ICAP CAF study guide
ICAP CAF · Work through your exam, one topic at a time.
The Certificate in Accounting and Finance (CAF) is a stage of the Institute of Chartered Accountants of Pakistan (ICAP) chartered accountancy qualification, sitting within the Institute's Education Scheme 2021 between the Pre-Requisite Competencies (PRC) stage and the Certified Finance and Accounting Professional (CFAP) stage, with the Multi-Subject Assessment (MSA) also appearing in the same scheme. CAF is aimed at students who have completed the entry requirements for the CA qualification and are building the technical foundation of the profession. The ICAP CAF study guide has 8 sections and about 2,507 words.
01Financial Accounting and Reporting-I: Conceptual Framework and Core IFRS
Start with the Conceptual Framework: objective of general purpose financial statements, qualitative characteristics (relevance and faithful representation as fundamental), the elements, and the measurement bases. Then presentation: IAS 1 requires fair presentation, going concern, accrual basis, materiality, consistency and comparatives.
373 words, about 2 min02Tax Practices: Income Tax Ordinance 2001 and Sales Tax Act 1990
Tax Practices in Pakistan means the Income Tax Ordinance 2001 and the Sales Tax Act 1990. For income tax you must be able to determine the residential status of an individual, company and association of persons; classify receipts under the five heads (salary, property, business, capital gains, other sources); apply admissible and inadmissible deductions; compute depreciation and initial allowance; apply rates and credits; and explain withholding, return filing, assessment and appeal machinery.
332 words, about 2 min03Cost and Management Accounting: Costing Systems, Decision Tools and Variances
Be fluent in cost classification (direct versus indirect, fixed versus variable versus semi-variable, product versus period), material and labour costing, and overhead treatment. Know job, batch and contract costing, process costing with normal loss, abnormal loss or gain and equivalent units, joint and by-product apportionment, and activity-based costing.
319 words, about 2 min04Business Law: Contract, Sale of Goods, Partnership and Negotiable Instruments
Know the elements of a valid contract: offer, acceptance, lawful consideration, capacity, free consent and lawful object. Distinguish an invitation to offer from an offer, and remember that a counter-offer destroys the original offer.
309 words, about 2 min05Financial Accounting and Reporting-II: Transaction and Group Reporting Standards
FAR-II moves to transaction-level and group standards. IFRS 15 uses a five-step model: identify the contract, identify performance obligations, determine the transaction price, allocate it on relative standalone selling prices, and recognise revenue when control passes, either over time or at a point in time.
306 words, about 2 min06Managerial and Financial Analysis: Ratios, Interpretation and Decision Analysis
Build ratios in four groups: liquidity (current, quick, cash), efficiency (inventory days, receivable days, payable days, asset turnover), gearing (debt to equity, interest cover) and profitability (gross margin, net margin, ROCE, ROE). Interpret them together: a high current ratio may signal slow-moving inventory rather than strength.
284 words, about 1 min07Company Law: Companies Act 2017 - Formation, Governance and Meetings
Know the company types: public, private, single member company, plus the separate limited liability partnership regime. Incorporation requires name reservation, memorandum and articles, a registered office and prescribed filings with the registrar (SECP).
303 words, about 2 min08Audit and Assurance: Risk, Evidence and Reporting
Audit risk = inherent risk x control risk x detection risk. Entity-level risks are assessed at planning; the auditor responds by designing substantive procedures.
281 words, about 1 min