Malaysia Syllabus 2016

EXAM SCHEME &
READING LISTS
MALAYSIA VARIANT
PROFESSIONAL 2 SYLLABUS
2016
Page
Numbers
1. Notes and requirements in respect of the exams 3-5
Entry to Exams and Exemptions 3

Constitutional and Ethical Compliance Requirements 3
Progression 3-4
New Legislation 4
Appeals Procedure 4-5
2. Exam Structure 6-7
Educational Objectives of the AIA Programme 6-7

Foundation 6
Professional 1 6-7
Professional 2 6
3. Recognised Professional Qualification (RPQ) 8
4. Inter-relationship of subjects 9
5. Syllabuses and Reading Lists 10-47
AIA Achieve 10
Foundation
6. Paper 5 Auditing and Taxation 17-24
Professional 1
7. Paper 8 Company Law 25-34
Professional 2
8. Paper 15 Islamic Accounting, Auditing and Banking Practice 35-41
9. Paper 16 Taxation & Tax Planning 42-47

1.0 NOTES AND REQUIREMENTS IN RESPECT OF THE
EXAMS
1.1 ENTRY TO THE EXAMS AND EXEMPTIONS

The exams are held twice a year in May and November over four days: Monday, Tuesday,
Wednesday, and Thursday. There is one main exam session on each day lasting three hours, with an
additional 15 minute reading allowance. The exams are held concurrently around the world and the
local start time for each venue is listed in the timetable on the AIA website.
Entry forms are sent to all registered students at least 3 months prior to the exam dates. Students also
have the option of entering the exams via the AIA website. Exam entries must be submitted by 1 April
for the May exams, and by 1 October for the November exams.
Exam entries from students whose accounts are in arrears will not be accepted. An exam candidate
must be a registered student.
Whole or part exemption may be granted in respect of alternative qualifications attained up to 10 years
prior to student registration, from the Foundation and Professional 1 level exams. No exemptions are
allowed from the Professional 2 level exams.
1.2 CONSTITUTIONAL AND ETHICAL COMPLIANCE

REQUIREMENTS
All students are required to comply with the Associations Articles, Byelaws, Regulations, and Code of
Conduct and Professional Ethics.
The AIA Code of Ethics fully complies with The Code of Ethics for Professional Accountants issued by
the International Ethics Standards Board for Accountants (IESBA Code) and the Association attaches
great importance to the implementation and enforcement of the Code and observance of its
internationally recognised ethical principles in all professional relationships.
AIA provides open access to its Code of Ethics via its website www.aiaworldwide.com and expects
students and members to fully comply with the standards stated therein. A declaration to this effect is
a part of all AIA application forms and a reminder of the significance of this topic as a fundamental
aspect of professional training and professional conduct is emphasised further within AIA promotional
literature and student and member guidelines.
In addition to the promotion of overall ethical compliance, AIA specifically examines a candidates
understanding and application of professional ethics at each of the three levels of its syllabus.
Candidates are reminded that even when professional ethics is not specified as an independent topic
within a paper, AIA insists upon the recognition of, and adherence to, the standards outlined in the
Code and as such the Code is implicit in and examinable throughout the syllabus. Candidates should
expect to see a question relating to professional ethics in any of the exam papers, and be able to
recognise ethical issues within the question scenario and provide in their answer, the appropriate
responses to this.
Association of International Accountants 2016 3

1.3 PROGRESSION
From registering as a student, all exam papers within Modules A - F must be completed within a 10
year period. (Note progression for the RPQ students 3.0).
1.3.1 FOUNDATION AND PROFESSIONAL 1 LEVELS

In the Foundation and Professional 1 Levels, all subjects in a module must be taken together at the
first attempt. Candidates must actually attend all subjects at the first attempt. Being absent for one or
more of the subjects will mean a candidate must take all of the subjects again. Individual passes in the
Foundation exams will be credited but all three subjects in Module A must be passed before
proceeding to Module B. Individual passes in the Professional Level 1 exams will be credited but all
three subjects in Module C must be passed before proceeding to Module D.
1.3.2 PROFESSIONAL 2 LEVEL

When entering the Professional Level 2 exams, students must enter at least any two papers from the
final four exam papers: Paper 13 Financial Accounting 3, Paper 14 Financial Management, Paper
15 Professional Practice and Paper 16 Taxation & Tax Planning (including variant papers).
Students can take more than two papers, up to a total of four papers. Any passes awarded will be
retained. At the next consecutive exam students will be required to take at least any two exam papers
which can include any previous failed paper(s). If only one exam paper remains outstanding the
student will be required to take that paper at each subsequent exam session until a pass is achieved.
1.4 NEW LEGISLATION

The Association will not set questions requiring detailed knowledge of new legislation until at least six
calendar months after the last day of the month which the legislation received Royal Assent. However,
candidates should be prepared to answer questions requiring knowledge of the principle aspects of
that legislation at exams held within that period. Similar arrangements apply to accounting and
auditing standards, guidelines, and recommendations.
1.5 APPEALS PROCEDURE

The AIA as part of the Quality Assurance procedures, places a high emphasis on ensuring the exam
scripts are marked to the highest standard; that each question is marked and the total marks awarded
are recorded on the front cover of each exam script for review. Any scripts showing a marginal fail are
automatically reviewed by the Examiner as part of the marking process and re-marked by a second
marker as part of the Quality Assurance Procedures.
1.6 MAKING AN INITIAL ENQUIRY

If you have received your exam result(s) and a fail has been awarded which you would like to query,
AIA is pleased to provide information on the Quality Assurance Procedures conducted in the marking
of your exam script(s) and to undertake an administrative check of the marks. You can e-mail the
Senior Examinations Executive on: exams@aiaworldwide.com for details.
If subsequently, you wish to proceed to making an appeal, then follow the instructions below.
4 Association of International Accountants 2016

1.7 INSTRUCTIONS ON MAKING AN APPEAL
It is appreciated that some students may wish to appeal against the marks awarded when a fail is
recorded, therefore students should submit a letter of appeal in line with the following procedure:
The letter of appeal should outline why the appeal is felt to be appropriate. The letter should be
received at Head Office within six weeks of the date the exam results were released. The letter
must state which paper the appeal is for and on what grounds it is felt to be appropriate. Appeals
received after this period cannot be accepted. In receiving the letter of appeal the Exam
department will note the date the letter is received at Head Office, not the date it is posted.
A fee of 50 must be paid with the letter of appeal. The fee can be paid as a sterling draft or by
credit card. An appeal cannot be accepted unless the fee is paid.
If you wish to appeal against the fail mark awarded for more than one exam paper, then the appeal fee
is per paper. This means for example, if you wish to have your exam scripts re-marked for Paper 15
Professional Practice and Paper 16 Taxation and Tax Planning, then the appeal fee is 100.
1.8 HOW THE AIA DEALS WITH YOUR APPEAL

Upon receipt of your appeal the exams team will confirm by letter (as an e-mail or by post) that your
appeal has been received.
The Senior Examinations Executive then undertakes an administrative check of the exam script prior
to submitting the script for re-marking by an independent marker. You will be notified of the outcome of
your appeal by letter within four weeks from the receipt of the appeal letter and fee.
The outcome of an appeal may be a confirmation of the original decision or an overturning of this
decision which may, in turn, lead to the awarding of a pass grade. You will be advised if the re-marked
exam script(s) are awarded a pass or a fail, with feedback on your performance. Appellants do not
have the right to view the exam script. If you are awarded a pass then the appeal fee will be refunded.
If you are dissatisfied with the appeal process then as the appellant you can request an independent
review. This request must be received by the exams section within two weeks of the date on your
appeal results letter.
Upon receipt of your letter confirming that you are dissatisfied with the appeal process, the script is
sent to an independent reviewer (not an AIA examiner, moderator or employee) for review to ensure
that the appeal process has been conducted appropriately. The independent review is not concerned
with making judgements about candidates work in the exam; it is directly concerned with ensuring the
appeal process has been conducted appropriately. As the appellant you will be notified of outcome of
this review within two weeks of the request being received. If the independent reviewer judges that
AIA has not complied with the appeal procedure, then the appeal fee will be refunded. Consideration
of an appeal by the independent reviewer concludes the AIAs appeal procedure.

