Choosing the right optional subject is a crucial decision for UPSC aspirants, as it can significantly impact their chances of success in the Civil Services Examination. One such popular optional subject is Commerce and Accountancy. In this blog, we will delve into the details of the UPSC Commerce and Accountancy optional syllabus, recommended books, subjects covered, and what you can achieve while studying with Diademy IAS.
Understanding UPSC Commerce and Accountancy Optional
The Commerce and Accountancy optional subject is an excellent choice for candidates with a background in commerce, finance, or economics. It encompasses a wide range of topics that reflect the dynamics of the modern business world and economic systems. This optional subject is designed to test candidates’ understanding of commerce, accounting principles, business laws, and economic concepts.
UPSC Commerce and Accountancy Optional Syllabus
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
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Commerce and Accountancy Optional Syllabus :DETAILED SYLLABUS COVERING PAPER-I
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.
Cost Accounting :
- 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.
Taxation :
- 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.
Auditing :
- 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.
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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
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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
Organisation Behaviour:
- 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.
Industrial Relations (IR):
- 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.
Recommended Books for UPSC Commerce and Accountancy Optional
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:
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- Cost and Management Accounting: “Cost Accounting” by Maheshwari & Mittal
- Corporate Accounting: “Advanced Accountancy” by P C Tulsian
- Accounting standards by D S Rawat
- Taxation: “Income Tax” by Girish Ahuja & Ravi Gupta
- Auditing: “Students’ Guide to Auditing” by Aruna Jha
- Financial Management by R P Rustagi
- Financial markets & institutions by L M Bhole
- Industrial relations and labour laws by Piyali Ghosh
- Human Resource Management by Ashwathappa
- Organisation theory and Behavior by Singh & Chabbra
- Organisation behaviour by S P Robbins
Studying with Diademy IAS
The Diademy IAS, a renowned name in the field of civil services coaching, offers numerous advantages for UPSC aspirants choosing Commerce and Accountancy optional subject:
Expert Faculty:
Diademy IAS boasts a team of experienced and knowledgeable faculty members who provide comprehensive guidance on every aspect of the optional subject.
Customized Study Material:
We provide well-structured and updated study material that aligns with the UPSC Commerce and Accountancy optional syllabus, ensuring that candidates cover all relevant topics.
Mock Tests and Practice Papers
Regular mock tests and practice papers help aspirants gauge their preparation level and acquaint themselves with the actual exam pattern.
Personalized Attention
Diademy IAS emphasizes personalized attention to each student, addressing their doubts and concerns, thus fostering a conducive learning environment.
Performance Analysis:
The institute offers in-depth performance analysis, highlighting strengths and areas needing improvement, and aiding candidates in refining their preparation strategy.
Interactive Learning:
Diademy IAS organizes seminars, workshops, and doubt-clearing sessions that encourage interactive learning and discussion among aspirants.
Explore the courses that fit your study plan and get the best with Diademy IAS. Go to the commerce optional courses here.
A beast preparation journey awaits you, just get started and unlock your true potential with world-class UPSC mentors CA Rahul Kumar.
Opting for UPSC Commerce and Accountancy optional in the UPSC Civil Services Examination can be a strategic move, especially if you have a background in commerce or economics. Remember, diligent preparation is key to success. Alongside quality study material and consistent efforts, enrolling with Diademy IAS can significantly enhance your chances of acing the exam and realizing your dream of becoming a civil servant. So, embrace this comprehensive guide, make informed choices, and embark on your journey toward success with confidence.