Prentice Hall.
4. Kasneb e-learning resources (link on the Kasneb website).
5. Kasneb approved study packs.

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

PAPER NO. 15 ADVANCED FINANCIAL MANAGEMENT

UNIT DESCRIPTION
This paper is intended to equip the candidate with knowledge, skills and attitudes that will enable
him/her to apply advanced financial management techniques and methods in a practical work
environment in both private and public sectors.

LEARNING OUTCOMES
A candidate who passes this paper should be able to:
• Make advanced capital budgeting decisions and make appropriate capital structure
decisions for an organisation
• Evaluate portfolios and apply the capital asset pricing model and other multifactor Models
in financial decision making
• Apply the relevant models and skills in prediction of corporate failure
• Apply derivatives in financial risk management and apply international finance concepts.
• Evaluate mergers and acquisitions
•

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Undertake corporate restructuring and re-organisation
•

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Apply valuation techniques in real estate finance.

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en
CONTENT

ak
1. Advanced capital budgeting decision
1.1 Incorporating risk/uncertainty in capital investment decisions

me
1.2 Techniques of handling risk: Basic Methods of analysis - Expected Monetary Value

so
(EMV), The Standard deviation and Coefficient of Variation

w.
1.3 Advanced Methods of analysis; sensitivity analysis, scenario analysis, decision

ww
trees, simulation analysis, utility analysis, risk adjusted discounting rate (RADR)
and certainty equivalent method
1.4 Impact of financing on investment decisions - the concept of adjusted present
value (APV)
1.5 Incorporating capital rationing in capital investment appraisal; Single period capital
rationing with divisible projects; Multi-period capital rationing with divisible capital
investments.
1.6 Incorporating inflation in capital investment appraisal
1.7 Evaluation of projects of unequal lives; The equivalent annual annuity approach
and the Replacement chain analysis (Constant scale finite period replication
criteria)
1.8 Project duration as a measure of risk
1.9 The real options in Capital Budgeting-Characteristics of the real Options; Types of
Options in Capital investment Appraisal-Strategic investment option
(Expansionary Option), Timing option (Option to delay a project), abandonment
option (Option to Withdraw a project), the replacement option and the Option to re-
deploy a project, challenges in use of options in investment analysis.
1.10 Common capital budgeting pitfalls

2. Portfolio theory and analysis

2.1 The modern portfolio theory: background of the theory; portfolio expected return;
the actual and weighted portfolio risk; derivation of efficient sets; the capital market
line (CML) model and its applications, the mean variance dominance rule; short
comings of portfolio theory
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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

 2.2 Capital Asset Pricing Model-CAPM: background of the theory; assumptions; beta
estimation - beta coefficient of an individual asset and that of a portfolio and the
interpretation of the result; security market line (SML) model and its applications;
conceptual differences between portfolio theory and capital asset pricing model;
shortcomings of the CAPM
2.3 International CAPM and Behavioural CAPM
2.4 The Arbitrage pricing model (APM) and other multifactor models: background of
the theory; conceptual differences between the Capital asset pricing model and
the Arbitrage pricing model; application of the Arbitrage pricing model,
shortcomings of Arbitrage pricing model; Pastor Stambaugh model
2.5 Evaluation of portfolio performance: Treynor’s measure, Sharpe’s measure,
Jensen’s measure, appraisal ratio measure, information ratio, Modigliani and
Modigliani (M2)

3. Advanced financing decision

3.1 The nature of financing decision, principle objectives of making financing decision
3.2 Analysis of breakpoints in weighted marginal cost of capital schedule (more than

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two breakpoints)

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3.3 Capital structure theories: nature of capital structure; factors influencing the firm’s

ya
capital structure; traditional theories of capital structure - assumptions of the

en
theories, Net income theory and Net operating income theory; Franco Modigliani

ak
and Merton Miller’s propositions - MM without taxes, MM with corporation taxes,

me
MM with corporation and personal tax rates and MM with taxes and financial

so
distress costs; other theories of capital structure; the pecking order theory; Static

w.
Trade-off theory and Agency effects, determination of the firm’s optimal capital

ww
structure using the Hamada model, CAPM and WACC
3.4 Long term financing decisions; bond refinancing decision, lease-buy evaluation
and rights issues
3.5 Assess an organisation’s debt exposure to interest rate changes using the simple
Macaulay duration and modified duration methods
3.6 Benefits and limitations of duration including the impact of convexity

