Friday, 11 September 2015

I have failed CA IPCC twice. How should I prepare so that I pass?

Considering that you have taken the IPCC exams twice before, I would suggest the following approach for tackling each of the subjects.

1. Accountancy: If your basics are clear, this subject is not too difficult to crack. There are two main problems that students face while attempting this paper:
a) Getting intimidated by the size of the question (which may often spread across 2 pages) and the amount of information given;
b) Not being able to attempt all the questions in time.

Most questions of accounting, esp. those of Non-Profit Organization Accounts, Internal Reconstruction, Amalgamation, etc. have a lot of information that integrates together to form an answer. While this may scare you initially, it also offers you ample opportunity to gain marks for each small part that you can understand and present well enough. So, please do not worry about the size. You would know the formats of an Income & Expenditure Account, a Balance Sheet, a P&L account and a few common ledgers that the question may ask you to draft.


First, make all those formats and then start filling in entries one at a time from the given information. It is important to read the complete question once to recognize aspects that may be related and then tacking them together.

Remember that even if you don't know the answer to the whole question, there may be a lot of aspects that you would know individually. Focus on getting them right and grab whatever little you can for those steps. Do not leave a question out completely only because you think you don't know how to tackle it in totality.

I would suggest reading from Dr. P. C. Tulsian's book for self-study. You could also get yourself a copy of Fundamentals of Accounting by R. L. Gupta and Radhaswamy (published by Sultan Chand & Sons). The latter will be your guide for accountancy all through your life, and help you understand concepts that may not have been well explained in any other book.

Get your basics right. If needed, go back and refer to accounting books from the XI and XII grade. There is no shame in brushing up your basics. I am a qualified CA and I refer to a number of books from CA IPCC often. Does that make me any less of a CA? The act really helps me be sure about what I am doing whenever I am confused about any accounting treatment, and there is no shame in rechecking.

Also, practice, practice, practice!

2. Cost Accounting & Financial Management: Like Financial Accounting, this is again a subject that needs a strong foundation before you move ahead with it. Please ensure that the concepts from Material, Labor and Overheads are on your tips. Moving on from them, the two most important chapters are Marginal Costing and Standard Costing. Both these chapters have a lot of formulae, and you will be very well off if you care to understand the logic behind the formulae than just learning them up.

I would suggest referring to Padhuka's book on Costing & FM for this subject. In my opinion, the author has tried to explain the logic behind every formula very well and in a step-wise manner.

For Financial Management, till the time your basics of Time Value of Money and Annuity are not clear, you cannot afford to move forward. Cost of Capital is again very important for you to understand chapters like Working Capital Management, Capital Budgeting, etc.

You may study from books suggested for B. Com students to start with and then progress to CA level questions.

Also, practice, practice, practice!

3. Taxation: Indirect Taxation is worth 50 marks and it's something that you must not ignore at all because the amount of effort that you may have to put into to understand Service Tax and VAT will be nothing in comparison to the amount of time that Income Tax commands. Secure the marks for questions related to Indirect Tax at the earliest.

My suggestion again will be Padhuka's book by G. Sekar. I used it for IPCC, later for CA Final, and I still use it at my office to refer to provisions of the law whenever I feel the need to (almost every day).

I would suggest that you do an ABC Analysis in Income Tax and identify all important questions. You will be able to easily identify them in G. Sekar's book by looking at the number of times each question has been asked in the exams before. There may be a lot of sections which may not be as important such as 80-IB and 80-IA, etc. Leave them out for later. First get done with the important stuff.

Also, practice, practice, practice!

4. Law: I think more than due to reasons of not knowing the law, most students fail because they don't know how to present the law.

You should break your answer into:
(i) Facts of the case: restating of facts given in the question in points form
(ii) Point of contention: restating what the question asks you to examine
(iii) Provisions of the law: list down all the points from the law that you know. This is the main crux of your answer.
(iv) Conclusion: present how the provisions apply to the current case and state your conclusion
(v) Relevant case laws and sections: (if you've learnt these)

Most students just present the provisions of the law. However, the points mentioned above will help you present your answer in a much better way.

I would also suggest learning every point in law. It's not like audit where you ma leave out a few points or make some of your own through logic. The law clearly states what it does. Learn it up!

Also, learn, learn, learn.

5. Advanced Accounting: This subject is more about learning various formats of presentation of accounting information than about the basics. The type of questions that you may be asked are limited because it tests you on how the accounts for electricity, banking, and insurance companies are statutorily required to be presented. It just takes some practice to get a hang of these questions and this is the most scoring subject of IPCC second group.

My recommendation is Dr. Tulsian's book again.

Also, learn and practice, learn and practice, learn and practice.

6. Auditing: This subject is so logical, it could be called a science. I personally believe that Auditing is a subject that you study well when you actually do it. Instead of treating it as a purely theoretical subject, I would suggest you to open your mind and think logically as to how you will check the various records.

Padhuka's book is so detailed, I thought it did a wonderful job of opening my mind to the various types of accounting records and the manner in which they can be checked.

I observe students picking up books by their size. Please pick up a decent book for audit and not the usual notes that you may think are really popular in the market.

Read, then re-read, then re-read. You don't even need to learn it. It's logical. Just keep re-reading it till you understand it fully.

7. Information Technology and Strategic Management: These subjects require learning. Pick those books up, tell yourself that you have to fall in love with them and keep learning.

These are two subjects that I had diligently made notes for without depending on any author's notes to prepare for the exam. Keep revisiting your notes again and again, so that you have revised these subjects enough number of times.

Now for some general points:

1. Please do not pick a book based on its size. I see a number of students going for "thinner" books, thinking that these "notes" will give them all that they need to pass. Reading from a proper text book will give you a better understanding of the subject. Don't judge a book by its size; pick a fat one if it explains things better. You're preparing to be a CA; don't shy away from big books.

2. Please do not ignore the Study Material, Practice Manuals, RTP's and Suggested Answers. In fact, leave everything else and do just the ICAI material. I feel a number of students don't even care to look at the official material and place their complete trust in their tutor's notes. No matter how well qualified your tutor may be, there is nothing more authentic than a source from the ICAI.

3. The Practice Manuals are your Bible/Quran/Gita/Granth Sahib. You just cannot afford to leave out the Practice Manual. If you leave them out, our friendship is over. Over!

4. Just do your work and leave the rest to God.

Wish you the best.

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