UPSC COMMERCE & ACCOUNTANCY OPTIONAL SYLLABUS

For a UPSC CSE aspirant, the optional subject is also an important subject. In the UPSC mains exam, optional marks have two papers, Paper 1 and Paper 2. Each paper is of 250 marks which makes a total of 500 marks. The UPSC optional subject list contains 48 subjects in total, one of which is Commerce & Accountancy.

  • This exam tests the candidates’ understanding of the concepts and then they apply their commerce and accountancy knowledge to problems faced by the government and businesses.
  • The syllabus mainly focuses on management-related commerce & accountancy.
  • Candidates with commerce background, Chartered Accountants, and people working in finance or finance-related profiles can choose this optional subject.

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SYLLABUS FOR PAPER I

(A) Accounting and Finance Accounting, Taxation & Auditing

  • Financial Accounting:
    • Accounting as a Financial Information System.
    • Impact of Behavioural Sciences.
    • Accounting Standards e.g., Inventories, Research and Development Costs, Accounting for Depreciation, Long-term Construction Contracts, Revenue Recognition, Contingencies, Fixed Assets, Foreign Exchange Transactions, Investments, and Government Grants, Cash FlowStatement, 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.
    • Absorption, Amalgamation, and Reconstruction of Companies.
  • Cost Accounting:
    • Cost Accounting: Functions, and Nature.
    • Installation of Cost Accounting System.
    • Cost Concepts related to Profit Planning, Income Measurement, Cost Control, and DecisionMaking.
    • Job Costing, Process Costing, Activity Based Costing- Methods.
    • Volume cost-profit Relationship as a tool for Profit Planning.
    • Incremental Analysis/ Differential Costing as a Tool of Pricing Decisions, Product Decisions, ShutDown Decisions, Make or Buy Decisions, etc.
    • Techniques of Cost Reduction and Cost Control: Budgeting as a Tool of Planning and Control. Standard Costing and Variance Analysis.
    • Responsibility Accounting and Divisional Performance Measurement.
  • Taxation:
    • Income Tax: Definitions, Incomes which do not form part of total income, Basis of Charge. Simple problems regarding Computation of Income (of Individuals only) in Salaries, Income from House Property, Profits and Gains from Business or Profession, Capital Gains, Income from other sources, Income of other Persons included in Assessees Total Income.
    • Deductions from Gross Total Income.
    • Set – Off and Carry Forward of Loss.
    • Salient Features/Provisions Related toVAT and Services Tax.
  • Auditing: Company Audit:
    • Audit related to Divisible Profits, Dividends, Tax audit, Special investigations.
    • Audit of Insurance, Banking, Non-Profit Organizations, and CharitableSocieties/Trusts/Organizations.

(B) 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 of 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 ofLeverages (Operating, Financial and Combined), EBIT- EPS Analysis, and Other Factors. DividendDecisions and Valuation of Firm: Walters Model, MM Thesis, Gordan 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.
    • CorporateRestructuring with focus on Mergers and Acquisitions (Financial aspects only)
  • Financial Markets and Institutions:
    • An Overview of the Indian Financial System.
    • Money Markets: Structure, Instruments, and Participants.
    • Reforms in the Banking sector. Monetary and Credit Policy of RBI. RBI as a Regulator. Commercial Banks.
    • Capital Market: Primary and Secondary Market. Financial Market Instruments and Innovative Debt Instruments, SEBI as a Regulator.
    • Financial Services: Mutual Funds, Credit Rating Agencies, Venture Capital, Insurance, and IRDA.

SYLLABUS OF PAPER II

(A) Organisation Theory and Behaviour, Human Resource Management, and Industrial Relations

  • Organization Theory:
    • Nature and Concept of Organisation, Organizational Goals – Primary and secondary goals, External Environment of Organizations- Technological, Political, Social, Economical, and Legal. Single, and Multiple Goals. Management by Objectives.
    • Evolution of OrganisationTheory: Classical, Neo-classical, and Systems Approach.
    • Modern Concepts of Organisation Theory: Organisational Design, Organisational Structure, and Organisational Culture.
    • Organizational Design- Basic Challenges, Differentiation and Integration Process, Centralization and Decentralization Process, Standardization / Formalization, and Mutual Adjustment. Coordinating Formal and InformalOrganizations. 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, PowerStructure, and Politics. Impact of Information Technology on Organizational Design and Structure.
    • Managing Organizational Culture.
  • Organization 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.

(B) Human Resources Management and Industrial Relations

  • Human Resources Management (HRM):
    • Meaning, Nature and Scope of HRM, Human resource planning, Job Description, Job Analysis, Job Specification, Selection Process, Recruitment Process, Orientation and Placement, Training and Development Process, Performance Appraisal and 360 FeedBack, Salary, and Wage Administration, Employee Welfare, Job Evaluation, Promotions, Transfers, and separations.
  • Industrial Relations (IR):
    • Meaning, Nature, Importance and Scope of IR, Formation of Trade Unions, Trade Union Movement in India, Trade Union Legislation. Problems of Trade Unions in India, Recognition of Trade Unions. Impact of Liberalization on the Trade Union Movement.
    • Nature of Industrial Disputes: Lockouts, and strikes, Causes of Disputes, Settlement, and prevention of Disputes.
    • Workers Participation in Management: Philosophy, Rationale, Present Day Status, and Future Prospects.
    • Adjudication and Collective Bargaining.
    • Industrial Relations in Public Enterprises, Absenteeism, and labor Turnover in Indian Industries and their Causes and Remedies.
    • ILO and its Functions.
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