4. Mergers and acquisitions

4.1 Nature of mergers and acquisitions
4.2 Arguments for and against the use of acquisitions and mergers as a method of
corporate expansion Acquisition and Mergers verses organic growth
4.3 Valuation of acquisitions and mergers: problem of overvaluation; valuation models-
‘Book value-plus’ models, Market based models, cash flow models; apply
appropriate methods, such as: risk-adjusted cost of capital, adjusted net present
values and changing price/earnings multipliers resulting from the acquisition or
merger, to the valuation process where appropriate Prediction of a takeover target:
criteria for choosing an appropriate target for acquisition
4.4 Defence tactics against hostile takeovers
4.5 Financing of mergers and acquisitions: Outright purchase using cash, share for
share exchange, share- Debenture exchange and share- preference share
exchange, Analysis of combined operating profit (EBIT) and post-acquisition
earning per share at the point of indifference in firm’s earnings under various
financing options and Determination of range of combined operating profit within
which to recommend a financing option

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

 4.6 Financial Evaluation of mergers and acquisitions – Post merger/Acquisition EPS,
Post Merger/Acquisition MPS
4.7 Regulatory framework for mergers and acquisitions
4.8 Valuation of firms/ Shares for Mergers and acquisition Purposes- Use of Net asset
basis, P/E ratio basis, Dividend growth model, Super profits model, Capital asset
pricing Model and the Discounted free cash flow basis.
4.9 Reasons why there are failed mergers and acquisitions
4.10 Mergers and acquisitions in the Kenyan, regional and global context

5. Corporate restructuring and re-organisation

5.1 Background on restructuring and reorganisation
5.2 Indicators/symptoms of restructuring
5.3 Causes of financial distress
5.4 Forms of financial distress and solutions to financial distress
5.5 Considerations in designing an appropriate restructuring programme
5.6 Financial reconstruction: forms of financial reconstruction; impact of financial
reconstruction on share price; impact of financial reconstruction on the weighted

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Average cost of capital (WACC)

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5.7 Portfolio reconstruction: various ways of unbundling a firm: divestment, de-merger,

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spin-off, liquidation, sell-offs, equity curve outs, strategic alliances, management

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buyout, leveraged buyouts and the management buy-ins.

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5.8 The relevance of the various forms of portfolio reconstruction

me
5.9 Organisational reconstruction: The nature and benefits of this form of restructuring

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5.10 Other forms of restructuring

w.
5.11 Restructuring in the Public sector

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5.12 Models of predicting corporate failure; Quantitative Models-Multiple discriminant
analysis (Z-Score model), Springate model, Fulmer model; Qualitative Models -
Argenti Model

6. Financial risk management

6.1 Types of risks: operational risks, political risks, economic risks, fiscal risks,
regulatory risks, currency risks and interest rate risks
6.2 The meaning, nature and importance of derivative instruments
6.3 Operations of the derivatives market: The relative advantages and disadvantages
of exchange traded versus over the counter (OTC) agreements; Key features, such
as standard contracts, tick sizes, margin requirements and margin trading
6.4 Types of derivatives: futures, forwards, options and swaps
6.5 Application of option pricing theory in investment decisions: Apply the Black-
Scholes Option Pricing (BSOP) model to financial product valuation and to asset
valuation; assumptions, structure, application and limitations of the BSOP model;
calculate and advise on the value of options to delay, expand, redeploy and
withdraw using the BSOP model
6.6 Binomial Option pricing model – Use of both riskless hedge and the risk neutral
approach in Valuation of both European and American call and put options
6.7 Foreign currency risk management: Types of forex risks, hedging currency risks,
forward contracts, money market hedge, currency options, currency futures and
currency swaps, Bilateral and Multilateral netting and Matching tools of managing
forex risks
6.8 Option trading Strategies- Spreads and Combinations
6.9 Limitations of financial derivatives
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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

