Myanmar CPA Part I cheat sheet

Conceptual framework qualitative characteristics: relevance (predictive value, confirmatory value, materiality) and faithful representation (complete, neutral, free from error); comparability, verifiability, timeliness, understandability are enhancing.

Accrual basis recognizes revenue when performance obligation is satisfied and expenses when incurred, not when cash moves; MFRS/IFRS-style revenue model uses the five-step approach: identify contract, identify obligations, determine price, allocate price, recognize on satisfaction.

Depreciation methods: straight-line = (cost − residual)/useful life; reducing balance = carrying amount × rate; units of production = (cost − residual) × units used/total units. Depreciation starts when the asset is available for use.

Revaluation model: increase goes to OCI and accumulates in revaluation surplus; decrease reverses prior surplus in OCI, then goes to profit or loss; excess of revaluation over carrying amount is not a profit.

Inventory under IAS 2 is measured at the lower of cost and net realizable value; cost includes purchase price, conversion costs, and costs to bring inventory to location and condition; NRV = estimated selling price − costs to complete and sell.

Consolidation rule: control exists when the parent has power over the investee, exposure to variable returns, and ability to use power to affect returns. Intra-group balances, income, and unrealized profit are eliminated in full.

Impairment (IAS 36): compare carrying amount with recoverable amount = higher of fair value less costs of disposal and value in use; recognize loss immediately in profit or loss unless asset is revalued.

Statement of cash flows classifies operating, investing, and financing; interest and dividends paid may be operating or financing per policy, but classification must be consistent; non-cash transactions are disclosed separately.

Ratio formulas: current ratio = current assets/current liabilities; quick ratio = (current assets − inventory)/current liabilities; gearing = debt/(debt + equity); ROCE = EBIT/capital employed.

Cost classification by behavior: fixed cost is constant in total within the relevant range; variable cost is constant per unit; semi-variable cost has both elements and is split using high-low: variable rate = (cost at high − cost at low)/(high activity − low activity).

Contribution margin = sales − variable costs; contribution per unit = selling price − variable cost per unit; break-even units = fixed costs/contribution per unit; break-even revenue = fixed costs/contribution margin ratio.

Margin of safety = (budgeted sales − break-even sales)/budgeted sales; target profit units = (fixed costs + target profit)/contribution per unit.

Absorption costing includes fixed production overhead in product cost; marginal costing expenses it in the period. Difference in profit = change in inventory units × fixed overhead absorption rate per unit.

Relevant costing: include future incremental cash flows, exclude sunk costs, allocated common fixed costs, and non-cash items; opportunity cost of a scarce resource is included.

Limiting factor decision: rank products by contribution per unit of scarce resource, not by contribution per unit or gross profit.

Standard costing variances: material price = (standard price − actual price) × actual quantity; material usage = (standard quantity − actual quantity) × standard price; labor rate and efficiency variances follow the same pattern.

Flexible budget compares actual results with budgeted revenue and costs for the actual activity level; a static budget comparison mixes volume and price effects.

Audit risk model: audit risk = inherent risk × control risk × detection risk; detection risk is the only component the auditor controls, so higher inherent or control risk requires lower detection risk (more substantive work).

Assertions tested: occurrence, completeness, accuracy, cut-off, classification (transactions); existence, rights and obligations, completeness, valuation and allocation (balances).

Independence threats: self-interest, self-review, advocacy, familiarity, intimidation; safeguards include rotation, independent review, and declining engagements where safeguards are insufficient.

Materiality: overall materiality is often a percentage of profit before tax, revenue, or total assets; performance materiality is set below overall materiality to reduce aggregation risk.

Audit evidence is more reliable when obtained from independent external sources, from the auditor's own procedures, and in documentary form; external confirmation is strong evidence for existence, not for valuation.

Going concern: if material uncertainty exists but disclosure is adequate, issue an unmodified opinion with a separate 'Material Uncertainty Related to Going Concern' section; if disclosure is inadequate, qualify or disclaim.

Opinion types: unmodified, qualified (material but not pervasive), adverse (material and pervasive misstatement), disclaimer (inability to obtain sufficient evidence, material and pervasive).

Sampling: sampling risk is the risk the conclusion based on a sample differs from the conclusion on the whole population; non-sampling risk arises from human error or inappropriate procedures.

Subsequent events: adjust the financial statements for conditions existing at year-end; disclose non-adjusting events that are material; auditor's responsibility extends to the date of the audit report.

Income tax rates under the Myanmar Income Tax Law: resident citizens and resident foreigners are taxed on a progressive scale up to 25% on salary income; non-resident foreigners pay 25% flat on Myanmar-source salary; companies pay 22% (with a higher rate for entities under the Myanmar Investment Law, per prevailing rules).

Residence: a citizen is resident if domiciled in Myanmar; a foreigner is resident if living in Myanmar for at least 183 days in the income year. Residents are taxed on worldwide income; non-residents on Myanmar-source income only.

Commercial tax: standard rate is 5% on most goods and services; specific goods and services carry different rates (for example, 8% on certain services and higher rates on motor vehicles, fuel, and alcohol), so the rate must be checked per schedule.

Specific goods tax applies to designated goods such as tobacco, alcohol, and vehicles, in addition to commercial tax; it is collected at the import or production stage.

Capital gains on sale of capital assets are taxed at 10% for residents and non-residents on Myanmar-source gains, with a lower rate for certain assets such as shares in some cases; gains on disposal of a capital asset are computed as sale proceeds minus cost and allowable expenses.

Withholding tax: payments to residents for services and certain contracts attract withholding at prescribed rates; payments to non-residents attract withholding on Myanmar-source income, and the withheld amount is a final tax for non-residents in defined cases.

Deductions and allowances: business expenses must be incurred wholly and exclusively for producing income; depreciation is allowed at prescribed rates by asset class; donations to approved charities and certain reliefs are allowed subject to limits.

Tax administration: annual income tax return is generally filed within three months of the end of the income year; late filing attracts penalties and interest; tax audit and assessment are administered by the Internal Revenue Department.

Income year for companies generally follows the financial year adopted by the company; for individuals it is the fiscal year from 1 April to 31 March.

A contract requires offer, acceptance, consideration, intention to create legal relations, and capacity; consideration must be sufficient but need not be adequate; past consideration is generally not valid.

