Why should you study "Finance"?

(This is reproduction of Author's response to a Question on Quora similar to the title question)

Let's start by saying this - You should do everything and anything you love to do (Unless it is Illegal, immoral or involves listening to Justin Bieber, kidding ;))

Now, that being said lets get to the point - Why Study (read "love") Finance -

• Finance is one of the most oldest and vital stream of studies -
  Think about this for a moment, one of the oldest problems in the history of mankind is either lack of money or lack of planning to use the excess money in hand, and; what is the solution : Study of Financial Concepts to put idle money to work and plan and/or prioritize the use of scarce funds
• Finance is everywhere -
  Every person needs to manage his financial resources, plan for children education, put adequate amount on the paper for planning retirement; in a nutshell that is "Personal Finance" for you.
  Now replace an individual by an organisation, think about M&As, Raising Capital, Equities, Debtor Management, Loans and Advances, Expansion/Contraction of business, that is "Corporate Finance" more or less. You notice the pattern, you do anything it will more or less would already have or will have intervention of Finance

  

• Finance can teach you a lot about life in general -
  At the risk of sounding extremely philosophical and a godman wannabe, I would like to draw your attention towards the astonishing similarities between life and finance; Compounding/Discounting, Opportunity Rate of Interest, Arbitrage.. the list goes on, you can google and find very interesting articles discussing the application of these concepts of finance to situations in life.
  I would like to mention the example of concept of "Valuation" here. Finance draws a clear cut line between "Value" and "Price" of something. There is a whole sub-stream under finance dedicated to distinguishing "Price" of an asset(i.e. What it is selling at/quoted at in Market) and the "Value" of an asset (i.e. How much it is worth, what is its intrinsic self). It ponders that you can benefit if you part ways with an asset which is overvalued(read hyped/overrated) and invest in something which is undervalued( read underdog). Let's throw a quote by Oscar Wilde here to illustrate the difference between valuation and pricing in life (and to make the answer a bit fancy and for just the sake of quoting Mr. Wilde)

  

  Now, isn't it a magnificent exercise which we should adopt in our lives also?
  Oscar Wilde said it on the basis of his blissful literary intellect. It seems like Mr. Buffet also agrees with the same on the basis of his blissful knowledge of finance

  

• It is very interesting and (still)evolving field of studies -
  It's entirely your choice to study and exercise the laid down concepts, trading techniques and theories, or; go ahead and tread in the unexplored sea of research and finding new stuff, patterns and observations
• Like many other fields out there, it pays well. You can earn well if you learn well.

Irrespective of every specific reason, almost all streams will cater to someone's curiosity and interest, land you in a comfortable job and offer you something new to learn, and, you can have "n" number of reasons to do a thing or not, BUT; do what makes you happy, study what you find interesting, because at the end of the day, that is the wisest thing you can do :)

Wealth Tax : Dates to be remembered in case of Deemed Assets

• If any asset is transferred to spouse during any previous year related to assessment year 1964-65 to 1971-72, then, it will not be treated as deemed assets of the transferor. This period will also apply if assets transferred to any person or association for the benefits of the spouse
• If any asset is transferred to daughter in law (i.e, son’s wife) before 1st of June, 1973 or transferred to any person or association for benefit of daughter in law before this date, then, it will not be treated as deemed assets of the transferor
• If any member of HUF has converted his own assets as assets of HUF before 1st January, 1970; then, it will not be treated as deemed asset of member who has converted such assets as assets of HUF

VIDEO : Format of Cash Flow Statement -Basics

Concept relevant for IPCC and equivalent Examinations

EXAM ALERT : Exams on 4th and 5th May,2013 postponed for some centers in Karnataka

Papers Postponed -

Group – 1, Paper 2, Strategic Financial Management

{Final Examination}

&,

Group – 1, Paper – 2, Business Laws, Ethics and Communications

{Intermediate/Integrated Professional Competence}

 

Centers Affected -

Bangalore, Belgaum, Bellary, Hubli, Mangalore, Mysore and Udupi

centre(s)

{For other cities scheduled is unchanged}

 

Dates on which postponed exams are

Re-scheduled -

18th May and 17th May 2013

 

Click

HERE

to read the concerned Notification dated 25th March, 2013

Applicability of Cloud Computing for Accounting & Taxation Firms

In the present day business functions and financial activities technology acts as a major requisite. Technology has changed the ways we exchange financial information and presentation of this interpreted and analyzed financial data to the end user or the client. Information technology has a great role in mounting the heights on which Business functions are today. From the e-filling of tax returns to maintaining of books of accounts electronically, technology has helped the facades of business functions particularly Accounting and Taxation in achieving flexibility and efficiency like never before. The technology has again played its role in giving new dimensions to these business functions via the model of Cloud Computing. 