7. International financial management
7.1 Introduction - The nature of international finance, Motives for investing in foreign
markets and Challenges experienced by the Multinational corporations
7.2 International financial Systems - Players in the international financial systems such
as International Monetary fund, World trade organisation, European Union and the
World bank.
7.3 International trade flows and foreign direct investments(FDI)
7.4 Financing of International Trade - Methods of financing the trade.
7.5 International Capital and Money Markets - The foreign exchange Market-
Exchange rates, Foreign Exchange exposures, International arbitrage - locational
arbitrage, triangular arbitrage and covered interest arbitrage, International parity
conditions- Interest rate parity, purchasing power parity and International fisher
effect, International capital markets and their importance
7.6 International Capital Budgeting - Reasons for Investing abroad, Evaluation of
capital investments using local cash flows and foreign cash flows.
7.7 International Capital structure - Factors influencing capital structure of MNCs,
Sources of international finance, Cost and benefits of the alternative sources of

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international finance, Factors leading to difference in cost of capital of domestic

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firms and Multinational corporations and Adjusting WACC for risk differential

ya
en
8. Real estate finance

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8.1 Overview of real estate finance - Meaning of real estate finance, nature of real

me
estate business, property rights and limitations of property rights, environment of

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real estate finance and participants in real estate business.

w.
8.2 Real estate valuation approaches (income approach, cost approach and sales

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comparison approach)
8.3 Real estate investment trusts (REITS): Types; advantages and disadvantages
8.4 Instruments of real estate financing - mortgages, lien, title, mortgage requirements
and mortgage clauses
8.5 Mechanics of real estate mortgage-mortgage payments, mortgage constant,
amortisation schedules
8.6 Secondary mortgage trading and mortgage securitisation and re-financing
8.7 Financing real estate investments-optimal capital structure, review of capital MM
Theories in relation to real estate finance, arbitrage process
8.8 Permanent financing of commercial real estate-equity financing, debt financing,
cash flow from operations, mechanics of leasing versus ownership

9. Contemporary issues and emerging trends

9.1 Crypto currency
9.2 Block chain technology
9.3 Cloud funding
9.4 Digitisation of financial transactions
9.5 Big data project finance
9.6 Islamic finance
9.7 Behavioral finance
9.8 Derivative markets in developing countries

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

Sample reading and reference material
1. Brigham, E. F., & Daves, P. R. (2021). Intermediate Financial Management (14th edition).
Australia: Cengage Learning.
2. Pandey, I. M. (2015). Financial Management (11th edition). New Delhi: Vikas Publishing.
3. Van Horne, J. C., & Wachowicz Jnr., J. M. (2009). Fundamentals of Financial
Management (13th edition). Harlow: Financial Times / Prentice Hall.
4. Madura, J. (2021). International Financial Management (14th edition). Australia: Cengage.
5. Kasneb e-learning resources (link on the Kasneb website).
6. Kasneb approved study packs.

om
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ya
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me
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w.
ww

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

PAPER NO. 16 (S1) ADVANCED TAXATION

UNIT DESCRIPTION

This paper is intended to equip the candidate with knowledge, skills and attitudes that will enable
him/her to solve complex tax issues, implement tax planning initiatives and administer tax in
various business environments.

LEARNING OUTCOMES
A candidate who passes this paper should be able to:
• Compute the tax liability of enterprises, entities and specialised business activities.
• Handle all value added tax matters
• Apply the procedure for conducting a tax investigation
• Explain the tax dispute resolution mechanism
• Explain the tax implications for cross border business activities.
• Develop tax policies

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CONTENT

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1. Taxation of business income and specialized business activities

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1.1 Partnership business
1.1.1 Admission of a new partner and retiring partners during the year

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1.1.2 Conversion of partnerships into liability companies

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1.1.3 Incomplete records pertaining to partnership businesses