Terms versus representations: terms are contractual and enforceable; exemption clauses are construed contra proferentem, and liability for death or personal injury cannot be excluded.

Company law under the Myanmar Companies Law 2017: a private company has restrictions on share transfer and a cap on members (up to 50, excluding employees); a public company may offer shares to the public and must comply with prospectus and disclosure rules.

Directors owe duties of care and diligence, good faith, avoidance of conflicts, and not to misuse company property or information; the business judgment rule protects informed, good-faith decisions.

Corporate governance codes emphasize board independence, separation of chair and CEO, audit committee independence, whistleblowing channels, and disclosure of related-party transactions.

Agency problem: managers may pursue personal goals over shareholder interests; mitigation includes performance-based pay, independent boards, and transparent reporting.

Insolvency and liquidation: a company may be wound up voluntarily or by court order; preferential debts and secured creditors rank ahead of unsecured creditors in distribution.

Price elasticity of demand = percentage change in quantity demanded/percentage change in price; demand is elastic when the absolute value exceeds 1, inelastic when below 1.

GDP measures the market value of final goods and services produced within a country's borders in a period; nominal GDP uses current prices, real GDP uses base-year prices.

Inflation is a sustained rise in the general price level; it erodes purchasing power and is measured by consumer price indices; demand-pull and cost-push are the main causes.

Monetary policy tools: open market operations, reserve requirements, policy interest rate, and credit controls; expansionary policy lowers rates and increases money supply.

Fiscal policy: expansionary policy raises government spending or cuts taxes; the multiplier effect is larger when the marginal propensity to consume is higher.

Exchange rate regimes: fixed, floating, and managed float; depreciation of the domestic currency makes exports cheaper and imports more expensive.

Market structures: perfect competition has many firms and homogeneous products; monopoly has one firm and barriers to entry; oligopoly has few interdependent firms; monopolistic competition has differentiated products.

Comparative advantage: a country gains from trade by specializing in goods with lower opportunity cost, even if it has an absolute disadvantage in all goods.

Time value of money: future value = present value × (1 + r)^n; present value = future value/(1 + r)^n; annuity present value factor = [1 − (1 + r)^−n]/r.

Net present value = present value of cash inflows − initial investment; accept projects with positive NPV; IRR is the discount rate at which NPV equals zero, and accept if IRR exceeds the cost of capital.

Cost of capital: WACC = (E/V) × Ke + (D/V) × Kd × (1 − tax rate); use market values where available.

CAPM: required return = risk-free rate + beta × market risk premium; beta measures systematic risk, which cannot be diversified away.

Working capital: cash conversion cycle = inventory days + receivable days − payable days; shorter cycle frees cash.

Dividend policy: residual theory pays dividends only after funding positive-NPV projects; clientele effects explain investor preference for dividend or growth.

Leverage: financial leverage raises EPS volatility and financial risk; operating leverage arises from fixed operating costs and raises business risk.

Bond valuation: price = present value of coupon payments plus present value of face value, discounted at the yield to maturity; price moves inversely with yields.

Internal controls over IT: general controls (access management, change management, backup, physical security) support application controls (input, processing, output controls).

Segregation of duties in IT: developers should not have production access; user access reviews, privileged access monitoring, and logging are key detective controls.

Data integrity controls: hash totals, record counts, check digits, validation rules, and reconciliation of batch totals detect errors and tampering.

Confidentiality principle: an accountant must not disclose client information without authority or legal obligation; disclosure is permitted where required by law, in legal proceedings, or with client consent.

Integrity and objectivity: an accountant must avoid conflicts of interest and must not accept gifts or hospitality that could impair professional judgment.

Professional competence and due care: maintain current technical knowledge and do not undertake work without the competence to perform it.

Threats to ethics compliance: self-interest, self-review, advocacy, familiarity, and intimidation; safeguards include education, review, and consultation with professional bodies.

Cyber risk basics: phishing, ransomware, and social engineering target human behavior; controls include multi-factor authentication, patching, and staff awareness training.

Conceptual framework qualitative characteristics: relevance (predictive value, confirmatory value, materiality) and faithful representation (complete, neutral, free from error); comparability, verifiability, timeliness, understandability are enhancing.

Accrual basis recognizes revenue when performance obligation is satisfied and expenses when incurred, not when cash moves; the revenue model uses five steps: identify contract, identify obligations, determine price, allocate price, recognize on satisfaction.

Depreciation methods: straight-line = (cost − residual)/useful life; reducing balance = carrying amount × rate; units of production = (cost − residual) × units used/total units. Depreciation starts when the asset is available for use.

Revaluation model: increase goes to OCI and accumulates in revaluation surplus; decrease reverses prior surplus in OCI, then goes to profit or loss; excess of revaluation over carrying amount is not profit.

Inventory is measured at the lower of cost and net realizable value; cost includes purchase price, conversion costs, and costs to bring inventory to location and condition; NRV = estimated selling price − costs to complete and sell.

Consolidation rule: control exists when the parent has power over the investee, exposure to variable returns, and ability to use power to affect returns. Intra-group balances, income, and unrealized profit are eliminated in full.

Impairment: compare carrying amount with recoverable amount = higher of fair value less costs of disposal and value in use; recognize loss immediately in profit or loss unless the asset is revalued.

Statement of cash flows classifies operating, investing, and financing; interest and dividends paid may be operating or financing per policy, but classification must be consistent; non-cash transactions are disclosed separately.

Ratio formulas: current ratio = current assets/current liabilities; quick ratio = (current assets − inventory)/current liabilities; gearing = debt/(debt + equity); ROCE = EBIT/capital employed.

Cost behavior: fixed cost is constant in total within the relevant range; variable cost is constant per unit; semi-variable cost has both elements and is split using high-low: variable rate = (cost at high − cost at low)/(high activity − low activity).

Contribution margin = sales − variable costs; contribution per unit = selling price − variable cost per unit; break-even units = fixed costs/contribution per unit; break-even revenue = fixed costs/contribution margin ratio.

Margin of safety = (budgeted sales − break-even sales)/budgeted sales; target profit units = (fixed costs + target profit)/contribution per unit.

Absorption costing includes fixed production overhead in product cost; marginal costing expenses it in the period. Difference in profit = change in inventory units × fixed overhead absorption rate per unit.

Relevant costing: include future incremental cash flows, exclude sunk costs, allocated common fixed costs, and non-cash items; opportunity cost of a scarce resource is included.