Cloud computing is defined by a major web encyclopedia (Wikipedia) as “The delivery of computing and storage capacity as a service to a heterogeneous community of end-recipients”. In the layman’s language Cloud Computing is a technology based on utilization of resources which are stored on the cloud (the internet) in which the user of such resources need not have specialization in technology and he/she need not care about the infrastructure and management of these resources in the cloud. The user can have access to all of the required data and use the storage to save, amend or modify the requisite data without any “physical” storage, server and other infrastructure.

When we specifically consider the utility of Cloud Computing in view of the needs of Accounting and Taxation firms we find that many major dilemmas faced by these firms are sorted out by the technological model of Cloud Computing. Whenever we start thinking about the needs of an effective service providing firm we come up with three major needs/areas where if control of the firm is ensured, the probability of the operations of firm being carried out smoothly and profitably increases manifold. These three areas are –

1. Cost

2. Efficiency, &,

3. Future Returns

It seems quite obvious when we assume a firm having a cost effective structure with considerable efficiency and certainty; that the present technique of doing work of the firm i.e. Cloud Computing is “Future Proof” and this would continue to yield profits and won’t get outdated very soon due to changes in future parameters. With this great gift of Cloud Computing it becomes feasible to achieve control over these areas to a greater extent if not completely. In fact this assurance of cloud computing that reasonable control over these areas can be achieved by firms after implementing it, is the major driving force behind the urge to implement the Cloud Computing Structure.

 

How Implementation of Cloud Computing is Beneficial for Accounting and Taxation firms?

Accounting and Taxation firms can achieve control over the above discussed three areas by moving to Cloud Computing and derive major benefits in these areas after implementation of Cloud Computing as summarized below:

1. Cost –

• Reduce Expense
• No initial Investment
• Pay only for what you use
• Save “Money value of Time”
• Get an edge over the competition

2. Efficiency –

• On-Demand utility
• Flexibility
• Opportunity to focus your resources in doing “what you do best”, and leaving the hustle for IT management to Cloud vendor

3. Future –

• Cloud Computing is (near) future proof
• Be in pace with the internationally acclaimed firms
• Be the first among your competitors to embrace the future
• Cloud Computing being Eco friendly to a great extent, will help to reduce carbon emission and hence fulfill the firm’s CSR( Corporate Social Responsibility)

In a firm where Cloud Computation Environment is not present, firm’s management will employ offline software for Accounting and Taxation related work or a software utility which is either generalized or custom made for the firm and doesn’t need a 100% online access, in such a case the firm will have to bear expenses for application licensing( if the utility is tailor made), recurring membership fee(if the utility is bought without making it custom made for the firm), updation costs, development costs, maintenance costs etc. The firm can get rid of all these expenses by embracing Cloud Computing; as in Cloud Computing, the utility related expenses including those related to updation and maintenance are to be borne by the Cloud Vendor. The employer of the firm only needs to use the accounting/taxation/ERP utility effectively and all other actions are carried on within the cloud without employer’s interference or knowledge of such actions.

Similarly, in absence of Cloud Computing, a developing firm will need to take care of its hardware components and hosting components like storage devices (hard disks), servers, and power components. With advancement towards cloud computing, a developing firm can avoid these expenditures and can avoid (or reduce considerably) its future hardware investments and Power & Cooling expenses.

There also lies a CAPEX vs. OPEX angle in migration towards Cloud Computing; all of the firm’s hosting and storage costs are capital expenditure, while in the cloud, costs are completely operational (OPEX or operational expenditure),i.e., Pay-as-you-go.

 

Document Management – Made easy via Cloud

A great deal of ordeal faced by any Indian Accounting or taxation firm is bulk quantity of documents lying in their premises. At later stage of cloud computing implementation, documents are to be uploaded to the cloud. This will facilitate in reduction of physical storage and space consumption. And in addition to this reduction, there will be an additional saving of the time which would have otherwise been wasted in searching for a particular data or document. After healthy implementation of Cloud Computing, all that an employee needs for fetching a particular data/document is “Keywords” or “Phrases”

In above diagram, the central figure denotes the employee and A,B,C,D & E denote the physical units where a particular data might be stored.