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1.1.4 Case law on taxation of partnership businesses

w.
ww
2. Limited companies
2.1 Taxation of companies, including holding company, subsidiaries, branches and
related parties
2.2 Incomplete records pertaining to limited companies
2.3 Minimum tax
2.4 Shortfall tax computation
2.5 Taxation of dividends
2.6 Case law on taxation of limited companies
2.7 Rental income, including residential rent income, Commercial rent income and
Real estate investment trusts (REITS)
2.8 Charitable institutions
2.9 Leasing entities, including hire purchase lease agreements
2.10 Co-operative societies, Saccos
2.11 Trade associations, amateur sporting association and clubs
2.12 Trust bodies, settlements and estates under administration
2.13 Financial institutions: Banks, insurance companies
2.14 Sea and air transport undertakings
2.15 Collective investment schemes
2.16 Professional, training, management, agency, and consultancy fees
2.17 Property developers and contractors
2.18 Taxation of extractive industries
2.19 Capital gain tax
2.20 Digital service tax
2.21 Application of relevant case law

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

3. Value added tax administration
3.1 Obligations of a taxable person and offences relating to VAT
3.2 Value added tax computation
3.3 Restriction of input tax claimable
3.4 Imported services and VAT withholding agents
3.5 VAT refunds and bad debt relief computation
3.6 VAT Accountant certificate
3.7 Value added tax automated assessments
3.8 I tax significance and application in value added tax administration
3.9 Application of relevant case law

4. Tax investigations
4.1 Tax fraud
4.2 Civil and criminal tax investigation
4.3 Events which may trigger an investigation
4.4 Back duty and in-depth examination
4.5 Customs and excise investigations

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4.6 Negotiation for settlement: Tax amnesty, Tax Penalties and Enforcement for

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outstanding taxes

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4.7 Types of tax audit and their significance

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4.8 Application of relevant case law

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me
5. Tax dispute resolution mechanism

so
5.1 Tax disputes

w.
5.2 Stages of tax dispute resolution process

ww
5.3 Tax dispute resolution process cycle
5.4 Legal framework and objectives of Alternative Dispute Resolution
5.5 Types of tax disputes eligible for Alternative Dispute Resolution
5.6 Benefits of Alternative Dispute Resolution
5.7 Parties to Alternative Dispute Resolution and their roles
5.8 Issues exempted from Alternative Dispute Resolution
5.9 Alternative Dispute Resolution agreement terms and timelines
5.10 Termination of alternative dispute resolution
6. Taxation of cross border activities
6.1 Distinction between trading in and trading with a country
6.2 Double taxation agreements; theory, design and application
6.3 Regional perspective with reference to the East African Community (EAC) and the
Common Market for Eastern and Southern Africa (COMESA)
6.4 Most favored nation status
6.5 Nature, characteristics and significance of One Stop Border Posts (OSBPs)
6.6 Generalized system of preference and AGOA
6.7 Tax havens and treaty shopping
6.8 Tax information exchange agreements (TIEAS)
6.9 Transfer pricing: oecd guidelines
6.10 Application of relevant case law
7. Tax planning
7.1 Tax planning for individuals: By way of Tax exempt activities, transactions that are
allowable expenses and transactions attracting tax setoffs
7.2 Tax planning for body corporates
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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

 7.3 Identifying opportunities to alleviate, mitigate or defer the impact of direct or
7.4 indirect taxation
7.5 Evaluating remuneration packages
7.6 Tax avoidance and anti-tax avoidance provisions in the tax Act, short-fall
distributions of dividends
7.7 Sectoral tax incentives
7.8 Disposal of business operations and restructuring of activities
7.9 Tax risk management

8. Tax systems and policies

8.1 Types of tax systems
8.2 Role of taxation in economic development; tax base expansion, efficiency in tax
systems
8.3 Design of a tax policy
8.4 Criteria for evaluation of a tax system
8.5 Tax reforms and modernisation of tax systems under various Acts
8.6 KRA structure – Large Tax Payer and Medium Tax Payer organisations

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9. Professional practice in taxation

ya
9.1 Forms of tax practice and matters relating thereto

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9.2 Matters relating to new clients

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9.3 Handling of client work

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9.4 Disclosures in tax returns, computations and correspondence with the Revenue

so
Authority

w.
9.5 Moral and ethical issues in taxation

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9.6 Tax agents, appointment, obligations, professional liability
9.7 Cancellation of tax agents license
9.8 Role of tax agents in appeals procedure
9.9 Tax health check