Limiting factor decision: rank products by contribution per unit of scarce resource, not by contribution per unit or gross profit.

Standard costing variances: material price = (standard price − actual price) × actual quantity; material usage = (standard quantity − actual quantity) × standard price; labor rate and efficiency variances follow the same pattern.

Flexible budget compares actual results with budgeted revenue and costs for the actual activity level; a static budget comparison mixes volume and price effects.

Audit risk model: audit risk = inherent risk × control risk × detection risk; detection risk is the only component the auditor controls, so higher inherent or control risk requires lower detection risk and more substantive work.

Assertions tested: occurrence, completeness, accuracy, cut-off, classification for transactions; existence, rights and obligations, completeness, valuation and allocation for balances.

Independence threats: self-interest, self-review, advocacy, familiarity, intimidation; safeguards include rotation, independent review, and declining engagements where safeguards are insufficient.

Materiality: overall materiality is often a percentage of profit before tax, revenue, or total assets; performance materiality is set below overall materiality to reduce aggregation risk.

Audit evidence is more reliable when obtained from independent external sources, from the auditor's own procedures, and in documentary form; external confirmation is strong evidence for existence, not for valuation.

Going concern: if material uncertainty exists but disclosure is adequate, issue an unmodified opinion with a separate 'Material Uncertainty Related to Going Concern' section; if disclosure is inadequate, qualify or disclaim.

Opinion types: unmodified, qualified (material but not pervasive), adverse (material and pervasive misstatement), disclaimer (inability to obtain sufficient evidence, material and pervasive).

Sampling: sampling risk is the risk the conclusion based on a sample differs from the conclusion on the whole population; non-sampling risk arises from human error or inappropriate procedures.

Subsequent events: adjust the financial statements for conditions existing at year-end; disclose non-adjusting events that are material; auditor responsibility extends to the date of the audit report.

Income tax rates under the Myanmar Income Tax Law: resident citizens and resident foreigners are taxed on a progressive scale up to 25% on salary income; non-resident foreigners pay 25% flat on Myanmar-source salary; companies pay 22% (with a higher rate for entities under the Myanmar Investment Law, per prevailing rules).

Residence: a citizen is resident if domiciled in Myanmar; a foreigner is resident if living in Myanmar for at least 183 days in the income year. Residents are taxed on worldwide income; non-residents on Myanmar-source income only.

Commercial tax: standard rate is 5% on most goods and services; specific goods and services carry different rates (for example, 8% on certain services and higher rates on motor vehicles, fuel, and alcohol), so the rate must be checked per schedule.

Specific goods tax applies to designated goods such as tobacco, alcohol, and vehicles, in addition to commercial tax; it is collected at the import or production stage.

Capital gains on sale of capital assets are taxed at 10% for residents and non-residents on Myanmar-source gains, with a lower rate for certain assets such as shares in some cases; gains on disposal of a capital asset are computed as sale proceeds minus cost and allowable expenses.

Withholding tax: payments to residents for services and certain contracts attract withholding at prescribed rates; payments to non-residents attract withholding on Myanmar-source income, and the withheld amount is a final tax for non-residents in defined cases.

Deductions and allowances: business expenses must be incurred wholly and exclusively for producing income; depreciation is allowed at prescribed rates by asset class; donations to approved charities and certain reliefs are allowed subject to limits.

Tax administration: annual income tax return is generally filed within three months of the end of the income year; late filing attracts penalties and interest; tax audit and assessment are administered by the Internal Revenue Department.

Income year for companies generally follows the financial year adopted by the company; for individuals it is the fiscal year from 1 April to 31 March.

A contract requires offer, acceptance, consideration, intention to create legal relations, and capacity; consideration must be sufficient but need not be adequate; past consideration is generally not valid.

Terms versus representations: terms are contractual and enforceable; exemption clauses are construed contra proferentem, and liability for death or personal injury cannot be excluded.

Company law under the Myanmar Companies Law 2017: a private company has restrictions on share transfer and a cap on members (up to 50, excluding employees); a public company may offer shares to the public and must comply with prospectus and disclosure rules.

Directors owe duties of care and diligence, good faith, avoidance of conflicts, and not to misuse company property or information; the business judgment rule protects informed, good-faith decisions.

Corporate governance codes emphasize board independence, separation of chair and CEO, audit committee independence, whistleblowing channels, and disclosure of related-party transactions.

Agency problem: managers may pursue personal goals over shareholder interests; mitigation includes performance-based pay, independent boards, and transparent reporting.

Insolvency and liquidation: a company may be wound up voluntarily or by court order; preferential debts and secured creditors rank ahead of unsecured creditors in distribution.

Price elasticity of demand = percentage change in quantity demanded/percentage change in price; demand is elastic when the absolute value exceeds 1, inelastic when below 1.

GDP measures the market value of final goods and services produced within a country's borders in a period; nominal GDP uses current prices, real GDP uses base-year prices.

Inflation is a sustained rise in the general price level; it erodes purchasing power and is measured by consumer price indices; demand-pull and cost-push are the main causes.

Monetary policy tools: open market operations, reserve requirements, policy interest rate, and credit controls; expansionary policy lowers rates and increases money supply.

Fiscal policy: expansionary policy raises government spending or cuts taxes; the multiplier effect is larger when the marginal propensity to consume is higher.

Exchange rate regimes: fixed, floating, and managed float; depreciation of the domestic currency makes exports cheaper and imports more expensive.

Market structures: perfect competition has many firms and homogeneous products; monopoly has one firm and barriers to entry; oligopoly has few interdependent firms; monopolistic competition has differentiated products.

Comparative advantage: a country gains from trade by specializing in goods with lower opportunity cost, even if it has an absolute disadvantage in all goods.

Time value of money: future value = present value × (1 + r)^n; present value = future value/(1 + r)^n; annuity present value factor = [1 − (1 + r)^−n]/r.

Net present value = present value of cash inflows − initial investment; accept projects with positive NPV; IRR is the discount rate at which NPV equals zero, and accept if IRR exceeds the cost of capital.

Cost of capital: WACC = (E/V) × Ke + (D/V) × Kd × (1 − tax rate); use market values where available.

CAPM: required return = risk-free rate + beta × market risk premium; beta measures systematic risk, which cannot be diversified away.

Working capital: cash conversion cycle = inventory days + receivable days − payable days; shorter cycle frees cash.