2.0 EXAM STRUCTURE
2.1 EDUCATIONAL OBJECTIVES OF THE AIA

PROGRAMME
In accordance with the requirements of the Companies Act 2006 Schedule 11 the standard of the
exams is at least equivalent of that of a university degree and in line with the prescribed subjects
defined in The Statutory Auditors (Examinations) Instrument 2008.
The Professional 2 level and the Multi-Disciplinary Case Study are of masters degree level equivalent
to a degree from a university or similar establishment in the UK. The case study examines knowledge
previously assimilated in the 16 exam papers within the Foundation, Professional 1 and 2 levels and
the ability to apply such knowledge in practice. The case study also examines the prescribed subjects
in The Statutory Auditors (Examinations) Instrument 2008.
The standard and relevance of the exams is maintained through annual internal review and on-going
external academic moderation. The 16 exams at the Foundation, Professional 1 and 2 levels are
arranged in two modules at each stage and presented as three hour closed book exams with an
additional 15 minute reading period. The Multi-Disciplinary Case Study includes pre-seen material and
a four hour closed book exam.
At the Foundation Level there are six papers covering eight core topics which provide essential
underpinning for the study of accounting within an organisational context. The requirement of this level
is to ensure that candidates have a practical understanding of the techniques, principles, and
knowledge which will form the basis for further study of accounting. Success at this level also
demonstrates an ability of candidates to apply their knowledge in the workplace in controlled,
supervised and routine situations.
Achievement at this level reflects the ability to identify and use relevant understanding, methods and
skills to address broadly-defined, complex problems. It includes taking responsibility for planning and
developing courses of action as well as exercising autonomy and judgement within broad parameters.
It also reflects an understanding of different perspectives, approaches or schools of thought and the
reasoning behind those.
The Professional Level 1 stage is characterised by developing the range and depth of professional
accounting studies. Significant technical development of professional knowledge and skills are
acquired at this stage; but this is now set within an increasingly analytical and critical framework, and a
less certain environment; as evidenced by an increasing trend for exam questions to be case
study/scenario based. Professional Level 1 tests and examines the technical skills promoting a
platform for further development at Professional 2.
Achievement at this level reflects the ability to refine and use relevant understanding, methods and
skills to address broadly-defined, complex problems that have limited definition. It includes taking
responsibility for planning and developing courses of action that are able to underpin substantial
change or development, as well as exercising autonomy and judgement. It also reflects an
understanding of different perspectives, approaches or schools of thought and the theories that
underpin them.

Professional ability is the key to Professional Level 2. Current professional issues and an ability to
deal with professionally complex and demanding situations are developed. This is set within a
framework testing application and evaluative skills in an uncertain environment.
Achievement at this level reflects the ability to refine and use relevant understanding, methodologies
and approaches to address problematic situations, complex problems that involve many interacting
factors. It includes taking responsibility for planning and developing courses of action that initiate or
underpin substantial change or development, as well exercising autonomy and judgement. It also
reflects an understanding of relevant theoretical and methodological perspectives and how they affect
their area of study or work.

3.0 RECOGNISED PROFESSIONAL QUALIFICATION
(RPQ) STATUTORY AUDITOR ROUTE
For the Recognised Professional Qualification RPQ (Statutory Auditor Qualification) students must
advise the Association if they are interested in this route by completing the appropriate section on the
student registration form or subsequently, while completing the Foundation level exams notifying
Membership Services.
Exemptions are restricted to comply with the Companies Act 2006, Schedule 11. At the Foundation
and Professional 1 levels (with the exception of Paper 7 Auditing) will be considered for appropriate
qualifications attained within the five years preceding student registration. No exemptions are allowed
at the Professional 2 level. The Multi-Disciplinary Case Study or Oral Test.Students having completed
the Foundation level, have a further five years within which to complete the exams. Students
interested in the RPQ qualification (Statutory Auditor route) can obtain more information in the Guide
to becoming a Statutory Auditor published on the website.
FOUNDATION LEVEL
Module A Module B
1 Financial Accounting 1 4 Law
2 Business Economics 5 Auditing and Taxation
3 Management Accounting 1 6 Information Processing
PROFESSIONAL LEVEL 1
Module C Module D
7 Auditing 10 Business Management
8 Company Law 11 Financial Accounting 2
9 Management Information 12 Management Accounting 2
PROFESSIONAL LEVEL 2
Module E Module F
13 Financial Accounting 3 15 Professional Practice (Auditing)
14 Financial Management 16 Taxation and Tax Planning

4.0 INTER-RELATIONSHIPS OF SUBJECTS
4.1 SUBJECT THEMES DEVELOPED WITHIN THE AIA

PROGRAMME
There are several core areas of subject expertise systematically developed within the Associations
curriculum. The intended outcome of these various core areas is the development of a professional
accountant with an appropriate range of technical, intellectual, personal and business skills, an ability
to apply these skills in a business/enterprise context and an awareness of the need to maintain and
exemplify professional and ethical standards.
Professional accounting practice is the major theme. This is developed through the study of financial
accounting and auditing in all three levels, and the study of taxation in the first and final level. The
study of law, essential for professional practice, is also included within this major theme and is
examined at two stages.
A professional accountants contribution to business operations is developed through the study of

management accounting and financial management. These subjects are successively studied in the
three levels of the Associations exams. This strand of the qualification curriculum is supported by the
study of business economics, business management and quantitative methods.
An ability to recognise and apply the potential of communication and information technologies makes
an essential contribution to the work of the professional accountant, whether in professional practice
or in a business accounting function. This subject is introduced and developed at two levels within the
curriculum.
The linking together of the various subjects is shown below in diagrammatic form.
Inter-relationship of subjects
1 2 3 6 4 5
Financial Business Management Information Law Auditing &

Accounting 1 Economics Accounting 1 Processing Taxation
11 10 12 9 8 7
Financial Business Management Management Company Auditing

Accounting 2 Management Accounting Information Law
2
13 14 15 16
Taxation &
Financial Financial Professional Tax Planning
Accounting 3 Management Practice
(Auditing)

5.0 SYLLABUS & READING LISTS
5.1 SYLLABUSES
The syllabuses set out on the following pages are as detailed as is practical but may include matters
reasonably construed as implied or incidental.
Candidates are reminded that questions in any paper in Professional 1 or Professional 2 may assume
knowledge of the subject matter of other papers in that or earlier parts of the syllabus. This means
knowledge requirements from each level, including where relevant from different subject-based
papers, are automatically included at each higher level.
The syllabus content of each subject is reviewed regularly and any changes made will be included in
future editions of this handbook. Care should be taken to ensure that the current edition of the
syllabus is used by regularly viewing the Associations website.
The syllabuses are planned to take account of the attainment of theoretical knowledge and thereafter
to progressively test the application of this knowledge in practical situations.
5.2 READING LISTS

The reading lists are indicative, those marked Recommended being considered to represent the
minimum reading necessary. In all cases the latest editions should be used. No undertaking is given
that all topics are adequately covered by the textbooks listed. For this reason candidates should read
widely and keep abreast of changes in law and practice, modern thinking, developments, etc by
reading the publications of the Association and others relating to the accountancy profession, industry
and commerce. Candidates must use the latest editions of the textbooks listed, ensuring that these
deal with current law and practice.
AIA e-Books published by BPP learning Media, for the 16 exam papers (excluding variants) offered in
the Foundation, Professional 1 and 2 levels are available to registered students at:
development@aiaworldwide.com The e-books are available for a nominal fee.
For information on purchasing a hard copy of the AIA study texts contact:
membership@aiaworldwide.com
5.3 AIA ACHIEVE

AIA provides a distance learning course of study AIA Achieve, which offers students the tools,
resources and learning environment to study for the exams. The study tools include a course of study
e-book, personal study planner, marked practice questions, marked mock exam paper and feedback
and technical advice via an e-Tutor. Contact the Study Support Team at: achieve@aiaworldwide.com

5.4 EXAMINABLE STANDARDS
All extant International Standards on Auditing, International Standards on Quality Control, International
Financial Reporting Standards /International Accounting Standards are examinable, subject to the six
months rule (refer to New Legislation).
The depth of knowledge of the standards required for the different levels can be defined as:
Foundation - Students should be aware of the standard and be familiar with the basic concepts
involved.
Professional 1 - Students should be aware of all major requirements of the standard and be able
to apply it to straight forward situations. Students should be able to recognise some of the pitfalls
and issues associated with the standard.
Professional 2 Students must be fully cognisant of the standard and know how to apply it to
specialized situations. They must also be fully aware of the important issues, contemporary
thinking and criticisms related to the standard.
For RPQ (statutory auditor qualification) students (refer to page 5) the relevant UK standards are
Financial Reporting Standards (FRS) and Statement of Standard Accounting Practice (SSAP) issued
by the FRC. In respect of auditing, the relevant UK standards are all current Auditing Standards (ISAs
(UK and Ireland)) issued by the FRC.
5.5 INTERNATIONAL ACCOUNTING STANDARDS (IASS)