Sample Reading and Reference Material

1. East African Community Customs Management Act, 2004 (Revised Edition 2017)
2. Excise Duty Act No. 23 Of 2015 Revised Edition 2017 [2015]
3. Income Tax Act Revised Edition 2018
4. Tax Procedures Act of 2015,Revised Edition 2018
5. Value Added Tax Act of 2013 Revised Edition 2018
6. Kasneb e-learning resources (link on kasneb website)
7. Kasneb approved study packs
8. Sample books from local authors

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

PAPER NO. 16 (S2) ADVANCED AUDITING AND ASSURANCE

UNIT DESCRIPTION
This paper is intended to equip the candidate with knowledge, skills and attitudes that will enable
him/her to undertake advanced audit and assurance engagements in compliance with regulatory
frameworks and International Standards on Auditing.

LEARNING OUTCOMES
A candidate who passes this paper should be able to:
• Recognise the regulatory, professional, and ethical issues relevant to those carrying out
an assurance engagement
• Assess and recommend appropriate quality control policies and procedures in practice
management
• Evaluate findings and results of work performed and draft suitable audit reports on
assignments
• Draft different types of audit opinions based on audit evidence gathered during an audit.

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• Draft engagement letters for audit and non-audit services that fall under International

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Standards on Auditing and ensure compliance with the relevant legal regulations

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• Incorporate emerging developments in the conduct of an audit.

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CONTENT

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1. Assurance and non-assurance engagements

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1.1 The concept of assurance and non-assurance engagements

w.
1.2 Engagement letters for assurance and non-assurance engagements

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1.3 Agreed upon procedures
1.4 Compilation engagements
1.5 Types of assurance reports
1.6 Key Audit Matters
1.7 Different types of audit opinions based on audit evidence gathered -
Entities/Companies that are exempt from audit in Kenya.

2. Audit framework and regulations

2.1 Objective and general principles of auditing
2.2 Legal framework
2.3 International, regulatory framework for audit and assurance services
2.4 Auditors’ professional liability and legal responsibilities

3. Professional and ethical considerations

3.1 Code of ethics for professional accountants in line with International Ethics
Standards Board for Accountants’ Code of Ethics for Professional Accountants
(IESBA Code)
3.2 Fundamental principles, threats and safeguards
3.3 Advertising, publicity, obtaining professional work and fees and money laundering
3.4 Professional skepticism (in the context of errors and fraud) - Professional Liability.

4. Management of audit practice

4.1 Client acceptance and retention
4.2 Tendering for audit services for public listed entities and nonpublic entities
4.3 Professional appointments for public listed entities and nonpublic entities
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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

 4.4 Planning and performing audits. The concept of materiality and assessing risk of
misstatement. Identify significant risks as outlined in International Standards on
Auditing
4.5 Methods and techniques of auditing high risk areas.
4.6 Use and evaluation of internal control system by auditors to address audit risks
identified.
4.7 Use of technological tools (data analytics) to analyze and evaluate audit evidence
gathered during the audit and how it addresses risk of misstatement.
4.8 Preparation and retention of audit working papers as required by the Companies
Act
4.9 Archiving of audit files.

5. Audit evaluation and reviews

5.1 Audit assertions and how to identify the relevant assertions during the audit
process
5.2 Subsequent events. Audit work done between financial year end and date of
signing the financial statements.

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5.3 Going concern assumption as a financial statement risk

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5.4 Related parties. Risks associated with related parties. Process of identifying

ya
related parties by management. Disclosure of related parties in the management

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representation letter and in the financial statements

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5.5 Drafting management letter representation

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5.6 Group audit/joint/component audit. Preparation of group reporting instructions to

so
component auditors

w.
5.7 Analytical review

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5.8 Evidence and testing considerations
5.9 Using the work of others such as internal auditors, other experts (tax, actuaries,
valuers, lawyers etc.) and another auditor
5.10 The company audit
5.10.1 Audit of consolidated financial statements
5.10.2 Audit of banks and non-banking financial institutions
5.10.3 Audit of general insurance companies
5.10.4 Audit of cooperatives societies(SACCOs)
5.10.5 Audit under taxation laws
5.10.6 Other special audit assignments
5.11 Role of Audit Committee in the audit process