Dividend policy: residual theory pays dividends only after funding positive-NPV projects; clientele effects explain investor preference for dividend or growth.

Leverage: financial leverage raises EPS volatility and financial risk; operating leverage arises from fixed operating costs and raises business risk.

Bond valuation: price = present value of coupon payments plus present value of face value, discounted at the yield to maturity; price moves inversely with yields.

Internal controls over IT: general controls (access management, change management, backup, physical security) support application controls (input, processing, output controls).

Segregation of duties in IT: developers should not have production access; user access reviews, privileged access monitoring, and logging are key detective controls.

Data integrity controls: hash totals, record counts, check digits, validation rules, and reconciliation of batch totals detect errors and tampering.

Confidentiality principle: an accountant must not disclose client information without authority or legal obligation; disclosure is permitted where required by law, in legal proceedings, or with client consent.

Integrity and objectivity: an accountant must avoid conflicts of interest and must not accept gifts or hospitality that could impair professional judgment.

Professional competence and due care: maintain current technical knowledge and do not undertake work without the competence to perform it.

Threats to ethics compliance: self-interest, self-review, advocacy, familiarity, and intimidation; safeguards include education, review, and consultation with professional bodies.

Cyber risk basics: phishing, ransomware, and social engineering target human behavior; controls include multi-factor authentication, patching, and staff awareness training.

Conceptual framework qualitative characteristics: relevance (predictive value, confirmatory value, materiality) and faithful representation (complete, neutral, free from error); comparability, verifiability, timeliness, understandability are enhancing.

Accrual basis recognizes revenue when performance obligation is satisfied and expenses when incurred, not when cash moves; the revenue model uses five steps: identify contract, identify obligations, determine price, allocate price, recognize on satisfaction.

Depreciation methods: straight-line = (cost − residual)/useful life; reducing balance = carrying amount × rate; units of production = (cost − residual) × units used/total units. Depreciation starts when the asset is available for use.

Revaluation model: increase goes to OCI and accumulates in revaluation surplus; decrease reverses prior surplus in OCI, then goes to profit or loss; excess of revaluation over carrying amount is not profit.

Inventory is measured at the lower of cost and net realizable value; cost includes purchase price, conversion costs, and costs to bring inventory to location and condition; NRV = estimated selling price − costs to complete and sell.

Consolidation rule: control exists when the parent has power over the investee, exposure to variable returns, and ability to use power to affect returns. Intra-group balances, income, and unrealized profit are eliminated in full.

Impairment: compare carrying amount with recoverable amount = higher of fair value less costs of disposal and value in use; recognize loss immediately in profit or loss unless the asset is revalued.

Statement of cash flows classifies operating, investing, and financing; interest and dividends paid may be operating or financing per policy, but classification must be consistent; non-cash transactions are disclosed separately.

Ratio formulas: current ratio = current assets/current liabilities; quick ratio = (current assets − inventory)/current liabilities; gearing = debt/(debt + equity); ROCE = EBIT/capital employed.

Cost behavior: fixed cost is constant in total within the relevant range; variable cost is constant per unit; semi-variable cost has both elements and is split using high-low: variable rate = (cost at high − cost at low)/(high activity − low activity).

Contribution margin = sales − variable costs; contribution per unit = selling price − variable cost per unit; break-even units = fixed costs/contribution per unit; break-even revenue = fixed costs/contribution margin ratio.

Margin of safety = (budgeted sales − break-even sales)/budgeted sales; target profit units = (fixed costs + target profit)/contribution per unit.

Absorption costing includes fixed production overhead in product cost; marginal costing expenses it in the period. Difference in profit = change in inventory units × fixed overhead absorption rate per unit.

Relevant costing: include future incremental cash flows, exclude sunk costs, allocated common fixed costs, and non-cash items; opportunity cost of a scarce resource is included.

Limiting factor decision: rank products by contribution per unit of scarce resource, not by contribution per unit or gross profit.

Standard costing variances: material price = (standard price − actual price) × actual quantity; material usage = (standard quantity − actual quantity) × standard price; labor rate and efficiency variances follow the same pattern.

Flexible budget compares actual results with budgeted revenue and costs for the actual activity level; a static budget comparison mixes volume and price effects.

Audit risk model: audit risk = inherent risk × control risk × detection risk; detection risk is the only component the auditor controls, so higher inherent or control risk requires lower detection risk and more substantive work.

Assertions tested: occurrence, completeness, accuracy, cut-off, classification for transactions; existence, rights and obligations, completeness, valuation and allocation for balances.

Independence threats: self-interest, self-review, advocacy, familiarity, intimidation; safeguards include rotation, independent review, and declining engagements where safeguards are insufficient.

Materiality: overall materiality is often a percentage of profit before tax, revenue, or total assets; performance materiality is set below overall materiality to reduce aggregation risk.

Audit evidence is more reliable when obtained from independent external sources, from the auditor's own procedures, and in documentary form; external confirmation is strong evidence for existence, not for valuation.

Going concern: if material uncertainty exists but disclosure is adequate, issue an unmodified opinion with a separate 'Material Uncertainty Related to Going Concern' section; if disclosure is inadequate, qualify or disclaim.

Opinion types: unmodified, qualified (material but not pervasive), adverse (material and pervasive misstatement), disclaimer (inability to obtain sufficient evidence, material and pervasive).

Sampling: sampling risk is the risk the conclusion based on a sample differs from the conclusion on the whole population; non-sampling risk arises from human error or inappropriate procedures.

Subsequent events: adjust the financial statements for conditions existing at year-end; disclose non-adjusting events that are material; auditor responsibility extends to the date of the audit report.

Income tax rates under the Myanmar Income Tax Law: resident citizens and resident foreigners are taxed on a progressive scale up to 25% on salary income; non-resident foreigners pay 25% flat on Myanmar-source salary; companies pay 22% (with a higher rate for entities under the Myanmar Investment Law, per prevailing rules).

Residence: a citizen is resident if domiciled in Myanmar; a foreigner is resident if living in Myanmar for at least 183 days in the income year. Residents are taxed on worldwide income; non-residents on Myanmar-source income only.

Commercial tax: standard rate is 5% on most goods and services; specific goods and services carry different rates (for example, 8% on certain services and higher rates on motor vehicles, fuel, and alcohol), so the rate must be checked per schedule.