AND INTERNATIONAL FINANCIAL REPORTING
STANDARDS (IFRSS)
In Paper 1 Financial Accounting 1 candidates are required to have studied a limited number of IASs
and IFRSs, however in Paper 11 Financial Accounting 2 the bulk of IASs and IFRSs are examinable.
There are still some exclusions and these will be covered in Paper 13 Financial Accounting 3. Those
studied for in Paper 1 are noted, as are those which are examinable in papers 5, 7, 11, 13 and 15.
Note: Paper 15 refers to Paper 15 Professional Practice.
A list of currently examinable IASs and IFRSs is given below.
International Accountings Standards (IASs) Examinable in Paper
No Title 1 3 5 7 11 13 15
1 Presentation of Financial Statements
2 Inventories
7 Statements of Cash Flows
8 Accounting Policies, Changes in Accounting Estimates and

Errors
10 Events After the Reporting Period
12 Income Taxes
16 Property, Plant and Equipment
17 Leases

19 Employee Benefits
20 Accounting for Governments Grants and Disclosure of

Government Assistance
21 The Effects of Changes in Foreign Exchange Rates
23 Borrowing Costs
24 Related Party Disclosures
27 Separate Financial Statements
28 Investment in Associates and Joint Ventures
29 Financial Reporting in Hyperinflationary Economies
32 Financial Instruments: Presentation
33 Earnings per Share
34 Interim Financial Reporting
36 Impairment of Assets
37 Provisions, Contingent Liabilities and Contingent Assets
38 Intangible Assets
40 Investment Property
Note: Free website providing comprehensive information about IFRS: www.iasplus.com
International Financial Reporting Standards (IFRS) Examinable in Paper

No
Title 1 5 7 11 13 15
1
First time Adoption of International Financial Reporting
Standards
2
Share-based Payment
3
Business Combinations
5
Non-current Assets Held for Sale and Discontinued
Operations
7
Financial Instruments: Disclosures
8
Operating Segments
9
Financial Instruments

10
Consolidated Financial Statements
11
Joint Arrangements
12
Disclosure of Interests in Other Entities
13
Fair Value Measurement
15
Revenue from Contracts with Customers
IFRS
IFRS for Small and Medium-sized Entities
for
SMEs
Exposure drafts, discussion papers and IFRICs are not examinable at Paper 1 and Paper 11. Those
still current (i.e. they have not been superceded by other publications) are examinable in Paper 13 but
only an understanding of their basic principles is required.
Other useful reading includes:
The IFRS as global standards: a pocket guide 2015
ISBN: 978909704749
WEB Shop: http://www.ifrs.org/Use-around-the-world/Documents/IFRS-as-global-standards-Pocket-

Guide-April-2015.PDF
This Pocket Guide provides an overview of the adoption of IFRS in 130 countries and other
jurisdictions around the world.

5.6 INTERNATIONAL STANDARDS ON AUDITING (ISAS)
AND INTERNATIONAL STANDARDS ON QUALITY
CONTROL (ISQCS)
A list of currently examinable ISAs and ISQCs is stated in the table. Note for Paper 5 Auditing &
Taxation, the standard refers to Auditing Section A. Candidates can download the Handbook of
International Auditing, and Ethics Pronouncements, which is available free of charge as a PDF file
from the IFAC website: www.ifac.org, then click on standard setting bodies, then IAASB. Students
following the RPQ route should refer to the UK FRC site:
http://www.frc.org.uk/Our-Work/Codes-Standards/Audit-and-assurance/Standards-and-guidance.aspx
International Standards on Auditing (ISAs) Examinable in

Paper
No
Title 5 7 15
AUDITS OF HISTORICAL FINANCIAL INFORMATION

200-299 GENERAL PRINCIPLES AND RESPONSIBILITIES
200
Overall Objectives of the Independent Auditor and the Conduct of an
Audit in Accordance with International Standards on Auditing
210
Agreeing the Terms of Audit Engagements
220
Quality Control for an Audit of Financial Statements
230
Audit Documentation
240
The Auditor's Responsibilities Relating to Fraud in an Audit of
Financial Statements
250
Consideration of Laws and Regulations in an Audit of Financial
Statements
Candidates following the RPQ route should refer to 250A
Consideration of laws and regulations in an audit of financial
statements and 250B The auditors right and duty to report to
regulators in the financial sector.
260
Communication with Those Charged with Governance
265
Communicating Deficiencies in Internal Control to Those Charged with
Governance and Management

Examinable
Papers
5 7 15
300-499 RISK ASSESSMENT AND RESPONSE TO ASSESSED RISKS

300
Planning an Audit of Financial Statements
315
Identifying and Assessing the Risks of Material Misstatement through
Understanding the Entity and Its Environment
320
Materiality in Planning and Performing an Audit
330
The Auditors Responses to Assessed Risks
402
Audit Considerations Relating to an Entity Using a Service
Organization
450
Evaluation of Misstatements Identified during the Audit
500-599 AUDIT EVIDENCE
500 Audit Evidence
501 Audit EvidenceSpecific Considerations for Selected Items
505 External Confirmations
510 Initial Audit EngagementsOpening Balances
520 Analytical Procedures
530 Audit Sampling
540 Auditing Accounting Estimates, Including Fair Value Accounting

Estimates, and Related Disclosures
550 Related Parties
560 Subsequent Events
570 Going Concern
580 Written Representations
600-699 USING WORK OF OTHERS
600 Special ConsiderationsAudits of Group Financial Statements

(Including the Work of Component Auditors)
610 Using the Work of Internal Auditors

620 Using the Work of an Auditors Expert
700-799 AUDIT CONCLUSIONS AND REPORTING
700 Forming an Opinion and Reporting on Financial Statements
701 Communicating Key Audit Matters in the Independent Auditors Report
Candidates following the RPQ audit route should refer to ISA 700 The
independent auditors report on financial statements, issued by the
FRC.
705 Modifications to the Opinion in the Independent Auditors Report
706 Emphasis of Matter Paragraphs and Other Matter Paragraphs in the

Independent Auditors Report
710 Comparative InformationCorresponding Figures and Comparative

Financial Statements
720 The Auditors Responsibilities Relating to Other Information in

Documents Containing Audited Financial Statements
Candidates following the RPQ route should refer to 720A The auditors
responsibilities relating to other information in documents containing
audited financial statements and 720B The auditors statutory
reporting responsibility in relations to directors reports.
800-899 SPECIALIZED AREAS
800 Special ConsiderationsAudits of Financial Statements Prepared in

Accordance with Special Purpose Frameworks
805 Special ConsiderationsAudits of Single Financial Statements and

Specific Elements, Accounts or Items of a Financial Statement
810 Engagements to Report on Summary Financial Statements
INTERNATIONAL STANDARDS ON QUALITY CONTROL (ISQCs) Examinable in

Paper
NO Title 5 7 15
1 Quality Controls for Firms that Perform Audits and Reviews of

Financial Statements, and Other Assurance and Related Services
Engagements.

6.0 PAPER 5. AUDITING AND TAXATION MALAYSIA
VARIANT
AIMS
To examine the candidates knowledge and understanding of the basic principles of these two highly
specialised areas of professional practice.
DESCRIPTORS
AUDITING
After successfully completing this section candidates

should be able to:
Fig. 5 Inter-relationship of units
describe the nature and purpose of auditing
describe the qualities, qualifications and

actions to be carried out relating to the
appointment and removal of an auditor 5
Auditing & Taxation
describe the rights, duties and professional (Malaysia)
obligations of an auditor
explain the process of planning an audit and 16

7
the necessity for an appropriate audit Auditing Taxation & Tax
Planning
programme taking into account audit evidence
(Malaysia)
and audit risk
explain the systems approach and the balance

between tests of controls and substantive
testing
describe the audit evidence required in

specified situations
describe the audit work required at the final review and

report stage of an audit
TAXATION
After successfully completing this section candidates should be able to:
express and explain the elementary aspects of Malaysian taxation
demonstrate an understanding of tax principles and concepts
compute tax liability of individuals and corporations
describe the administrative aspects under the Income Tax Act

STRUCTURE OF THE PAPER
A three hour 15 minute paper consisting of two sections, one covering Auditing and the other
Taxation.
SECTION A AUDITING
Candidates are required to answer one compulsory case study type question which carries 20 marks
and two questions, each carrying 15 marks.
SECTION B TAXATION
There are three compulsory questions on the three main syllabus areas of Employment Income,
Business Income and Tax Computation. The allocation of marks is 20, 15 and 15. The question
carrying 20 marks will focus on a comprehensive tax computation format.
Fifty to seventy five per cent of the questions are essay based and twenty five to fifty per cent are
computational.
The total marks awarded to the paper are 100. Where appropriate the allocation of marks to individual
parts of a question is stated.
SYLLABUS
SECTION A AUDITING
5.1 NATURE AND PURPOSE
Topic Weighting 10%
Nature of auditing
Objectives: true and fair view, materiality
Private and statutory audits
Scope of audit
Impact of computers
Standards and guidelines
Advantages and expectations
5.2 THE AUDITOR
Topic Weighting 10%
Qualities and qualifications