It is evident from the above diagram that when an employee of accounting firm needs a particular details, for example, past financial data, rules and regulations regarding a particular case, taxation details etc., there might be two cases when he goes to search for the same.

The Companies Bill, 2011

--- CLICK HERE ---

Notification - Standardisation and Enhancement of Security Features in Cheque Forms-Migrating to CTS 2010 standards

RBI Circular DPSS.CO.CHD.No.1832/04.07.05/2009-2010 dated February 22, 2010 - "CTS 2010 Standard"

--Click here to View--

CA Final November 2012 Question Papers (Group 1) - Download

Financial Reporting  

  Strategic Financial Management 

 

Advanced Auditing & Professional Ethics

Corporate & Allied Laws

        

                                                   

RTP : CA Final November 2012 – Download Links

GROUP – 1

Financial Reporting

Strategic Financial Management

Advanced Auditing & Professional Ethics

Corporate & Allied Laws

 

GROUP – 2

Advanced Management Accounting

Information Systems Control & Audit

Direct Tax Laws

Indirect Tax Laws

Important Announcement: Non-applicability of taxable services in PCE-Paper 5: Taxation, IPCE-Paper 4: Taxation and Final-Paper 8: Indirect Tax Laws for November, 2012 examinations

Read it HERE on BOS Portal of ICAI

Exclusion of certain topics from ITSM Syllabus for November,2012 Attempt & Onwards

Certain topics from ITSM syllabus have been excluded for the purpose of November,2012 attempt and onwards, relevant announcement regarding the same can be read on BOS portal

 HERE

How Banks make Money ?–A Quick Analysis

How Banks make money is something which comes to mind of many of us when we hear about their reported profits, come across their financial statements and when we watch an analyst on any business news channel talking about profit maneuvers and earning or growth possibilities of banking sector. To answer this question we must take a look on different type of “banks” in the market.

In market we can come across either Pure Retail Banks (For example; Dena Bank, Allahabad Bank, SBBJ etc.), Pure Investment Banks (For example; JP Morgan, Goldman Sachs etc) and a an intermediate category of banks which act as both Retail and Investment Banks (For example; Axis Bank, IDBI, HSBC, ICICI, Citi Bank, Deutsche Bank, Kotak Mahindra Bank Limited etc.).

So, in a nutshell, so far this article has led us to a conclusion that majorly, banking revenue and profit generating activities can be divided into two broad categories:

Retail Banking –

Retail bank consists of activities which are generally coined to fulfill the financial needs and services required by a retail individual service consumer or small sized corporate entities. Major activities carried out by a bank in retail banking sphere of services are as follows:  

 

ü Organizing Loans & Mortgages for Retail Consumers

ü Maintaining Saving Accounts, Currents A/Cs etc

ü Maintaining FDs and other deposits etc

ü Furnishing Loans to Retail Consumers for their various needs

ü  Bank charges an interest rate (say X₁) from all its clients to whom it lends money accompanied with other charges like service fees, accountant maintenance fees, paperwork charges etc. and pays at an interest rate (say X₂)(of course X1>X2),  to all its clients who have deposited their money in the bank and hence, Retail Banks earn an interest margin(or Intt. Differential) on all of the above transactions plus pockets a fair amount of service charges. So, in a nutshell, tagline of Retail Banking is- Lend at high rates, Borrow at low rates and eat margin while doing both

Characteristics of Retail Banking: Low Risk, Solid Cash Flow Generating Sector (from bank’s perspective)

---

Investment Banking –

Investment Banking is one of the Chief Operations in modern banking, if you have heard of any major M&A activity recently, read about an upcoming IPO/FPO, or have seen a report on an upcoming business deal; you must consider that in one way or other, Investment Bank(s) are involved in these. Some of the Major Activities carried on by an Investment Bank are as follows:

ü  Proprietary Trading

§  Taking care of Bank’s Money at Hand

§  Using money with bank to make money

§  Taking Investment Decisions

§  Financial & Liquidity Management

ü  Market Making

§  Trade at several types of trading market to maintain flow in the market (let’s call it maintaining the demand-supply equilibrium on a micro level by banks for simplicity)