Specific goods tax applies to designated goods such as tobacco, alcohol, and vehicles, in addition to commercial tax; it is collected at the import or production stage.

Capital gains on sale of capital assets are taxed at 10% for residents and non-residents on Myanmar-source gains, with a lower rate for certain assets such as shares in some cases; gains on disposal of a capital asset are computed as sale proceeds minus cost and allowable expenses.

Withholding tax: payments to residents for services and certain contracts attract withholding at prescribed rates; payments to non-residents attract withholding on Myanmar-source income, and the withheld amount is a final tax for non-residents in defined cases.

Deductions and allowances: business expenses must be incurred wholly and exclusively for producing income; depreciation is allowed at prescribed rates by asset class; donations to approved charities and certain reliefs are allowed subject to limits.

Tax administration: annual income tax return is generally filed within three months of the end of the income year; late filing attracts penalties and interest; tax audit and assessment are administered by the Internal Revenue Department.

Income year for companies generally follows the financial year adopted by the company; for individuals it is the fiscal year from 1 April to 31 March.

A contract requires offer, acceptance, consideration, intention to create legal relations, and capacity; consideration must be sufficient but need not be adequate; past consideration is generally not valid.

Terms versus representations: terms are contractual and enforceable; exemption clauses are construed contra proferentem, and liability for death or personal injury cannot be excluded.

Company law under the Myanmar Companies Law 2017: a private company has restrictions on share transfer and a cap on members (up to 50, excluding employees); a public company may offer shares to the public and must comply with prospectus and disclosure rules.

Directors owe duties of care and diligence, good faith, avoidance of conflicts, and not to misuse company property or information; the business judgment rule protects informed, good-faith decisions.

Corporate governance codes emphasize board independence, separation of chair and CEO, audit committee independence, whistleblowing channels, and disclosure of related-party transactions.

Agency problem: managers may pursue personal goals over shareholder interests; mitigation includes performance-based pay, independent boards, and transparent reporting.

Insolvency and liquidation: a company may be wound up voluntarily or by court order; preferential debts and secured creditors rank ahead of unsecured creditors in distribution.

Price elasticity of demand = percentage change in quantity demanded/percentage change in price; demand is elastic when the absolute value exceeds 1, inelastic when below 1.

GDP measures the market value of final goods and services produced within a country's borders in a period; nominal GDP uses current prices, real GDP uses base-year prices.

Inflation is a sustained rise in the general price level; it erodes purchasing power and is measured by consumer price indices; demand-pull and cost-push are the main causes.

Monetary policy tools: open market operations, reserve requirements, policy interest rate, and credit controls; expansionary policy lowers rates and increases money supply.

Fiscal policy: expansionary policy raises government spending or cuts taxes; the multiplier effect is larger when the marginal propensity to consume is higher.

Exchange rate regimes: fixed, floating, and managed float; depreciation of the domestic currency makes exports cheaper and imports more expensive.

Market structures: perfect competition has many firms and homogeneous products; monopoly has one firm and barriers to entry; oligopoly has few interdependent firms; monopolistic competition has differentiated products.

Comparative advantage: a country gains from trade by specializing in goods with lower opportunity cost, even if it has an absolute disadvantage in all goods.

Time value of money: future value = present value × (1 + r)^n; present value = future value/(1 + r)^n; annuity present value factor = [1 − (1 + r)^−n]/r.

Net present value = present value of cash inflows − initial investment; accept projects with positive NPV; IRR is the discount rate at which NPV equals zero, and accept if IRR exceeds the cost of capital.

Cost of capital: WACC = (E/V) × Ke + (D/V) × Kd × (1 − tax rate); use market values where available.

CAPM: required return = risk-free rate + beta × market risk premium; beta measures systematic risk, which cannot be diversified away.

Working capital: cash conversion cycle = inventory days + receivable days − payable days; shorter cycle frees cash.

Dividend policy: residual theory pays dividends only after funding positive-NPV projects; clientele effects explain investor preference for dividend or growth.

Leverage: financial leverage raises EPS volatility and financial risk; operating leverage arises from fixed operating costs and raises business risk.

Bond valuation: price = present value of coupon payments plus present value of face value, discounted at the yield to maturity; price moves inversely with yields.

Internal controls over IT: general controls (access management, change management, backup, physical security) support application controls (input, processing, output controls).

Segregation of duties in IT: developers should not have production access; user access reviews, privileged access monitoring, and logging are key detective controls.

Data integrity controls: hash totals, record counts, check digits, validation rules, and reconciliation of batch totals detect errors and tampering.

Confidentiality principle: an accountant must not disclose client information without authority or legal obligation; disclosure is permitted where required by law, in legal proceedings, or with client consent.

Integrity and objectivity: an accountant must avoid conflicts of interest and must not accept gifts or hospitality that could impair professional judgment.

Professional competence and due care: maintain current technical knowledge and do not undertake work without the competence to perform it.

Threats to ethics compliance: self-interest, self-review, advocacy, familiarity, and intimidation; safeguards include education, review, and consultation with professional bodies.

Cyber risk basics: phishing, ransomware, and social engineering target human behavior; controls include multi-factor authentication, patching, and staff awareness training.

Conceptual framework qualitative characteristics: relevance (predictive value, confirmatory value, materiality) and faithful representation (complete, neutral, free from error); comparability, verifiability, timeliness, understandability are enhancing.

Accrual basis recognizes revenue when performance obligation is satisfied and expenses when incurred, not when cash moves; the revenue model uses five steps: identify contract, identify obligations, determine price, allocate price, recognize on satisfaction.

Depreciation methods: straight-line = (cost − residual)/useful life; reducing balance = carrying amount × rate; units of production = (cost − residual) × units used/total units. Depreciation starts when the asset is available for use.

Revaluation model: increase goes to OCI and accumulates in revaluation surplus; decrease reverses prior surplus in OCI, then goes to profit or loss; excess of revaluation over carrying amount is not profit.

Inventory is measured at the lower of cost and net realizable value; cost includes purchase price, conversion costs, and costs to bring inventory to location and condition; NRV = estimated selling price − costs to complete and sell.

Consolidation rule: control exists when the parent has power over the investee, exposure to variable returns, and ability to use power to affect returns. Intra-group balances, income, and unrealized profit are eliminated in full.

Impairment: compare carrying amount with recoverable amount = higher of fair value less costs of disposal and value in use; recognize loss immediately in profit or loss unless the asset is revalued.