Appointment: statutory provisions; professional matters: client screening, engagement letter,
professional clearance
Conduct
Resignation
Dismissal
Rights and duties
Professional ethics: integrity, objectivity and independence, confidentiality

5.3 PLANNING THE AUDIT
Topic Weighting 10%
The risk-based approach

Ascertaining and evaluating internal control
Documenting the system: flow charts; internal control questionnaires
Audit programmes: development of a work programme;
Staff and training issues
5.4 CONDUCTING THE AUDIT
Topic Weighting 10%
Audit testing: tests of controls and substantive testing with particular reference to sales,
purchases, wages and cash
Audit evidence
Verification and valuation of assets and liabilities
Statistical sampling: an appreciation
Audit files and working papers
Quality control
5.5 REPORTING
Topic Weighting 10%
Final review stage: procedures, going concern evaluation, management representations;

subsequent events
Nature and purpose of report
Content: the standard external audit opinion
Modified reports: the form of audit report modified reports; determining and evaluating
circumstances where a qualification is necessary
The following standards are examinable:
International Accounting Standards (IAS) 1, 2, 7, 10, 16, 18, 37 and 38
Note: For RPQ (statutory auditor qualification) students the relevant UK standards are Financial
Reporting Standards (FRS) 1, 3, 5, 10, 12, 15 and 21 and Statement of Standard Accounting Practice
(SSAP) 9, issued by the FRC.
International Standards on Auditing (ISA) All current ISAs except for ISA 402, 510, 540, 550, 600, 701
710, 720, 800 and 810.
International Financial Reporting Standards (IFRS) 15
Note: For RPQ (statutory auditor qualification) students the relevant UK standards are all current
Auditing Standards (ISAs (UK and Ireland) ) except for ISA 402, 510, 540, 550, 600 and 710, issued
by the FRC.

In addition, The Code of Ethics for Professional Accountants issued by the International Ethics
Standards Board for Accountants ( IESBA Code) is also examinable. The AIA adopted IFACs Code of
Ethics and these can be viewed on the AIA website.
Students following the RPQ (statutory auditor qualification) route will be expected to refer, where
appropriate, to the Ethical Standards for Auditors (ESs) published by the FRC. Students following
other routes will not be penalized if they refer to ESs in preference to the IFAC Code of Ethics. ESs
can be accessed via the Financial Reporting Councils website at http://www.frc.org.uk/Our-
Work/CodesStandards.aspx
Candidates should note that the level of knowledge and understanding expected of these
pronouncements will be higher for Paper 7 Auditing than Paper 5 Auditing & Taxation.
SECTION B - TAXATION
The syllabus only covers provisions under the Income Tax Act 1967.
5.6 BASIS OF TAXATION
Topic Weighting 5%
Scope of taxation
Determination of resident status of individuals and companies
Chargeable persons
Classes of income
Basis period (excluding change of accounting period)
5.7 EMPLOYMENT INCOME
Topic Weighting 10%
Defining employment
Derivation of employment income
Types of employment income (including relevant Public Rulings)
Basis periods
Deductions
Exemptions
Computation of chargeable income (including relevant reliefs and rebates)
5.8 BUSINESS INCOME
Topic Weighting 10%
Business & Badges of Trade

Commencement of business activity
Gross income from business
Basis periods
Deductibility principles and tests
Partnership computation
Compute adjusted income

5.9 NON BUSINESS INCOME (OTHER THAN EMPLOYMENT)
Topic Weighting 5%
Taxation of dividends, interests, rent, royalties, pensions, annuities and periodical payments and
other gains of a revenue nature
Exemptions applicable to the above mentioned types of income
Compute statutory income
5.10 CAPITAL ALLOWANCES
Topic Weighting 5%
Computation of capital allowance of plant, machinery and industrial buildings

Qualifying Plant and Building Expenditure
Initial, annual and notional allowances
Disposals (excluding control transfers)
5.11 TAX COMPUTATION
Topic Weighting 10%
Determination of:
Statutory income
Aggregate income
Total income
Chargeable income
Tax payable and refunds (excluding unilateral or bilateral reliefs)
Separate and joint assessments
5.12 TAX COMPLIANCE & ADMINISTRATION
Topic Weighting 5%
Returns
Assessments
Appeals
Payment and recovery of tax
Offences and penalties
RELATIONSHIP TO OVERALL SYLLABUS
This syllabus provides the foundations of auditing and taxation which will be developed in further
studies in Paper 7 Auditing, Paper 15 Professional Practice (Auditing) and Paper 16 Taxation and Tax
Planning (Malaysia variant).

ETHICS
Students are advised that the standards outlined in the IFAC Code of Ethics for Accountants issued by
the IESBA are implicit in, and examinable throughout, the AIA syllabus. The Code can be accessed
via the AIA website at www.aiaworldwide.com
appropriate, to the Ethical Standards for Auditors (ESs) published by the Auditing Practices Board.
Students following other routes will not be penalized if they refer to ESs in preference to the IFAC
Code of Ethics. ESs can be accessed via the Financial Reporting Councils website at
http://www.frc.org.uk/Our-Work/CodesStandards.aspx
RECOMMENDED READING AUDITING

AIA Journal International Accountant
ISSN: 1465 - 5144
AIA Text Book
Paper 5 Auditing & Taxation
Publisher: BPP Learning Media
ISBN: 9781445389066
This text is relevant for the auditing section. In respect of Malaysia tax refer to the texts stated below.
The e-Book is available at: development@aiaworldwide.com
For information on purchasing a hard copy of the text book contact: membership@aiaworldwide.com
You can purchase any of the books listed quickly and easily through the publishers website or link
stated below.
th
The Audit Process: Principles Practice and Cases (5 Edition)
Author: Gray, I and Manson, S
Publisher: Cengage Learning EMEA
ISBN: 9781408030493
Website: http://www.cengagebrain.co.uk/shop/search/9781408030493

Principles of External Auditing (4th Revised Edition)
Author: Porter, B; Simon, J; Hatherley, D
Publisher: John Wiley and Sons Ltd
ISBN: 9780470974452
Website: http://eu.wiley.com/WileyCDA/WileyTitle/productCd-EHEP003188.html
Standards and Bulletins issued by the FRC
Website: http://www.frc.org.uk/Our-Work/CodesStandards.aspx
Free website providing comprehensive information about IFRS
Website: www.iasplus.com
RECOMMENDED READING - TAXATION

Malaysian Taxation
Author: Alan Yeo Miow Cheng
Publisher: PAAC
ISBN: 9289274486
Website: www.paac.edu.my
Veerinder on Tax Theory and Practice (2012 Edition)
Author: Veerinderjeet Singh
Publisher: CCH
ISBN: 9789814359467
Website: www.cch.com.my
th
Malaysian Taxation Principles & Practice (21 Edition) 2015
Author: Choong Kwai Fatt
Publisher: Info World

Web Site: www.kwaifatt.com
ISBN: 978983952645
Journals
The Chartered Tax Institute of Malaysia, Tax Guardian (quarterly)
The Malaysian Insititute of Accountants, Accountants Today (monthly)
Inland Revenue Website: http://www.hasil.gov.my

7.0 PAPER 8. COMPANY LAW - MALAYSIA VARIANT
AIMS
The main aim of Company Law (Malaysia) is to examine the candidates knowledge and
understanding of the principles of Company Law and their application in Malaysia based on the
available sources and authorities of Malaysian law such as the relevant local statutes and case law.
The objective of the paper is to determine that students have:
Comprehensive knowledge and understanding of the principles of Malaysian Company Law

The ability to emulate the principles of Company Law in its practical sense; and
The capability to apply relevant principles and
procedure based on statutory provisions and
Fig. 8 Inter-relationship of units
judicial decisions of Company Law to practical
scenarios
The syllabus covers key areas of Company Law

which are: 4
Law
Introduction to Company Law in Malaysia
Incorporation
The Capital Structures
Management and Administration (control) 8
Accounts and Audit Company Law
Reconstruction and Arrangement (Malaysia)
Dissolution and Winding Up
DESCRIPTORS
After successfully completing this paper candidates should be able to:
Discuss and apply the principles of company law comprehensively and clearly, based on a sound
knowledge and understanding of basic legal principles of Malaysian company law and practice
Analyse practical scenarios and apply relevant legal principles and procedures
Demonstrate reasoned conclusions following the application of legal rules and procedures and
critical in underlying arguments where necessary
A three-hour 15 minute paper consisting of eight questions, any five of which are to be attempted
All questions carry equal marks
Where appropriate the allocation of marks to individual parts of a question is stated
Generally, the paper includes at least two essay type questions, the remaining questions being
case studies

