In my previous post, I shared the strategy to score 90+ in the Accounting paper in the CA Intermediate exams. This post talks about how to study well for the portion which has the heaviest weightage in the Accounting syllabus - Accounting Standards.
If you haven't yet read my previous post, you can access it here: How to study Accounts for CA Intermediate exams?
As you know, the Accounting Standards have the highest weightage in both CA Inter and CA Final exams. As such, you just cannot afford to ignore them or take them lightly. Yes, some of the Standards may seem pretty boring to read, but there is obviously a way out. This post aims to throw light on the way how you can effectively study Accounting Standards for your exams and score good marks out of the questions on Accounting Standards.
How to Study? - The Strategy
The first time you come face-to-face with the Accounting Standards is probably during CA Foundation. There is a chapter where you are introduced to what the Accounting Standards are, why they are relevant, and also the entire list of the Accounting Standards issued till date.
But the first time you are really staring at a proper Accounting Standard is during your CA Intermediate days. I know most of you would just not have gone beyond the contents page of the Accounting Pronouncements book, let alone reading it. But if I talk about my experience, I studied all the Accounting Standards of CA Intermediate by myself, and that too, from that Accounting Pronouncements book which you hate to open.
Many people say that reading the bare Accounting Standards straight from the Accounting Pronouncements book provided to you by the ICAI is the worst thing to do. I don't know whether the 94 marks out of 100 I scored by doing just that is a sufficient counter to this notion.
Anyways, let me share all the strategies I used to study Accounting Standards -->
Step 1 | Read the bare Accounting Standards
This is of utmost importance if you are looking at conceptual clarity. Reading the bare Accounting Standards helps you to cover the entire content. You just need to read a particular standard like you read a novel or a newspaper. The aim here is not to memorize anything. It is just to familiarize yourself with the terminologies and the crux of what each Accounting Standard is saying.
Step 2 | Reading the Study Material or Class Notes
If anyone is trying to self-study the Accounting Standards, there cannot be anything more useful than the Study Material of the ICAI. It clearly explains the particular Standard in a simpler language, with illustrations and small caselets. Do remember that there have been innumerable instances when the ICAI has just copied and pasted these illustrations in the question paper also. So the Study Material is, in a way, indispensable.
For those taking Accounts classes, your task is a bit more tedious. You not only have to ensure that your tutor has covered the entire Standard, you also have to ensure that all the illustrations incorporated in the Study Material have also been done in class. If the answer to both these checkpoints is in the affirmative, you can afford to rely on your Class Notes and study from there.
Step 3 | Practice questions
Merely reading a particular standard will not help. Every Accounting Standard has some subtle nuances, which you will be able to identify only when you sit down to solve questions. The Study Material is the best starting point for this, and you may practice the questions in writing. This will only help in gaining better conceptual clarity and building long-term memory.
Step 4 | Being curious
Many people say that any particular Accounting Standard looks very different in theory, and in practice. It is like a day and night thing - such is the difference. So for you to have a very strong prep to be able to crack any question in the Exam from this area, it is best to have a curious mind. Try to follow daily business news and the CA Journal and look out for any article on Accounting Standards and any treatment of accounting transactions. For example, the treatment of depreciation followed by Reliance Jio is slightly different than what Bharti Airtel follows. The moment you come across such news, you should strengthen your own understanding and read the corresponding AS again to get a stronghold in that AS. You should try to form your own opinion on the treatment of any particular accounting transaction and see whether that is correct as per the corresponding Accounting Standard.
Step 5 | Read the Annual Reports of at least 1 listed company
This step is more important for the readers pursuing CA Intermediate at present. It is highly recommended that you read up the Annual Report of at least 1 listed company in India and look at how they have disclosed accounting transactions as per the Accounting Standards. You can also have a look at the presentation of financial statements as per Schedule III and the Notes to Accounts attached thereto. This is a great way to learn Accounting Standards away from the course books.
Step 6 | Reference books
While I personally do not recommend any reference books for Accounting Standards, except maybe, D. S. Rawat, you may still browse through some of them if you have the time. Of course, nothing beats the Baahubali of all books on AS - Dolphy D'Souza's book on AS. But that would be just too much in the preparation stage!
Step 7 | Regular revision
It is best to make short concept notes for each Accounting Standard you study. There are a lot of mind maps and charts also freely available on the Internet. Even ICAI has come out with a revision capsule for each paper. Whatever may be the source, the main aim is to retain what you have read and to keep it all fresh in the memory. You must keep in mind that you might not get to read the entire Standard again the day before the exams. So it is best to have condensed and concise notes prepared by yourself for easy and quick revision.
Step 8 | Judge what you are up against
To make your preparation regarding Accounting Standards complete, it is essential that you look up at the RTPs, MTPs and Past Papers of the ICAI and practice questions from there. You need to know what is the level of questions you are up against and what more you need to do in order to be able to successfully answer such questions.
This step is of particular relevance for the CA Final students reading this post, because the level of questions ranges from difficult to very difficult, with the language being twisty and confusing. The ICAI is known to bombard you with a lot of data (both relevant and irrelevant) in some of its questions and this tendency is more visible in CA Final.
The CA Intermediate, on the other hand, is a bit lighter on this note. The level of questions ranges from easy to moderate difficulty. You will find a lot of questions being case-based, rather than numerical. Even the questions asked in the Advanced Accounting paper are pretty much doable if you follow the above-mentioned steps.
Conclusion
Accounting Standards are something you just cannot ignore from the point of view of their importance. All the effort you put in now to study them will only help you in your career later - be in CA practice or in Auditing or in a job.
I hope this post gave you a fair idea and the direction to channelize your preparation with respect to Accounting Standards.
More in the Strategy Series:
Please feel free to get in touch with me for any queries, suggestions or feedback.
Thanks for reading:)