Statement of cash flows classifies operating, investing, and financing; interest and dividends paid may be operating or financing per policy, but classification must be consistent; non-cash transactions are disclosed separately.

Ratio formulas: current ratio = current assets/current liabilities; quick ratio = (current assets − inventory)/current liabilities; gearing = debt/(debt + equity); ROCE = EBIT/capital employed.

Cost behavior: fixed cost is constant in total within the relevant range; variable cost is constant per unit; semi-variable cost has both elements and is split using high-low: variable rate = (cost at high − cost at low)/(high activity − low activity).

Contribution margin = sales − variable costs; contribution per unit = selling price − variable cost per unit; break-even units = fixed costs/contribution per unit; break-even revenue = fixed costs/contribution margin ratio.

Margin of safety = (budgeted sales − break-even sales)/budgeted sales; target profit units = (fixed costs + target profit)/contribution per unit.

Absorption costing includes fixed production overhead in product cost; marginal costing expenses it in the period. Difference in profit = change in inventory units × fixed overhead absorption rate per unit.

Relevant costing: include future incremental cash flows, exclude sunk costs, allocated common fixed costs, and non-cash items; opportunity cost of a scarce resource is included.

Limiting factor decision: rank products by contribution per unit of scarce resource, not by contribution per unit or gross profit.

Standard costing variances: material price = (standard price − actual price) × actual quantity; material usage = (standard quantity − actual quantity) × standard price; labor rate and efficiency variances follow the same pattern.

Flexible budget compares actual results with budgeted revenue and costs for the actual activity level; a static budget comparison mixes volume and price effects.

Audit risk model: audit risk = inherent risk × control risk × detection risk; detection risk is the only component the auditor controls, so higher inherent or control risk requires lower detection risk and more substantive work.

Assertions tested: occurrence, completeness, accuracy, cut-off, classification for transactions; existence, rights and obligations, completeness, valuation and allocation for balances.

Independence threats: self-interest, self-review, advocacy, familiarity, intimidation; safeguards include rotation, independent review, and declining engagements where safeguards are insufficient.

Materiality: overall materiality is often a percentage of profit before tax, revenue, or total assets; performance materiality is set below overall materiality to reduce aggregation risk.

Audit evidence is more reliable when obtained from independent external sources, from the auditor's own procedures, and in documentary form; external confirmation is strong evidence for existence, not for valuation.

Going concern: if material uncertainty exists but disclosure is adequate, issue an unmodified opinion with a separate 'Material Uncertainty Related to Going Concern' section; if disclosure is inadequate, qualify or disclaim.

Opinion types: unmodified, qualified (material but not pervasive), adverse (material and pervasive misstatement), disclaimer (inability to obtain sufficient evidence, material and pervasive).

Sampling: sampling risk is the risk the conclusion based on a sample differs from the conclusion on the whole population; non-sampling risk arises from human error or inappropriate procedures.

Subsequent events: adjust the financial statements for conditions existing at year-end; disclose non-adjusting events that are material; auditor responsibility extends to the date of the audit report.

Income tax rates under the Myanmar Income Tax Law: resident citizens and resident foreigners are taxed on a progressive scale up to 25% on salary income; non-resident foreigners pay 25% flat on Myanmar-source salary; companies pay 22% (with a higher rate for entities under the Myanmar Investment Law, per prevailing rules).

Residence: a citizen is resident if domiciled in Myanmar; a foreigner is resident if living in Myanmar for at least 183 days in the income year. Residents are taxed on worldwide income; non-residents on Myanmar-source income only.

Commercial tax: standard rate is 5% on most goods and services; specific goods and services carry different rates (for example, 8% on certain services and higher rates on motor vehicles, fuel, and alcohol), so the rate must be checked per schedule.

Specific goods tax applies to designated goods such as tobacco, alcohol, and vehicles, in addition to commercial tax; it is collected at the import or production stage.

Capital gains on sale of capital assets are taxed at 10% for residents and non-residents on Myanmar-source gains, with a lower rate for certain assets such as shares in some cases; gains on disposal of a capital asset are computed as sale proceeds minus cost and allowable expenses.

Withholding tax: payments to residents for services and certain contracts attract withholding at prescribed rates; payments to non-residents attract withholding on Myanmar-source income, and the withheld amount is a final tax for non-residents in defined cases.

Deductions and allowances: business expenses must be incurred wholly and exclusively for producing income; depreciation is allowed at prescribed rates by asset class; donations to approved charities and certain reliefs are allowed subject to limits.

Tax administration: annual income tax return is generally filed within three months of the end of the income year; late filing attracts penalties and interest; tax audit and assessment are administered by the Internal Revenue Department.

Income year for companies generally follows the financial year adopted by the company; for individuals it is the fiscal year from 1 April to 31 March.

A contract requires offer, acceptance, consideration, intention to create legal relations, and capacity; consideration must be sufficient but need not be adequate; past consideration is generally not valid.

Terms versus representations: terms are contractual and enforceable; exemption clauses are construed contra proferentem, and liability for death or personal injury cannot be excluded.

Company law under the Myanmar Companies Law 2017: a private company has restrictions on share transfer and a cap on members (up to 50, excluding employees); a public company may offer shares to the public and must comply with prospectus and disclosure rules.

Directors owe duties of care and diligence, good faith, avoidance of conflicts, and not to misuse company property or information; the business judgment rule protects informed, good-faith decisions.

Corporate governance codes emphasize board independence, separation of chair and CEO, audit committee independence, whistleblowing channels, and disclosure of related-party transactions.

Agency problem: managers may pursue personal goals over shareholder interests; mitigation includes performance-based pay, independent boards, and transparent reporting.

Insolvency and liquidation: a company may be wound up voluntarily or by court order; preferential debts and secured creditors rank ahead of unsecured creditors in distribution.

Price elasticity of demand = percentage change in quantity demanded/percentage change in price; demand is elastic when the absolute value exceeds 1, inelastic when below 1.

GDP measures the market value of final goods and services produced within a country's borders in a period; nominal GDP uses current prices, real GDP uses base-year prices.

Inflation is a sustained rise in the general price level; it erodes purchasing power and is measured by consumer price indices; demand-pull and cost-push are the main causes.

Monetary policy tools: open market operations, reserve requirements, policy interest rate, and credit controls; expansionary policy lowers rates and increases money supply.