Candidates are expected to support answers with references to statute and case law, where
appropriate. Candidates are also expected to be able to apply relevant authorities and provide a clear
explanation of appropriateness.
SYLLABUS
Candidates are expected to be familiar with the existing Companies Act 1965 being enforced and how
the statutory provisions are to be applied. Candidates must also be able to understand the importance
of other legal authorities such as judicial precedents (based on case law, priority to cases decided in
Malaysia) and the statutes (Acts of Parliament of Malaysia) in relation to Company law. Therefore,
other than the Companies Act 1965 as the main statute of reference, candidates must also recognise
the importance of other statutes, its subsidiary legislation namely the Companies Regulations 1966.
Candidates must also refer to the Companies Commission of Malaysia Act 2001 that establishes the
statutory body Companies Commission of Malaysia that regulates the corporate and business affairs
in Malaysia. Other statutes that relate to the public listed companies matters such as the Securities
Industry Act 1983 and Securities Commissions Act 1993 must also be noted. A new yet significant law
recently introduced and implemented is the Limited Liability Partnership Act 2012 and Limited Liability
Partnership Regulations 2012.
8.1 INTRODUCTION TO COMPANY LAW
Topic Weighting 5%
This part of the syllabus covers:
The sources of Company Law in Malaysia. This includes both written and unwritten laws. An
example of written law is the statutes and in Malaysia is known as Acts of Parliament. On the
other hand, case law is an example of unwritten law. Companies Act 1965 (Act 125) is an
example of an Act of Parliament and shall be the basic reference for this paper. Candidates are
also expected to understand the Companies Regulation 1966 the provisions therein complement
the general provisions in the Companies Act 1965. From time to time, there will be reference to
the English common law due to the Malaysian legal history which must be fully understood by the
candidates and the extent of its applicability in Malaysian cases and scenario. Candidates are
advised to also note when the English law is not applied or where the differences are highlighted.
The comparison between four business entities: company, sole-proprietorship and partnership
and most recently introduced, the Limited Liability Partnership (LLP).
The different types and classification of companies:
- private and public companies
- limited and unlimited companies
- companies limited by shares compared to companies limited by guarantee
- related companies that covers the relationship between holdings and subsidiary companies

- foreign companies (if they are to run their business in Malaysia)
In this context, it is necessary to know the characteristics of each company. Since these
companies are different, comparisons and distinctions between these business entities
are generally focused on their advantages and disadvantages.
8.2 INCORPORATION
REGISTRATION AND FORMATION OF COMPANIES
Topic Weighting 10%
Under this topic, candidates are expected to be able to understand the basic procedure to incorporate
and register a company.
Therefore, the candidates are expected to have sound knowledge of:
The basic procedures and key documents relating to the formation and registration of a company
(cross reference are to be made to the Companies Regulations 1966 in relation to the relevant
forms to be applied) and reference to the Companies Commission Act 2001
Relevant issues pertaining incorporation such as choice of companies names, reservation of

name, share qualification and others. Candidates are also required to understand the reasons or
rationale for those issues raised
The functions, roles and liability of corporate promoters
The meaning and effect of pre-incorporation contract based on Section 35 of the Companies Act
1965. Candidates must be aware that the position of pre-incorporation under the English common
law is in total contrast compared to the position in Malaysia
The effects of the ultra vires doctrine. Similarly, candidates must be able to grasp the difference
of the concept of ultra vires in Malaysia compared to the position under the English common law
The legal effects of incorporation based on Section 16(5) of the Companies Act 1965, and its
relationship with the doctrine of separate legal personality from the case Salomon v A
Salomon Co Ltd. [1897] AC 22. Candidates must also be able to understand the exceptions to the
doctrine (also known as lifting of the corporate veil). Understanding the rules as illustrated in the
cases as well as in the statutory provisions is crucial.
MEMORANDUM AND ARTICLES OF ASSOCIATION
Topic Weighting 10%
The significance of a companys Articles and Memorandum of Association
Registration of companys Articles and Memorandum of Association
Adoption of Table A of the Fourth Schedule as provided by Section 30

The effects of Memorandum and Articles of Association based on Section 33(1) of the
Companies Act 1965
The rules relating to the alteration of Memorandum and Articles (the basic principles, limitation
and effects)
8.3 CAPITAL STRUCTURE
This part of the syllabus covers:
GENERAL CONCEPT OF COMPANY FINANCE, SHARE CAPITAL AND LOAN CAPITAL
Topic Weighting 15%
It is important for candidates to have knowledge of company finance that relates to:
the nature and sources of funding provided by investors (usually the shareholders) and creditors
(usually the debenture holders) of the company
In this regards, candidates are expected to understand what is meant by nominal capital, issued
capital, authorized capital, unpaid capital and paid-up capital is necessary
In respect of share capital, it is important that candidates know:
the nature of share capital and its relationship to the definition and nature of shares, different
classes of shares (in particular ordinary shares and preference shares), issuance and allotment of
shares (and its relationship to membership in companies)
Issues on ownership of shares, either by way of transfer or transmission of shares and the
relevant documents related to effect of the transfer or transmission of shares
The rules on maintenance of capital (as governed under Section 67(1) of the Companies Act
1965) and the exceptions to the rules as well as the ruling under Section 67A enabling share buy-
back in Malaysia
The meaning of reduction of share capital (in contrast to shares issued at a discount and
acquiring companys own shares)
The procedure in the payment of dividend to the shareholders, and the meaning of share
certificate estoppel
It is equally important for candidates to understand in respect of loan/debt capital, it covers:
The power of a company to borrow
Nature of debentures and rights of debenture holders
Charges- fixed and floating charge, meaning and definition
Registration of charges and effect of registration under Section 108
Crystallization of charges (and its relation to the appointment of receivers and/or liquidators; and
the companys state under receivership) and

Priority of charges
PUBLIC ISSUANCE OF SHARES AND THE SECURITIES INDUSTRY
Topic Weighting 10%
Under this topic, it is necessary to understand:
The meaning of prospectus and the liabilities attached thereto
The different types of prospectus and the connection to the commencement of business that
applies to public companies whether they are public listed or not
General understanding of the listing requirements (as governed by Bursa Malaysia and regulated
under Capital Markets & Services Act 2007 (Act 671) (commonly known as CMSA 2007) and
what it means with regard to floatation in the KLSE, (known as Bursa Malaysia) as under the
Securities Commission Act 1993 and CMSA 2007
The meaning and nature of scripless trading and the enforcement of the Securities Industry
(Central Depositories) Act, 1991 that enabled scripless trading to be exercised in Malaysia
General understanding of the prohibited practice of insider trading (also known as insider dealing)
as governed by the CMSA 2007 (Note: these prohibited practices were governed by the
Companies Act 1965; and further changes were made under by virtue of the Companies
(Amendment) Act 2007)
8.4 MANAGEMENT AND ADMINISTRATION (CONTROL)
DIRECTORS AND OTHER OFFICERS OF A COMPANY
Topic Weighting 10%
The appointment, removal, qualification and/or disqualification, powers, duties and responsibilities
of Directors, Company Secretary and Auditor
The position of company Directors including their duties of care and skill and the fiduciary duties
of directors based on both statutory provisions and relevant cases [Note: A number of changes
were made under the Companies (Amendment) Act 2007 affecting the roles, duties and
responsibilities of directors. Candidates are expected to be aware of the changes and to refer to
the latest position under the law being enforced.]
The position of the Auditors their duties, responsibilities and privileges
The position of Company Secretary their duties and responsibilities

MEETINGS AND ENFORCEMENT OF CORPORATE RIGHTS
Topic Weighting 10%
Meetings
The different types of Meeting (Annual and Extra ordinary General Meeting AGM/EGM) and
Statutory Meeting
Convening of and procedure at Meeting (Quorum, Chairman, Minutes of Meeting, Notice of