6. Audit related assurance services

6.1 Prospective financial information, investigations and due diligence
6.2 Special audit assignments (social and environment audit)
6.3 Operations and internal audit management
6.4 Audit under computerised information systems. Identification and testing of
relevant IT general controls (ITGC) during an audit - Audit of public sector
undertakings - Integrated reporting
6.5 Audit of performance information (predetermined objectives) in the public sector
6.6 Special aspects of auditing in an automated environment.

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

7. Forensic accounting
7.1 Difference between a statutory audit and a forensic audit
7.2 Conduct of forensic investigations: accepting the investigation, planning, evidence
gathering, reporting
7.3 Rules of evidence in court proceedings
7.4 Regulations and standards on forensic accounting
7.5 Applicable codes of ethics

8. Concluding and reporting

8.1 Quality control and peer review
8.2 Reports to those charged with governance/Board of directors - Management letter-
issues identified during the audit process
8.3 Reporting on compliance and other information (Chairman’s statement and
directors report) and for listed entities, reporting on remuneration report for the
directors - Auditors report on financial statements - Reporting on other
assignments.

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9. Regulatory Environment

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9.1 International regulatory frameworks for audit and assurance services.

ya
9.2 Money Laundering

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9.3 Laws and regulations

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9.4 Other Regulators with interest in the audit space in Kenya such as Central Bank

me
of Kenya, Insurance Regulatory Authority, Capital Market Authority and Retirement

so
Benefit Authority and their requirements

w.
ww
10. Contemporary issues and emerging trends
10.1 Professional and ethical developments
10.2 Other current issues
10.3 Effects of pandemics on audit processes. The concept of remote auditing and
additional procedures put in place to obtain sufficient audit evidence.

Sample Reading and Reference Material

1. Johnstone-Zehms, K. M., Gramling, A. A., & Rittenberg, L. E. (2018). Auditing: A Risk-

Based Approach to Conducting Quality Audits. Australia: South-Western / Cengage
Learning.
2. IAASB Standards (https://www.iaasb.org)
3. Kasneb e-learning resources (link on the Kasneb website).
4. Kasneb approved study packs.

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

PAPER NO. 16 (S3) ADVANCED MANAGEMENT ACCOUNTING

UNIT DESCRIPTION
This paper is intended to equip the candidate with knowledge, skills and attitudes that will enable
him/her to apply advanced management accounting tools and techniques for decision making in
the context of organisational strategy.

LEARNING OUTCOMES
A candidate who passes this paper should be able to:
• Use cost estimation data in decision making
• Apply advanced management accounting techniques to aid in organisational strategic
decision making
• Use financial and non-financial indicators to measure organisational performance
• Apply environmental management accounting concepts in practice.

CONTENT

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1. Strategic management accounting information

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1.1 Sources of strategic management accounting information
1.2 Role of strategic management accounting in strategic planning and control

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1.3 Governance and control of strategic management accounting information

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1.4 Scope and limitations of management accounting

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1.5 Ethical standards for management accountants

me
so
2. Cost estimation and interpretation

w.
2.1 Ordinary least square (OLS) method. Single and multiple predictors; tests of

ww
significance (goodness of fit, ANOVA/P-Value, economic plausibility tests,
significance of independent variable/t-test)
2.2 Specifications/assumptions of OLS (implications of serial correlation, multi-
colinearity)
2.3 Computer output and technical versus managerial interpretation of OLS results
2.4 Learning curve models and their application

3. Planning and decision making techniques

3.1 Cost volume profit analysis (CVP) for single and multiple products under conditions
of uncertainty
3.2 Decision making under environments of uncertainty and risk, using conditional
payoff tables and decision trees.
3.3 Expected value of perfect information
3.4 Relevant cost analysis
3.5 Application of marginal costing (Non-routine decisions): Limiting factor analysis,
3.6 Throughput accounting, make or buy decision, continue or discontinue/drop
decisions, special order decisions and other short term decisions.

