Commerce and Accountancy is a popular optional subject for the UPSC Civil Services Exam, especially among those with a background in commerce. This subject is detailed and technical, requiring thorough preparation and multiple revisions. It is valuable for learning financial literacy, understanding economic changes, and how businesses generate profit.
The subject carries 500 marks in the UPSC Mains, with two papers of 250 marks each. Key topics include accounting, auditing, financial management, tax accounting, and human resource management. The syllabus tests candidates on core concepts and their application to real-world government and business issues. UPSC Commerce and Accountancy Syllabus covers Optional Papers 1 & 2. Download the PDF for preparation for the Mains exam.
This optional is ideal for Chartered Accountants, commerce graduates, and finance professionals. It focuses heavily on management-related aspects of commerce and accountancy. While commerce involves the exchange of goods and services, accounting focuses on recording and reporting business transactions.
There are two papers in this optional:
- Paper I: Covers Accounting and Finance
- Paper II: Covers Organisation, Human Resource, and Industrial Relations
For preparation, candidates need to follow the syllabus closely, use recommended books, and employ effective study strategies.
UPSC Commerce and Accountancy Optional Syllabus 2025
The syllabus for the UPSC mains Commerce and Accountancy optional is divided into two papers: Paper I and Paper II. Here’s an overview of the topics covered:Paper I:
- Accounting and Finance
- Financial Accounting
- Corporate Accounting
- Cost and Management Accounting
- Taxation
- Auditing
UPSC Commerce and Accountancy Syllabus - Paper 1
Accounting and Finance
Accounting, Taxation & Auditing
Financial Accounting :- Accounting as a Financial Information System; Impact of Behavioural Sciences. Accounting Standards e.g., Accounting for Depreciation, Inventories, Research and Development Costs, Long-term Construction Contracts, Revenue Recognition, Fixed Assets, Contingencies, Foreign Exchange Transactions, Investments and Government Grants, Cash Flow Statement, Earnings Per Share.
- Accounting for Share Capital Transactions including Bonus Shares, Right Shares,
- Employees Stock Option and Buy-Back of Securities. Preparation and Presentation of Company Final Accounts. Amalgamation, Absorption, and Reconstruction of Companies.
- Nature and Functions of Cost Accounting. Installation of Cost Accounting System. Cost Concepts related to Income Measurement, Profit Planning, Cost Control, and Decision Making.
- Methods of Costing: Job Costing, Process Costing, Activity Based Costing.
- Volume-cost-Profit Relationship as a Tool of Profit Planning.
- Incremental Analysis/ Differential Costing as a Tool for Pricing Decisions, Product Decisions, Make or Buy Decisions, ShutDown Decisions, etc.
- Techniques of Cost Control and Cost Reduction: Budgeting as a Tool of Planning and Control. Standard Costing and Variance Analysis. Responsibility Accounting and Divisional Performance Measurement.
- Income Tax: Definitions; Basis of Charge; Incomes which do not form Part of Total Income. Simple problems of Computation of Income (of Individuals only) under Various Heads, i.e., Salaries, Income from House Property, Profits and Gains from Business or Profession, Capital Gains, Income from other sources, Income of other Persons included in Assessee’s Total Income.
- Set-Off and Carry Forward of Loss. Deductions from Gross Total Income.
- Salient Features/Provisions Related to VAT and Services Tax.
- Company Audit: Audit related to Divisible Profits, Dividends, Special investigations, and Tax audit.
- Audit of Banking, Insurance, Non-Profit Organizations, and Charitable Societies/ Trusts/Organizations.
Financial Management, Financial Institutions, and Markets
Financial Management :
- Finance Function: Nature, Scope, and Objectives of Financial Management: Risk and Return Relationship.
- Tools of Financial Analysis: Ratio Analysis, Funds-Flow, and Cash-Flow Statement.Capital Budgeting Decisions: Process, Procedures and Appraisal Methods. Risk and Uncertainty Analysis and Methods.
- Cost of capital: Concept, Computation of Specific Costs, and Weighted Average Cost of Capital. CAPM as a Tool for Determining Cost of Equity Capital.
- Financing Decisions: Theories of Capital Structure – Net Income (NI) Approach,
- Net Operating Income (NOI) Approach, MM Approach, and Traditional Approach. Designing of Capital Structure: Types of Leverages (Operating, Financial, and Combined) EBIT- EPS Analysis, and Other Factors.
- Dividend Decisions and Valuation of Firm: Walter’s Model, MM Thesis, Gordan’s Model Lintner’s Model. Factors Affecting Dividend Policy.
- Working Capital Management: Planning of Working Capital. Determinants of Working Capital. Components of Working Capital – Cash, Inventory, and Receivables.
- Corporate Restructuring with a focus on Mergers and Acquisitions (Financial aspects only)
Financial Markets and Institutions :
- Indian Financial System: An Overview
- Money Markets: Participants, Structure, and Instruments. Commercial Banks. Reforms in the Banking sector. Monetary and Credit Policy of RBI. RBI as a Regulator.
- Capital Market: Primary and Secondary Market. Financial Market Instruments and Innovative Debt Instruments; SEBI as a Regulator.
- Financial Services: Mutual Funds, Venture Capital, Credit Rating Agencies, Insurance and IRDA.