Meeting)
The different types of resolution (Special and Ordinary resolution) and the significance of each
resolution
Votes show of hands and ballots
Majority control rule and protection of minority shareholder
THE ENFORCEMENT OF CORPORATE RIGHTS
Understanding the rule in Foss v Harbottle (the proper plaintiff rule)
The exceptions to the rule
Application of the rule in Malaysia
Other types of actions that can be enforced by the shareholders/members
8.5 ACCOUNTS AND AUDIT
Topic Weighting 10%
The companys duties to keep accounting records and the nature of those records
The duties of a companys director and auditors to ensure the requirements for the production of
directors and auditors reports are issued
The nature and requirements on the duty to lay financial reports (profits and loss accounts and
balance sheet) before the members in general meeting
Duties in relation to Financial Reporting - Financial records which must be sent to members,
debenture holders and the Registrar of Companies
Requirement for the Financial reports to be audited by auditors see Section 174
Rights of members to Financial reports and findings by the auditors

8.6 RECONSTRUCTION AND ARRANGEMENT OF COMPANIES
Topic Weighting 10%
The different types of arrangement and reconstruction (takeover, merger, amalgamation)
Status of company under receivership compared to dissolution of companies, role and position of
company receiver
The position of the parties affected (directors, shareholders, creditors etc) by the reconstruction or
arrangement of companies
The procedures that must be followed as provided in relevant statutory provisions, for example in
take-over reference to Securities Commission Act 1993, or any other scheme of arrangements
that may include the compulsory acquisition of minoritys shares as in Section 176 of the
Companies Act 1965 [Note: the Securities Commission Act introduced a new Malaysia Code on
Take Over & Mergers 2010, to take effect from December 2010]
The governing bodies related to this topic of reconstruction of companies include Securities
Commission, Registrar of Companies, Foreign Investment Committee, and Ministry of Finance
etc. Thus, knowledge on relevant statutes such as the Securities Commission Act 1993 would be
an advantage
The effects of scheme of arrangement on the creditors, shareholders and members of the
company
8.7 DISSOLUTION AND WINDING UP OF COMPANIES
Topic Weighting 10%
The different types of dissolution (striking off from the register, winding up)
The different types of winding up (compulsory and voluntary winding up, and what it means
between members compared to creditors voluntary winding up)
The basic procedures related to winding up which include the grounds for winding up
The effects of commencement of winding up on the company, creditors, shareholders and

employees of the company
The duties and powers of the Liquidator and the order of payment of creditors.
The Company Law paper builds on knowledge acquired by candidates having successfully completed
the Law module.

Knowledge of the nature of the Malaysian legal system and of Contract law as well as law of Torts is
an essential basis for candidates studying Company Law. Where necessary, the position of certain
issues under the English common law must be clarified as to the extent of its application in Malaysia
and the difference between the laws in England in the context of Malaysian law must be identified.
The Legal Relationships section of the Law module introduces candidates to different types of
business entity, allowing comparisons to be made between partnerships and companies and
introducing the concept of limited liability. This section also covers the concept of agency, which is
essential in understanding the nature of the role of company directors.
ETHICS
Students are advised that the standards outlined in The Code of Ethics for Professional Accountants
issued by the International Ethics Standards Board for Accountants (IESBA Code) are implicit in, and
examinable throughout, the AIA syllabus. The Code can be accessed via the AIA website at
www.aiaworldwide.com
appropriate, to the Ethical Standards for Auditors (ESs) published by the FRC. Students following
other routes will not be penalized if they refer to ESs in preference to the IFAC Code of Ethics. ESs
can be accessed via the Financial Reporting Councils website at http://www.frc.org.uk/Our-
Work/CodesStandards.aspx
RECOMMENDED READING
You can purchase any of the books listed quickly and easily through the website or the link stated
below.
rd
Commercial Application of Company Law in Malaysia (3 Edition) 2008
Author: Pamela Hanrahan, Ian Ramsay, Geof Stapledon, Aiman Nariman Mohd Sulaiman and
Aishah Bidin
Publisher: CCH Asia Pte. Ltd.
ISBN: 9789814228343
rd rd
Walter Woon on Company Law 3 Edition 2009 (Revised 3 Edition Student)
Author: Woon, W C M, General Editor, Tan Cheng Han
Publisher: Thomson Sweet & Maxwell Asia

ISBN: 9789810825942
Website: www.sweetandmaxwellasia.com.my
Note: This book by Walter Woon, provides a detailed and thorough explanation on company law
principles providing a better understanding for students and practitioners. Students are advised to pay
attention to the law cited therein since it is referring to the law in Singapore with variation to the
Malaysian Companies Act 1965. The differences are highlighted in the footnotes throughout the text.
nd
Company Law in Malaysia (2 Edition) 2014
Author: Chan Wai Meng
Publisher: Cengage Learning Asia
ISBN: 9789814633017
Website: www.cengage.com
nd
Concise Principles of Company Law in Malaysia (2 edition) 2010
Author: Shanty Rachagan, Janine Pascoe, Anil Joshi
Publisher: Lexis Nexis, Malaysia
ISBN: 9789675371684
Website: www.lexisnexis.com.my
Guide to Secretarial Practice in Malaysia (2012)
Author: Cheah Foo Seong
Publisher: CCH Asia Limited
ISBN: 9789814359641
Statutes
Companies Act, 1965 (Act 125)
Companies Regulation, 1966
Companies (Winding Up) Rules, 1972
Companies Commission of Malaysia Act 2001 (Act 614)
Securities Industry Act, 1983 (repealed)
Securities Commission Act, 1993

Capital Markets & Services Act 2007 (Act 671)
Malaysian Code on Take Over & Mergers 2010
Amendment to the Companies Act 1965
Candidates are advised to take note of any changes of the law as prescribed under any Amendment
Acts that are issued and passed by the Parliament from time to time.
Companies (Amendment) Act 2007
Recommended links for current updates on the law
Bursa Malaysia website: www.bursamalaysia.com
Securities Commission website: www.sc.com.my
Companies Commission of Malaysia (Suruhanjaya Sekuriti Malaysia SSM) website:

www.ssm.com.my
Links for current updates on the law
1. Bursa Malaysia website: www.bursamalaysia.com
Candidates are recommended to refer to this website for general understanding of public companies
being listed on the stock exchange. Due to the dynamic aspects of financial securities trading globally,
Bursa Malaysia will update the current status and changes in the policy and procedures regularly.
Candidates can email with further queries.
Relevant publication for general understanding of public listing is Going Public A Practical Guide to
Listing on Bursa Malaysia
2. Securities Commission website: www.sc.com.my
3.Companies Commission of Malaysia (Suruhanjaya Sekuriti Malaysia - SSM) website:

www.ssm.com.my
Candidates are advised to refer to this Companies Commission of Malaysia website for quick
reference to:
the Guidelines issued by SSM in relation to Registration of Company (link:
http://www.ssm.com.my/en/guideline-public)
Directors Responsibilities (link:
http://www.ssm.com.my/sites/default/files/booklet/Company_Directors_Responsibilities.pdf)
Code of Ethics for Company Directors (link: http://www.ssm.com.my/en/code_of_ethics)
The newly introduced Limited Liability Partnerships. The following link should provide further
information on the guidelines and relevant important legal aspects of LLP (
link:http://www.ssm.com.my/en/LLP-AboutLLP).

8.0 PAPER 15. ISLAMIC ACCOUNTING, AUDITING &
BANKING PRACTICE
AIMS
The aim of this paper is to ensure that candidates have a thorough understanding of:
Contracts that govern the transactions undertaken by Islamic financial institutions;

Statements and standards for Islamic financial institutions promulgated by the Accounting and
Auditing Organization for Islamic Financial Institutions (AAOIFI)
Key financial management issues relating to
Islamic banks. Fig. 15 Inter-relationship of units
An ability to appropriately apply the above

contracts and standards in practice.
5
The syllabus covers the following aspects relating to Auditing & Taxation
Islamic financial institutions, which are defined to (Malaysia)
include Islamic banks, Islamic insurance companies
(Takaful), and Islamic investment funds:
7
Contracts: Mudaraba, Musharaka, Murabaha, Auditing
Ijara and Ijara Muntahia Bittamleek, Salam and
Parallel Salam Istisnaa, Bai bithaman ajil, and
Wakala
AAOIFIs pronouncements 15 Islamic

Accounting, Auditing
& Banking Practice
Financial accounting statements and
standards that have been developed for
Islamic financial institutions
8
Auditing standards for Islamic financial Company Law
institutions (Malaysia)
Governance standards for Islamic financial
institutions
Codes of ethics for accountants, auditors and
employees of Islamic financial institutions
and key financial management issues relating to Islamic banks, namely capital adequacy ratio,
Islamic banks minimum core and total capital requirement, liquidity management, risk management,
and agency problems.
The above syllabus draws primarily from the pronouncements of AAOIFI which is gradually becoming
the standard-setting body of the Islamic banking and finance industry. This should help candidates to
acquire knowledge that is more relevant for cross-border applications.