Fiscal policy: expansionary policy raises government spending or cuts taxes; the multiplier effect is larger when the marginal propensity to consume is higher.

Exchange rate regimes: fixed, floating, and managed float; depreciation of the domestic currency makes exports cheaper and imports more expensive.

Market structures: perfect competition has many firms and homogeneous products; monopoly has one firm and barriers to entry; oligopoly has few interdependent firms; monopolistic competition has differentiated products.

Comparative advantage: a country gains from trade by specializing in goods with lower opportunity cost, even if it has an absolute disadvantage in all goods.

Time value of money: future value = present value × (1 + r)^n; present value = future value/(1 + r)^n; annuity present value factor = [1 − (1 + r)^−n]/r.

Net present value = present value of cash inflows − initial investment; accept projects with positive NPV; IRR is the discount rate at which NPV equals zero, and accept if IRR exceeds the cost of capital.

Cost of capital: WACC = (E/V) × Ke + (D/V) × Kd × (1 − tax rate); use market values where available.

CAPM: required return = risk-free rate + beta × market risk premium; beta measures systematic risk, which cannot be diversified away.

Working capital: cash conversion cycle = inventory days + receivable days − payable days; shorter cycle frees cash.

Dividend policy: residual theory pays dividends only after funding positive-NPV projects; clientele effects explain investor preference for dividend or growth.

Leverage: financial leverage raises EPS volatility and financial risk; operating leverage arises from fixed operating costs and raises business risk.

Bond valuation: price = present value of coupon payments plus present value of face value, discounted at the yield to maturity; price moves inversely with yields.

Internal controls over IT: general controls (access management, change management, backup, physical security) support application controls (input, processing, output controls).

Segregation of duties in IT: developers should not have production access; user access reviews, privileged access monitoring, and logging are key detective controls.

Data integrity controls: hash totals, record counts, check digits, validation rules, and reconciliation of batch totals detect errors and tampering.

Confidentiality principle: an accountant must not disclose client information without authority or legal obligation; disclosure is permitted where required by law, in legal proceedings, or with client consent.

Integrity and objectivity: an accountant must avoid conflicts of interest and must not accept gifts or hospitality that could impair professional judgment.

Professional competence and due care: maintain current technical knowledge and do not undertake work without the competence to perform it.

Threats to ethics compliance: self-interest, self-review, advocacy, familiarity, and intimidation; safeguards include education, review, and consultation with professional bodies.

Cyber risk basics: phishing, ransomware, and social engineering target human behavior; controls include multi-factor authentication, patching, and staff awareness training.

Conceptual framework qualitative characteristics: relevance (predictive value, confirmatory value, materiality) and faithful representation (complete, neutral, free from error); comparability, verifiability, timeliness, understandability are enhancing.

Accrual basis recognizes revenue when performance obligation is satisfied and expenses when incurred, not when cash moves; the revenue model uses five steps: identify contract, identify obligations, determine price, allocate price, recognize on satisfaction.

Depreciation methods: straight-line = (cost − residual)/useful life; reducing balance = carrying amount × rate; units of production = (cost − residual) × units used/total units. Depreciation starts when the asset is available for use.

Revaluation model: increase goes to OCI and accumulates in revaluation surplus; decrease reverses prior surplus in OCI, then goes to profit or loss; excess of revaluation over carrying amount is not profit.

Inventory is measured at the lower of cost and net realizable value; cost includes purchase price, conversion costs, and costs to bring inventory to location and condition; NRV = estimated selling price − costs to complete and sell.

Consolidation rule: control exists when the parent has power over the investee, exposure to variable returns, and ability to use power to affect returns. Intra-group balances, income, and unrealized profit are eliminated in full.

Impairment: compare carrying amount with recoverable amount = higher of fair value less costs of disposal and value in use; recognize loss immediately in profit or loss unless the asset is revalued.

Statement of cash flows classifies operating, investing, and financing; interest and dividends paid may be operating or financing per policy, but classification must be consistent; non-cash transactions are disclosed separately.

Ratio formulas: current ratio = current assets/current liabilities; quick ratio = (current assets − inventory)/current liabilities; gearing = debt/(debt + equity); ROCE = EBIT/capital employed.

Cost behavior: fixed cost is constant in total within the relevant range; variable cost is constant per unit; semi-variable cost has both elements and is split using high-low: variable rate = (cost at high − cost at low)/(high activity − low activity).

Contribution margin = sales − variable costs; contribution per unit = selling price − variable cost per unit; break-even units = fixed costs/contribution per unit; break-even revenue = fixed costs/contribution margin ratio.

Margin of safety = (budgeted sales − break-even sales)/budgeted sales; target profit units = (fixed costs + target profit)/contribution per unit.

Absorption costing includes fixed production overhead in product cost; marginal costing expenses it in the period. Difference in profit = change in inventory units × fixed overhead absorption rate per unit.

Relevant costing: include future incremental cash flows, exclude sunk costs, allocated common fixed costs, and non-cash items; opportunity cost of a scarce resource is included.

Limiting factor decision: rank products by contribution per unit of scarce resource, not by contribution per unit or gross profit.

Standard costing variances: material price = (standard price − actual price) × actual quantity; material usage = (standard quantity − actual quantity) × standard price; labor rate and efficiency variances follow the same pattern.

Flexible budget compares actual results with budgeted revenue and costs for the actual activity level; a static budget comparison mixes volume and price effects.

Audit risk model: audit risk = inherent risk × control risk × detection risk; detection risk is the only component the auditor controls, so higher inherent or control risk requires lower detection risk and more substantive work.

Assertions tested: occurrence, completeness, accuracy, cut-off, classification for transactions; existence, rights and obligations, completeness, valuation and allocation for balances.

Independence threats: self-interest, self-review, advocacy, familiarity, intimidation; safeguards include rotation, independent review, and declining engagements where safeguards are insufficient.

Materiality: overall materiality is often a percentage of profit before tax, revenue, or total assets; performance materiality is set below overall materiality to reduce aggregation risk.

Audit evidence is more reliable when obtained from independent external sources, from the auditor's own procedures, and in documentary form; external confirmation is strong evidence for existence, not for valuation.

Going concern: if material uncertainty exists but disclosure is adequate, issue an unmodified opinion with a separate 'Material Uncertainty Related to Going Concern' section; if disclosure is inadequate, qualify or disclaim.