§  For understanding this feature of banking, we must understand that in a trading market, every prospective buyer of stuff needs a prospective seller who can sell him the requisite stuff as and when required and similarly a seller in a market needs a buyer already existing in the market, an investment bank monetizes this situation by acting as a seller or buyer at different times. Technically speaking, an investment bank carries a long or short position depending upon the type and need of the client and charges a “premium” or “margin” or “service charge” for doing the same

ü  Merger & Acquisitions

§  Investment Banks render services by the way of providing advice on Mergers

§  Every major prospective acquirer or absorber seeks the advice of Investment Banks to decide about the valuation of target, its growth prospective, market sentiment about the target etc

§  For such M&A advising and assistance bank charges advising fees which is known by various names, such fees can be fixed or may depend on the size of the deal

ü  Assisting Corporate Events

§  Assisting various corporate clients for corporate deals and other events including publicity events, brand management, service feedback procurement etc

§  Helping in issuance of Debt

ü  New Issues

§  Investment Bank also helps in issuance of New Equity (and even in issuance of further equity). In other words banks contribute in issuance of IPO/FPO

§  Investment Bank also acts as underwriter of shares and charges underwriting commission for the same

ü  Structured Products

§  Investment Banks assist in design and sales of various Financial Securities/Instruments or a group/combination of them

Characteristics of Investment Banking: High Risk, High Expected CF but proper financial management and employment of risk minimization tactics is required 

http://Ca4all.blogspot.com/

CARO 2003 Audit Notes in Hindi - कंपनी अंकेक्षक प्रतिवेदन आदेश - 2003

कंपनी अंकेक्षक प्रतिवेदन आदेश – 2003

 

गूगल डॉक्स पर पढने के लिए कृपया यहाँ क्लिक करें

Membership of Company - A Handbook

Membership of Company - A HandBook CA4ALL

Download from Google Drive -

Click Here

Or, enter in address bar:

 https://docs.google.com/open?id=0B4t5fcrTlPOCWkJJa2hQOWFCMW8

Slideshare Link -
Click Here
Or, enter in address bar:

http://www.slideshare.net/CA4ALL/membership-of-companya-handbook

RTP : IPCC November 2012–Download Links

Group 1

Paper 1 – Accounting

Paper 2 – Business Laws, Ethics and Communication

Paper 3 – Cost Accounting & Financial Management

Paper 4 – Taxation

Group 2

Paper 5 – Advanced Accounting

Paper 6 – Auditing and Assurance

Paper 7 – Information Technology and Strategic Management

Definition Of Member as per Companies Act,1956

Definition of member — Section 41 Companies Act,1956

All the subscribers of the Memorandum of Association shall be deemed to have agreed to become members of the company and on registration of a company shall be entered as members in the Register of members

Section 41 deals with definition of member which provide as under:—

• The subscribers of the Memorandum of a company shall be deemed to have agreed to become members of the company, and on its registration, shall be entered as members in its register of members
  
• Every other person who agrees in writing to become a member of a company and whose name is entered in its register of members, shall be a member of the company
  
• Every person holding equity share capital of a company and whose name is entered as beneficial owner in the records of the depository shall be deemed to be a member of the concerned company

Pass Percentage of IPCC & CPC Examinations held in May 2012

DIRECT ENTRY TO CHARTERED ACCOUNTANCY COURSE – AMENDMENTS TO THE CHARTERED ACCOUNTANTS REGULATIONS, 1988

Notification No. 1-CA(7)/145/2012 

on August 1, 2012,

The provisions relating to Direct Entry Scheme for Graduates/Post Graduates, etc., with prescribed percentage of marks, to the Chartered Accountancy Course have come into force from August 1, 2012.

Download Full Notification/Announcement   

Total Quality Management (TQM)

Total Quality Management (TQM) is a people focused management system that aims at continual increase in customer satisfaction at continually lower real cost.

TQM is total system approach, not a separate area or program. TQM stresses continual change in learning and adaptation as keys to organizational success.

Pioneers in field of TQM argued that a more effective management philosophy might focus on actions to prevent a defective products from ever being created, rather that simply screening it out.

W. Edwards Deming is regarded by many as Father of TQM

TQM & Traditional management practices -

• Strategic planning and management
• Changing relationships with customers and suppliers
• Organizational Structure
• Motivation & Job design
• Organizational Change
• Teamwork