4. Pricing decisions
4.1 External pricing methods
4.2 Transfer pricing in divisionalised companies: Domestic and international transfer
pricing
4.3 Product life cycle costing, Target costing and Kaizen costing

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

 5. Strategic performance measurement
5.1 Functional and divisionalised organisational structures
5.2 Responsibility accounting, responsibility centers and segmental reporting
5.3 Divisional performance measures such as profit margin, asset turnover, return on
investment(ROI), return on capital employed(ROCE), residual income(RI),
accounting rate of return(ARR) and economic value added(EVA)
5.4 Non-financial performance indicators
5.5 Alternative performance measures such as balanced scorecard, performance
pyramid, Fitzgerald and Moon’s building block model.

6. Inventory control decisions

6.1 Applications of certainty inventory models (EOQ and EBQ) in decision making
6.2 Stochastic inventory models with and without stock out cost
6.3 Marginal analysis for perishable stock items
6.4 Application of simulation models in inventory control (with and without backorders)
6.5 Application of strategic management decisions in inventory control: Just-in-time
purchasing (JIT), ABC analysis and material requirement planning(MRP)

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7. Budgetary control techniques

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7.1 Applications of budgetary control systems: Top-down, bottom-up, rolling, zero-

en
based(ZBB), activity-based (ABB), incremental, feedback and feed-forward

ak
controls.

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7.2 Use of operational variances in reconciling original budget with actual performance

so
7.3 Advanced variance analysis, planning and operational analysis (Ex-post)

w.
7.4 Application of learning curve model and ABC in variance analysis

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7.5 Investigation models for variances.

8. Environmental management accounting

8.1 Role of accountants in managing and accounting for environmental cost
8.2 Use of management accounting techniques in identification and allocation of
environmental costs (Inflow/Outflow analysis, Flow cost accounting,
Environmental lifecycle costing and Environmental Activity Based Costing).

Sample reading and reference material

1. Kaplan, R. S., & Atkinson, A. A. (2013). Advanced Management Accounting. Pearson
Education Limited.
2. Tayles, M., & Drury, C. (2020). Management and Cost Accounting (11th edition). Cengage
Learning EMEA.
3. Kasneb e-learning resources (link on the Kasneb website).
4. Kasneb approved study packs.

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

PAPER NO. 16 (S4) ADVANCED PUBLIC FINANCIAL MANAGEMENT

UNIT DESCRIPTION
This paper is intended to equip the candidate with knowledge, skills and attitudes that will enable
him/her to implement regulations and policy directives governing advanced public financial
management issues, apply advanced financial management methods and techniques to analyse
and manage public debt, public investments among other areas in public sector finance.

LEARNING OUTCOMES
A candidate who passes this paper should be able to:
• Ensure compliance with various regulations in public financial management
• Demonstrate awareness of the changing local and global public financial management
issues
• Apply problem-solving skills in the practice of public financial management
• Apply public financial management tools and techniques in evaluating and managing
public investments, public debt, enterprise management in complex and dynamics

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environments
•

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Implement public procurement regulations in practice.
•

ya
Recommend policy changes in the area of public sector financial management

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CONTENT

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1. Introduction to Public Financial Management

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1.1 The scope, objective, and principles of Public Financial management (PFM)

so
1.2 Relevance of PFM Act in management of Public finances

w.
1.3 Review PFM Act as an important tool to implement public policies

ww
1.4 Best practices for public financial management in the global context
1.5 Challenges affecting implementation of Public Finances
1.6 The Public Financial Management Cycle

2. Public sector procurement

2.1 Introduction to procurement, store keeping, and Legal and institutional framework
in public sector procurement
2.2 General Procurement Principles
2.3 The procurement cycle in public institutions
2.4 The Accountable documents applied in public procurement
2.5 Roles and relationship between stores personnel, Procurement and Supply chain
officer in public entity
2.6 Establishment of Public Procurement Regulatory Authority (PPRA) as public
procurement regulator
2.7 Public Private Partnership models and their applications.