Opinion types: unmodified, qualified (material but not pervasive), adverse (material and pervasive misstatement), disclaimer (inability to obtain sufficient evidence, material and pervasive).

Sampling: sampling risk is the risk the conclusion based on a sample differs from the conclusion on the whole population; non-sampling risk arises from human error or inappropriate procedures.

Subsequent events: adjust the financial statements for conditions existing at year-end; disclose non-adjusting events that are material; auditor responsibility extends to the date of the audit report.

Income tax rates under the Myanmar Income Tax Law: resident citizens and resident foreigners are taxed on a progressive scale up to 25% on salary income; non-resident foreigners pay 25% flat on Myanmar-source salary; companies pay 22% (with a higher rate for entities under the Myanmar Investment Law, per prevailing rules).

Residence: a citizen is resident if domiciled in Myanmar; a foreigner is resident if living in Myanmar for at least 183 days in the income year. Residents are taxed on worldwide income; non-residents on Myanmar-source income only.

Commercial tax: standard rate is 5% on most goods and services; specific goods and services carry different rates (for example, 8% on certain services and higher rates on motor vehicles, fuel, and alcohol), so the rate must be checked per schedule.

Specific goods tax applies to designated goods such as tobacco, alcohol, and vehicles, in addition to commercial tax; it is collected at the import or production stage.

Capital gains on sale of capital assets are taxed at 10% for residents and non-residents on Myanmar-source gains, with a lower rate for certain assets such as shares in some cases; gains on disposal of a capital asset are computed as sale proceeds minus cost and allowable expenses.

Withholding tax: payments to residents for services and certain contracts attract withholding at prescribed rates; payments to non-residents attract withholding on Myanmar-source income, and the withheld amount is a final tax for non-residents in defined cases.

Deductions and allowances: business expenses must be incurred wholly and exclusively for producing income; depreciation is allowed at prescribed rates by asset class; donations to approved charities and certain reliefs are allowed subject to limits.

Tax administration: annual income tax return is generally filed within three months of the end of the income year; late filing attracts penalties and interest; tax audit and assessment are administered by the Internal Revenue Department.

Income year for companies generally follows the financial year adopted by the company; for individuals it is the fiscal year from 1 April to 31 March.

A contract requires offer, acceptance, consideration, intention to create legal relations, and capacity; consideration must be sufficient but need not be adequate; past consideration is generally not valid.

Terms versus representations: terms are contractual and enforceable; exemption clauses are construed contra proferentem, and liability for death or personal injury cannot be excluded.

Company law under the Myanmar Companies Law 2017: a private company has restrictions on share transfer and a cap on members (up to 50, excluding employees); a public company may offer shares to the public and must comply with prospectus and disclosure rules.

Directors owe duties of care and diligence, good faith, avoidance of conflicts, and not to misuse company property or information; the business judgment rule protects informed, good-faith decisions.

Corporate governance codes emphasize board independence, separation of chair and CEO, audit committee independence, whistleblowing channels, and disclosure of related-party transactions.

Agency problem: managers may pursue personal goals over shareholder interests; mitigation includes performance-based pay, independent boards, and transparent reporting.

Insolvency and liquidation: a company may be wound up voluntarily or by court order; preferential debts and secured creditors rank ahead of unsecured creditors in distribution.

Price elasticity of demand = percentage change in quantity demanded/percentage change in price; demand is elastic when the absolute value exceeds 1, inelastic when below 1.

GDP measures the market value of final goods and services produced within a country's borders in a period; nominal GDP uses current prices, real GDP uses base-year prices.

Inflation is a sustained rise in the general price level; it erodes purchasing power and is measured by consumer price indices; demand-pull and cost-push are the main causes.

Monetary policy tools: open market operations, reserve requirements, policy interest rate, and credit controls; expansionary policy lowers rates and increases money supply.

Fiscal policy: expansionary policy raises government spending or cuts taxes; the multiplier effect is larger when the marginal propensity to consume is higher.

Exchange rate regimes: fixed, floating, and managed float; depreciation of the domestic currency makes exports cheaper and imports more expensive.

Market structures: perfect competition has many firms and homogeneous products; monopoly has one firm and barriers to entry; oligopoly has few interdependent firms; monopolistic competition has differentiated products.

Comparative advantage: a country gains from trade by specializing in goods with lower opportunity cost, even if it has an absolute disadvantage in all goods.

Time value of money: future value = present value × (1 + r)^n; present value = future value/(1 + r)^n; annuity present value factor = [1 − (1 + r)^−n]/r.

Net present value = present value of cash inflows − initial investment; accept projects with positive NPV; IRR is the discount rate at which NPV equals zero, and accept if IRR exceeds the cost of capital.

Cost of capital: WACC = (E/V) × Ke + (D/V) × Kd × (1 − tax rate); use market values where available.

CAPM: required return = risk-free rate + beta × market risk premium; beta measures systematic risk, which cannot be diversified away.

Working capital: cash conversion cycle = inventory days + receivable days − payable days; shorter cycle frees cash.

Dividend policy: residual theory pays dividends only after funding positive-NPV projects; clientele effects explain investor preference for dividend or growth.

Leverage: financial leverage raises EPS volatility and financial risk; operating leverage arises from fixed operating costs and raises business risk.

Bond valuation: price = present value of coupon payments plus present value of face value, discounted at the yield to maturity; price moves inversely with yields.

Internal controls over IT: general controls (access management, change management, backup, physical security) support application controls (input, processing, output controls).

Segregation of duties in IT: developers should not have production access; user access reviews, privileged access monitoring, and logging are key detective controls.

Data integrity controls: hash totals, record counts, check digits, validation rules, and reconciliation of batch totals detect errors and tampering.

Confidentiality principle: an accountant must not disclose client information without authority or legal obligation; disclosure is permitted where required by law, in legal proceedings, or with client consent.

Integrity and objectivity: an accountant must avoid conflicts of interest and must not accept gifts or hospitality that could impair professional judgment.

Professional competence and due care: maintain current technical knowledge and do not undertake work without the competence to perform it.

Threats to ethics compliance: self-interest, self-review, advocacy, familiarity, and intimidation; safeguards include education, review, and consultation with professional bodies.

Cyber risk basics: phishing, ransomware, and social engineering target human behavior; controls include multi-factor authentication, patching, and staff awareness training.