Paper II:
- Business Organization and Management
- Business and Industrial Laws
- Company Law
- Company Accounts and Audit
- Economic and Commercial Laws
UPSC Commerce and Accountancy Syllabus - Paper 2
Organisation Theory and Behaviour, Human Resource Management and Industrial Relations
Organisation Theory and Behaviour
Organisation Theory :- Nature and Concept of Organisation; External Environment of Organizations-Technological, Social, Political, Economical and Legal; Organizational Goals-Primary and Secondary Goals, Single and Multiple Goals; Management by Objectives.
- Evolution of Organization Theory: Classical, Neo-classical and Systems Approach. Modern Concepts of Organization Theory: Organizational Design, Organizational Structure, and Organizational Culture.
- Organizational Design-Basic Challenges; Differentiation and Integration Process; Centralization and Decentralization Process; Standardization / Formalization and Mutual Adjustment. Coordinating Formal and Informal Organizations. Mechanistic and Organic Structures
- Designing Organizational Structures-Authority and Control; Line and Staff Functions, Specialization, and Coordination. Types of Organization Structure-Functional. Matrix Structure, Project Structure. Nature and Basis of Power, Sources of Power, Power Structure and Politics. Impact of Information Technology on Organizational Design and Structure.
- Managing Organizational Culture
- Meaning and Concept; Individual in organizations: Personality, Theories, and Determinants; Perception-Meaning and Process.
- Motivation: Concepts, Theories, and Applications. Leadership-Theories and Styles. Quality of Work Life (QWL): Meaning and its Impact on Performance, Ways of its Enhancement. Quality Circles (QC)-Meaning and their Importance. Management of Conflicts in Organizations. Transactional Analysis, Organizational Effectiveness, Management of Change.
Human Resources Management and Industrial Relations
Human Resources Management(HRM):- Meaning, Nature, and Scope of HRM, Human Resource Planning, Job Analysis, Job Description, Job Specification, Recruitment Process, Selection Process, Orientation, and Placement, Training and Development Process, Performance Appraisal and 360° Feed Back, Salary and Wage Administration, Job Evaluation, Employee Welfare, Promotions, Transfers, and Separations.
- Meaning, Nature, Importance, and Scope of IR, Formation of Trade Unions, Trade Union Legislation, Trade Union Movement. in India. Recognition of Trade Unions, Problems of Trade Unions in India. Impact of Liberalization on Trade Union Movement.
- Nature of Industrial Disputes: Strikes and Lockouts, Causes of Disputes, Prevention and Settlement of Disputes.
- Worker’s Participation in Management: Philosophy, Rationale, Present Day Status, and Future Prospects.
- Adjudication and Collective Bargaining.
- Industrial Relations in Public Enterprises, Absenteeism and Labour Turnover in Indian Industries and their Causes and Remedies.
- ILO and its Function.
Commerce and Accountancy Optional Previous Year Question Papers (2023)
Reviewing previous years’ questions (PYQs) for the Commerce and Accountancy optional subject helps identify key topics in the syllabus. If you plan to choose this subject for the UPSC CSE mains, make sure not to skip PYQs. Here are the PYQs for Commerce and Accountancy from the 2023 exam.
| Commerce and Accountancy Optional Question Paper 2023 | |
| Commerce and Accountancy Paper I | Click Here |
| Commerce and Accountancy Paper II | Click Here |
Commerce and Accountancy Optional Toppers in UPSC Exams
Many toppers have selected Commerce and Accountancy as their optional subject and scored well with good preparation. For instance, in 2022, Garima Lohia secured the second rank in the UPSC exam with this subject. Here are some other toppers who have also chosen Commerce and Accountancy in the past:
| Commerce and Accountancy Optional Toppers List | |||
| Topper Name | Rank | Year | Marks |
| Garima Lohia | AIR 2 | 2022 | 275 |
| Anshika Jain | AIR 306 | 2022 | 255 |
| Sujawal Jagga | AIR 84 | 2021 | |
| Shivakshi Dixit | AIR 64 | 2020 | |
| Raunak Agrawal | AIR 13 | 2019 | 301 |
Commerce and Accountancy Optional Recommended Books for UPSC Preparation
Selecting the right study material is vital for effective preparation. Here are some highly recommended books for each section of the Commerce and Accountancy optional syllabus:
| Subject | Book | Author |
|---|---|---|
| Cost and Management Accounting | Cost Accounting | Maheshwari & Mittal |
| Corporate Accounting | Advanced Accountancy | P C Tulsian |
| Accounting Standards | Accounting Standards | D S Rawat |
| Taxation | Income Tax | Girish Ahuja & Ravi Gupta |
| Auditing | Students’ Guide to Auditing | Aruna Jha |
| Financial Management | Financial Management | R P Rustagi |
| Financial Markets & Institutions | Financial Markets & Institutions | L M Bhole |
| Industrial Relations and Labour Laws | Industrial Relations and Labour Laws | Piyali Ghosh |
| Human Resource Management | Human Resource Management | Ashwathappa |
| Organisation Theory and Behavior | Organisation Theory and Behavior | Singh & Chabbra |
| Organisation Behaviour | Organisation Behaviour | S P Robbins |
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Commerce And Accountancy Optional Syllabus FAQs
How is commerce and Accountancy as optional?
Commerce and Accountancy is a popular optional subject for UPSC aspirants with a commerce background. It has a detailed and technical syllabus that requires thorough preparation and multiple revisions.
What subjects are included in Commerce and Accountancy?
Commerce and Accountancy covers topics like finance accounting, taxation, auditing, financial management, financial institutions and markets, organization theory and behavior, human resource management, and industrial relations.
How do I score high marks in Commerce and Accountancy?
To score well in this optional subject, candidates should finish the syllabus quickly and practice test series to handle numerical problems.