3. The role of Accounting officer in management of Public Funds

3.1 Establishment of Public Funds
3.2 Financing and operationalisation of Public Funds
3.3 Review of selected Public Funds including Contingency Fund, Equalisation Fund
among others
3.4 Winding up procedures for the Public Funds
3.5 Overview of Integrated Tax System, its operations and infrastructure.

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

4. Management of Public Debts in both National and County Governments’
4.1 Introduction to Public Debt, methods and debt instruments
4.2 Establishment, Functions of Public Debt office
4.3 Debt management in the County Government
4.4 Global best practices in management of public debts
4.5 Key stakeholder and their roles in public debt management including National
Treasury and Parliament
4.6 Power of national government to lend money and Management of Guarantees
5. Public Sector Investment and enterprise management
5.1 Establishment and Dissolution of State Corporations and public investments
5.2 Monitoring performance and statutory reporting for public investments.
5.3 The role of the National Treasury in management of Public Enterprises
5.4 Comparative analysis of State Corporation Act and Companies Act in Kenya
5.5 Challenges affecting State Corporation in Kenya.

6. Public Financial Management Reforms in Kenya

6.1 Establishment, Management and roles of Public Financial management reform

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6.2 Public Financial management reforms

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6.3 Overview of development partners and donor funds management

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6.4 Resource mobilisation strategies by the PFMR

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7. Internal Auditing in the Public sector

me
7.1 Establishment and scope of internal audit function

so
7.2 Objectives and functions of the internal audit function

w.
7.3 The internal control system and its procedures

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7.4 Internal audit function reporting structure
7.5 Internal audit standards and guidelines
7.6 Qualification for and professional bodies guiding internal auditors
7.7 The establishment, appointment and functions of audit committee
7.8 The role of Audit Committees in management of public funds
7.9 Merits and demerits of establishing audit committees.

8. The Office of Auditor General

8.1 The establishment of the Office of Auditor General and overview of the Public Audit
Act, 2015
8.2 The Appointment, roles and function of the office of Auditor General
8.3 Responsibilities of the Auditor General & Relationship between the internal audit
function and office of Auditor General
8.4 Challenges facing auditing public sector institutions.
8.5 The role of parliament as oversight body and parliamentary oversight committees
in both National Assembly and the Senate.
8.6 Challenges affecting the Parliament as oversight body

9. Appointment of Receivers of Revenue

9.1 Definition and appointment of Receivers of Revenue
9.2 The Role of Accounting officers in management of Receivers of Revenues
9.3 Procedure for Revenue classification and estimating revenues
9.4 Accounting procedure for the Receivers of Revenue

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021

10. Management of Consolidated Fund Services and Exchequer Accounts
10.1 Scope and objectives of Consolidated Fund Services
10.2 Expenditures covered by the Consolidated Fund Services
10.3 The Exchequer Account and procedures for exchequer requisitioning
10.4 The role of Accounting officers in exchequer requisition
10.5 Principles and Operations of Treasury Single Account (TSA)

11. Management of Revenues in County Governments

11.1 Classification of revenues in the County Governments
11.2 The role of Committee Executive Member of finance in County revenue
management
11.3 The Role of the Commission on revenue collection in management of County
government revenues.
11.4 Operations of County Revenue Fund (CRF)
11.5 Overview of computerised revenue collection services by County Governments.
11.6 Challenges affecting revenue collection by the County Governments.

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12. Public sector Budgeting and Planning

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12.1 Provisions of the National Budget in line with PFM Act

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12.2 Principles of a Soundness of the Budget and the Public sector Budget cycle

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12.3 Types of Budgets and rational for their applications and the Stages of the Public

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12.4 Budget for both National and County Governments

so
12.5 Stakeholders in public budget making process

w.
12.6 Strengths, Challenges and Weaknesses in public budget preparation systems

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Sample reading and reference material
1. The Public Finance Management Act, 2012 and Regulations
2. Income Tax Act Revised Edition 2018
3. Tax Procedures Act of 2015, Revised Edition 2018
4. Kasneb e-learning resources (link on kasneb website)
5. Kasneb approved study packs

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Certified Public Accountants (CPA) examination – Revised Syllabus July 2021