DESCRIPTORS
After successfully completing this paper, candidates should have an understanding of:
The definitions and basic characteristics of the contracts that govern the work of Islamic financial
institutions
The accounting, auditing, governance and ethical standards issued by AAOIFI.
The intricacies of some of the key aspects of financial management of Islamic financial
institutions.
A three-hour 15 minute exam paper which requires candidates to answer three questions out of four.
The paper is structured into two sections: Section A consists of two compulsory questions and Section
B consists of three questions of which two questions must be answered.
The exam questions are based on the latest version of AAOIFIs standards of which candidates are
expected to have detailed knowledge.
SECTION A
This section is worth 40% of the overall marks for the paper and comprises a single question that will
be based on a scenario. The question will be divided into two or three sub-sections and may cover
more than one syllabus topic. The compulsory question will be based on key areas relating to IFIs on
issues of contracts (such as mudaraba, musharaka, murabaha, ijara and ijara muntahia bittamleek,
salam istisnaa, bai bithaman ajil, and wakala), AAOIFIs pronouncements (FASs, ASIFIs, GSIFI and
Codes of ethics for accountants, auditors and employees of IFIs) and key financial management
issues (e.g. capital adequacy ratio, liquidity management, risk management, and agency problems)
relating to Islamic banks.
Candidates will normally be asked to evaluate the underlying accounting, audit, governance, ethical,
or management issues, and to formulate an appropriate response. The objective of this section is to
ensure that candidates have a thorough understanding of, and the capabilities to apply, contracts that
govern the transactions undertaken by IFIs, Statements and standards for IFIs promulgated by
(AAOIFI) and key financial management issues relating to Islamic banks, and therefore the emphasis
is very much on the practical aspects of Islamic accounting, auditing & banking practice.
SECTION B
This section carries 60% of the overall marks for the paper and comprises a choice of two questions
out of three, each carrying equal marks, i.e. 30 marks each. In addition to AAOIFIs accounting,
auditing, governance and ethical standards, the questions in this section cover the definition and basic
characteristics of the various contracts that govern the transactions of Islamic financial institutions as
well financial management aspects of Islamic banks.

SYLLABUS
15.1 FINANCIAL ACCOUNTING STATEMENTS AND STANDARDS FOR ISLAMIC FINANCIAL

INSTITUTIONS
Topic Weighting 50%
This is the key area of the syllabus and will be examined as the compulsory question in Section A that
scores the highest mark and may also be an optional question in Section B. Candidates must
therefore have an in-depth understanding of all the financial accounting statements and standards
issued by AAOIFI and are prepared to apply their knowledge of these pronouncements to complex
transactions that are undertaken by Islamic financial institutions.
15.2 AUDITING STANDARDS FOR ISLAMIC FINANCIAL INSTITUTIONS (ASIFI)
Topic Weighting 15%
ASIFI is a key area of the syllabus. This key area may be examined as the second compulsory
question in Section A and may also be an optional question in Section B. Candidates must therefore
have a thorough understanding of what is required in the ASIFI with regard to the audit of Islamic
financial institutions, the auditors report, the relationship of the external auditor with the Sharia
supervisory board (SSB).
Topic Weighting 15%
GSIFI is a key area of the syllabus. This key area may be examined as the second compulsory
question in Section A and may also be an optional question in Section B. Candidates must therefore
have a thorough understanding of what is required in the GSIFI with regard to the appointment,
composition, dismissal, and report of the SSB, Sharia review, internal Sharia review, and audit and
governance committee.
15.4 FINANCIAL MANAGEMENT ASPECTS OF ISLAMIC BANKS
Topic Weighting 10%
Financial management aspects of Islamic banks are a key area of the syllabus. This key area may be
examined as the second compulsory question in Section B and may also be an optional question in
Section A. Candidates must therefore have a thorough understanding of the purpose and calculation
of the capital adequacy ratio for Islamic banks, and the key issues in the liquidity management, risk
management, and agency problem of these banks.

15.5 CODES OF ETHICS
Topic Weighting 5%
This area will be examined as part of an optional question in section B. Candidates must have a
thorough understanding of the codes of ethics issued by AAOIFI and be able to identify the additional
requirements in these codes compared to the codes of ethics issued by the International Federation of
Accountants.
15.6 DEFINITION AND BASIC CHARACTERISTICS OF CONTRACTS
Topic Weighting 5%
This area will be examined as part of an optional question in section B. Candidates must be
conversant with the definition and basic characteristics of the various contracts that govern the
transactions of Islamic financial institutions.
Islamic financial institutions have their own unique characteristics. In order to be able to offer
competent advice and to have the ability to support business decisions and transactions, a
professionally qualified accountant who opts to be involved in work related to Islamic financial
institutions must have a thorough knowledge of the various contracts that govern the transactions of
these institutions, the accounting, auditing and governance standards that have been specifically
developed for these institutions, as well as the key financial management issues relating to Islamic
banks.
Paper 15 therefore aims to:
(a) Build on the knowledge acquired by the candidate in financial accounting and auditing; and
(b) Ensure that as an accountant, the candidate is well equipped with the knowledge that enables
him/her to professionally perform his/her role both in practice and in business.
ETHICS
Students are advised that the standards outlined in the IFAC Code of Ethics for Accountants issued by
the IESBA are implicit in, and examinable throughout, the AIA syllabus. The Code can be accessed
via the AIA website at www.aiaworldwide.com
appropriate, to the Ethical Standards for Auditors (ESs) published by the Auditing Practices Board.
Students following other routes will not be penalized if they refer to ESs in preference to the IFAC
Code of Ethics. ESs can be accessed via the Financial Reporting Councils website at
http://www.frc.org.uk/Our-Work/Codes-Standards/Audit-and-assurance/Standards-and-guidance.aspx

RECOMMENDED READING
You can purchase any of the books listed quickly and easily through the publishers website or link
stated below.
Islamic Law and Finance: Religion, Risk and Return
Author: Vogel, F E; Hayes, S L
Publisher: Kluwer Law International
Website: www.blackwell.co.uk
ISBN: 9041106243
An Introduction to Islamic Finance
Author: Usmani, M T
Publisher: Kluwer Law International
Website: www.blackwell.co.uk
ISBN: 9041116192
Islamic Finance - Innovation and Growth
Author: Karim, R A A and Archer, S
Publisher: Euromoney Books
Website: www.euromoneyplc.com
ISBN: 978-1-855649217
Published: e-Book
AAOIFI Publications
Accounting, Auditing and Governance Standards for Islamic Financial Institutions
Shariah Standards for Islamic Financial Institutions
Statement on the Purpose and Calculation of Capital Adequacy Ratio for Islamic Banks
Website: www.aaoifi.com

Islamic Financial Services Board (IFSB) Publications
Published standards on Islamic financial services
Website: www.ifsb.org/published.php
ARTICLES
Research in Accounting Regulation
Archer, S., and Karim, R. A. A., (1997), Agency Theory, Corporate Governance and the Accounting
Regulation of Islamic Banks, Supplement, pp. 97 114.
Journal of Islamic Accounting and Business Research (JIABR)
Archer, S., Karim, R. A. A., and V. Sundararajan, V (2010) Supervisory regulatory, and capital
adequacy implications of profit-sharing investment accounts in Islamic finance, Vol.1 (1) 10-31.
Zainol, Z and Hj.Kassim, S. (2012), A critical review of the literature on the rate of return risk in
Islamic banks, Vol. 3 (2): 121-137.
Baghdadabad, M.R.T., Matnor, F. and Ibrahim, I. (2012), Optimized drawdown risk in evaluating the
performance of Malaysian mutual funds, Vol. 3(2): 138-162.
Journal of Management and Governance
Archer, S., Karim, R. A. A., and Al-Deehani, T (1998), Financial Contracting, Governance Structures
and the Accounting Regulation of Islamic Banks: An Analysis in Terms of Agency Theory and
Transaction Cost Economics,, Special Issue on Accounting Regulation, pp. 149-170.
The International Journal of Accounting
Karim, R. A. A., (2001), International Accounting Harmonisation, Banking Regulation and Islamic
Banks, USA, Vol. 36 (2): 169-193.
Journal of Islamic Accounting and Business Research
Website: www.emeraldinsight.com/jiabr.htm

OCCASIONAL PAPERS
Risk Management: An Analysis of issues in Islamic Financial Industry
Khan, T., and H. Ahmed, (2001), Occasional Paper No. 5, (Jeddah, Saudi Arabia: Islamic Training
Institute, Islamic Development Bank). ISBN: 9960-32-109-6
Website: www.aaoifi.com

9.0 PAPER 16. TAXATION AND TAX PLANNING
MALAYSIA VARIANT
AIMS
The objective of the paper is to ensure that

students have:
A thorough understanding of the advanced Fig. 16 Inter-relationship of units

aspects of Malaysian taxation
the ability to apply the principles and concepts

involving tax planning and tax compliance and
5
the ability to provide a wholesome response to Auditing & Taxation
practical problems (Malaysia)
DESCRIPTORS
Upon completion, candidates are expected to be 16

able to carry out compliance and advisory work in Taxation &
Tax Planning
taxation. They should be able to appreciate the (Malaysia)
common tax planning issues and specific issues
involving the chargeable entities and persons in
Malaysia. Candidates are also expected to
reasonably appreciate emerging economic and
cross-border issues from the tax perspective.
A three-hour 15 minute paper consisting of two sections. The total marks for the paper are 100.
SECTION A
This section scores 60% of the overall marks for the paper and consists of three compulsory
questions. Candidates are required to answer all questions. The allocation of marks may not
be equal. Question 1 is a 30 mark case study style question. This will be an integrated tax
computation and compliance question. Question 2 and 3 are both 15 mark questions on
integrated tax and planning involving income tax and related legislations.
This section will focus on comprehensive tax computations and tax planning.

SECTION B
This section scores 40% of the overall marks for the paper and consists of two 20 mark questions
out of a choice of three. The questions cover specific topics and developments in direct and
indirect taxation.
Where appropriate the allocation of marks to parts of a question will be stated.
Fifty to seventy per cent of the questions are computational and thirty to fifty per cent of the
questions are essay based.
Candidates are expected to be familiar with contemporary issues and major case decisions.
SYLLABUS
The syllabus covers the following legislations:
Income Tax Act 1967

Real Property Gains Tax Act 1976
Promotion of Investment Act 1986
Stamp Act 1949
Goods and Services Tax Act 2014
Sales Tax Act 1972
16.1 PRINCIPLES OF TAXATION
Topic Weighting 10%
Taxability of business income ( including capital and revenue income)

Deductibility of business expenses (including capital and revenue expenses)
Basis periods and change of accounting dates for companies
16.2 TAXATION OF COMPANIES
Topic Weighting 10%
Company tax computations (determination of adjusted income, statutory income, aggregate

income, total income, chargeable income and tax rates)
Single-tier corporate tax system and dividend distribution.
Estimates of tax payable (including the date due, instalment payments, revisions and all the
possible penalties
Group relief losses under Section 44A
Group re-structuring, liquidation and inter-company dealings
Related party transactions including transfer of current and fixed assets

16.3 CAPITAL ALLOWANCES
Topic Weighting 5%
Plant, machinery and industrial buildings

Controlled transfers under para 38-40 Schedule 3 of the Income Tax Act 1967
Agricultural allowances
16.4 CROSS-BORDER TRANSACTIONS
Topic Weighting 10%
Withholding taxes (including advising the relevant transactions)

Concept of Permanent Establishment in the Double taxation treaties
Transfer pricing and section 140A of the income Tax Act 1967
Cross-border financing,, foreign source of income and subsidiaries of foreign companies
Tax incentives under Labuan Offshore Financial Centre
16.5 SPECIAL CASES AND SPECIALISED INDUSTRIES
Topic Weighting 5%
Reits and Unit Trusts
16.6 INVESTMENT INCENTIVES
Topic Weighting 10%
All incentives under Income Tax Act 1967
Reinvestment allowance
Promotion of Investment Act 1986
Pioneer Status
Investment tax allowance
16.7 TAX PLANNING
Topic Weighting 30%
Candidates should be able to identify and advise opportunities to alleviate, mitigate or defer the impact
of direct or indirect taxation including.

For companies
Group relief losses under Section 44A
Group re-structuring, liquidation and inter-company dealings
Related party transactions including transfer of current and fixed assets
Utilisation of business losses and capital allowance
Investment holding company under section 60F
Other areas which is mentioned in this Paper 16 syllabus
For individual:Employment income including perquisites and benefits in kind

Remuneration packages
Exit planning for employees
16.8 TAX AUDITS AND INVESTIGATION
Topic Weighting 5%
Tax audits and adjustments

Distinction between tax avoidance and tax evasion
Investigation powers of IRB
Backduty computation
Events that trigger audits & investigation
16.9 INDIRECT TAXATION & STAMP DUTY
Topic Weighting 5%
Goods and Services Tax (scope of charge,supply,time of supply,types of supply, input tax credit
accounting for GST)
Stamp Duty particularly the Stamp Duty Relief under section 15 and 15A
16.10 REAL PROPERTY GAINS TAX

Topic Weighting 10%
Computation of Real Property Gains Tax (excluding Real Property Company shares)
RECOMMENDED READING
Advanced Malaysian Taxation
Publisher: PAAC
ISBN: 9289274493

Malaysian Taxation
Publisher: PAAC
ISBN: 9289274486
Veerinder on Malaysia Tax Theory and Practice (2012 Edition)
Author: Veerinderjeet Singh
Publisher: CCH
ISBN: 9789814359467
th
Malaysian Taxation: Principles and Practice (21 Edition) 2015
ISBN: 9789839526455
th
Advanced Malaysian Taxation: Principles and Practice (17 Edition) 2015
ISBN: 9789839526547
rd
A Comprehensive Guide to Malaysian Taxation under Self-Assessment (3 Edition)
Author: Jeyapalan Kasipillai
Publisher: McGraw-Hill (Malaysia)
ISBN: 9833219721
Website: www.mheducation.asia
A Guide to Malaysian Goods and Services Tax
Author: Jeyapalan Kasipillai
Publisher: McGraw-Hill (Malaysia)

ISBN: 9789670761091
Website: www.mheducation.asia
Journals
The Chartered Tax Institute of Malaysia, Tax Guardian (quarterly)
The Malaysian Insititute of Accountants, Accountants Today (monthly)
Inland Revenue Website
http://www.hasil.org.my
http://www.gst.customs.gov.my

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EXAM SCHEME &

1. Notes and requirements in respect of the exams 3-5

Entry to Exams and Exemptions 3

2. Exam Structure 6-7

Educational Objectives of the AIA Programme 6-7

3. Recognised Professional Qualification (RPQ) 8

5. Syllabuses and Reading Lists 10-47

6. Paper 5 Auditing and Taxation 17-24

7. Paper 8 Company Law 25-34

8. Paper 15 Islamic Accounting, Auditing and Banking Practice 35-41

9. Paper 16 Taxation & Tax Planning 42-47

1.1 ENTRY TO THE EXAMS AND EXEMPTIONS

1.2 CONSTITUTIONAL AND ETHICAL COMPLIANCE

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1.3.1 FOUNDATION AND PROFESSIONAL 1 LEVELS

1.3.2 PROFESSIONAL 2 LEVEL

1.4 NEW LEGISLATION

1.5 APPEALS PROCEDURE

1.6 MAKING AN INITIAL ENQUIRY

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1.8 HOW THE AIA DEALS WITH YOUR APPEAL

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2.1 EDUCATIONAL OBJECTIVES OF THE AIA

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1 Financial Accounting 1 4 Law

2 Business Economics 5 Auditing and Taxation

3 Management Accounting 1 6 Information Processing

7 Auditing 10 Business Management

8 Company Law 11 Financial Accounting 2

9 Management Information 12 Management Accounting 2

13 Financial Accounting 3 15 Professional Practice (Auditing)

14 Financial Management 16 Taxation and Tax Planning

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4.1 SUBJECT THEMES DEVELOPED WITHIN THE AIA

A professional accountants contribution to business operations is developed through the study of

Financial Business Management Information Law Auditing &

Financial Business Management Management Company Auditing

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5.2 READING LISTS

5.3 AIA ACHIEVE

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5.5 INTERNATIONAL ACCOUNTING STANDARDS (IASS)

A list of currently examinable IASs and IFRSs is given below.

International Accountings Standards (IASs) Examinable in Paper

1 Presentation of Financial Statements

7 Statements of Cash Flows

8 Accounting Policies, Changes in Accounting Estimates and

10 Events After the Reporting Period

16 Property, Plant and Equipment

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20 Accounting for Governments Grants and Disclosure of

21 The Effects of Changes in Foreign Exchange Rates

24 Related Party Disclosures

27 Separate Financial Statements

28 Investment in Associates and Joint Ventures

29 Financial Reporting in Hyperinflationary Economies

32 Financial Instruments: Presentation

33 Earnings per Share

34 Interim Financial Reporting

37 Provisions, Contingent Liabilities and Contingent Assets

Note: Free website providing comprehensive information about IFRS: www.iasplus.com

International Financial Reporting Standards (IFRS) Examinable in Paper

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