For UPSC applicants with commerce background, commerce and accounting is the most advantageous optional subject. Accounting, cost accounting, taxation, auditing, financial planning, financial markets, organisational theory and conduct, management of human resources, and industrial relations are among the topics covered in the UPSC commerce and accountancy optional.
We’ve covered a complete curriculum for the commerce and accounting optional topic, as well as the strategy for Commerce as an optional subject for IAS Mains. Without further ado, let’s get it started.
UPSC Mains Optional – Commerce & Accountancy
In the sections below, you will learn about the syllabus of Commerce and Accountancy and how to approach them.
UPSC Mains Commerce & Accountancy Syllabus PAPER I
# Accounting and Finance
# Accounting, Taxation & Auditing
Accounting as a Financial Information System; Impact of Behavioural Sciences. Accounting Standards e.g., Accounting for Depreciation, Inventories, Research and Development Costs, Long-term Construction Contracts, Revenue Recognition, Fixed Assets, Contingencies, Foreign Exchange Transactions, Investments and Government Grants, Cash Flow Statement, Earnings Per Share.
Accounting for Share Capital Transactions including Bonus Shares, Right Shares, Employees Stock Option and Buy-Back of Securities. Preparation and Presentation of Company Final Accounts. Amalgamation, Absorption, and Reconstruction of Companies.
Nature and Functions of Cost Accounting. Installation of Cost Accounting System. Cost Concepts related to Income Measurement, Profit Planning, Cost Control, and Decision Making.
Methods of Costing: Job Costing, Process Costing, Activity Based Costing. Volume – cost – Profit Relationship as a tool for Profit Planning.
Incremental Analysis/ Differential Costing as a Tool of Pricing Decisions, Product Decisions, Make or Buy Decisions, Shut-Down Decisions, etc.
Techniques of Cost Control and Cost Reduction: Budgeting as a Tool of Planning and Control. Standard Costing and Variance Analysis.
Responsibility Accounting and Divisional Performance Measurement.
Income Tax: Definitions; Basis of Charge; Incomes which do not form part of Total Income. Simple problems of Computation of Income (of Individuals only) under Various Heads, i.e., Salaries, Income from House Property, Profits and Gains from Business or Profession, Capital Gains, Income from other sources, Income of other Persons included in Assessee’s Total Income.
Set – Off and Carry Forward of Loss. Deductions from Gross Total Income. Salient Features/Provisions Related to VAT and Services Tax.
Company Audit: Audit related to Divisible Profits, Dividends, Special investigations, Tax audit. Audit of Banking, Insurance, Non-Profit Organizations, and Charitable Societies/Trusts/Organizations.
Financial Management, Financial Institutions, and Markets
Finance Function: Nature, Scope, and Objectives of Financial Management: Risk and Return Relationship. Tools of Financial Analysis: Ratio Analysis, Funds-Flow, and Cash-Flow Statement.
Capital Budgeting Decisions: Process, Procedures, and Appraisal Methods. Risk and Uncertainty Analysis and Methods.
Cost of capital: Concept, Computation of Specific Costs and Weighted Average Cost of Capital. CAPM as a Tool for Determining Cost of Equity Capital.
Financing Decisions: Theories of Capital Structure – Net Income (NI) Approach, Net Operating Income (NOI) Approach, MM Approach, and Traditional Approach. Designing of Capital structure: Types of Leverages (Operating, Financial and Combined), EBIT- EPS Analysis, and Other Factors.
Dividend Decisions and Valuation of Firm: Walter’s Model, MM Thesis, Gordan’s Model Lintner’s Model. Factors Affecting Dividend Policy.
Working Capital Management: Planning of Working Capital. Determinants of Working Capital. Components of Working Capital Cash, Inventory and Receivables.
Corporate Restructuring with focus on Mergers and Acquisitions (Financial aspects only).
Financial Markets and Institutions
Indian Financial System: An Overview of Money Markets: Participants, Structure, and Instruments. Commercial Banks. Reforms in the Banking sector. Monetary and Credit Policy of RBI. RBI as a Regulator.
Capital Market: Primary and Secondary Market. Financial Market Instruments and Innovative Debt Instruments; SEBI as a Regulator.
Financial Services: Mutual Funds, Venture Capital, Credit Rating Agencies, Insurance, and IRDA.
UPSC Mains Commerce & Accountancy Syllabus PAPER II
Organisation Theory and Behaviour, Human Resource Management and Industrial Relations Organisation Theory and Behaviour
Nature and Concept of Organisation; External Environment of Organizations -Technological, Social, Political, Economical and Legal; Organizational Goals – Primary and Secondary goals, Single and Multiple Goals; Management by Objectives.
Evolution of Organisation Theory: Classical, Neo-classical and Systems Approach.
Modern Concepts of Organisation Theory: Organisational Design, Organisational Structure, and Organisational Culture.
Organisational Design–Basic Challenges; Differentiation and Integration Process; Centralization and Decentralization Process; Standardization / Formalization and Mutual Adjustment. Coordinating Formal and Informal Organizations. Mechanistic and Organic Structures.
Designing Organizational structures–Authority and Control; Line and Staff Functions, Specialization and Coordination.
Types of Organization Structure –Functional. Matrix Structure, Project Structure. Nature and Basis of Power, Sources of Power, Power Structure, and Politics. Impact of Information Technology on Organizational Design and Structure. Managing Organizational Culture.
Meaning and Concept; Individual in organizations: Personality, Theories, and Determinants; Perception – Meaning and Process.
Motivation: Concepts, Theories, and Applications. Leadership-Theories and Styles. Quality of Work Life (QWL): Meaning and its impact on Performance, Ways of its Enhancement. Quality Circles (QC) – Meaning and their Importance. Management of Conflicts in Organizations. Transactional Analysis, Organizational Effectiveness, Management of Change.
Human Resources Management and Industrial Relations
Human Resources Management (HRM)
Meaning, Nature and Scope of HRM, Human Resource Planning, Job Analysis, Job Description, Job Specification, Recruitment Process, Selection Process, Orientation and Placement, Training and Development Process, Performance Appraisal and 360° Feedback, Salary and Wage Administration, Job Evaluation, Employee Welfare, Promotions, Transfers, and Separations.
Industrial Relations (IR)
Meaning, Nature, Importance and Scope of IR, Formation of Trade Unions, Trade Union Legislation, Trade Union Movement in India. Recognition of Trade Unions, Problems of Trade Unions in India. Impact of Liberalization on the Trade Union Movement.
Nature of Industrial Disputes: Strikes and Lockouts, Causes of Disputes, Prevention and Settlement of Disputes.
Worker’s Participation in Management: Philosophy, Rationale, Present Day Status and Future Prospects. Adjudication and Collective Bargaining.
Industrial Relations in Public Enterprises, Absenteeism and Labour Turnover in Indian Industries and their Causes and Remedies. ILO and its Functions.
Strategy for Commerce as an Optional Subjects for IAS Mains
Mind-Map the Syllabus
This is the first strategy for Commerce as an Optional subject for IAS Mains. The first step is to look over the curriculum thoroughly and create a mind map of the contents. To minimise distractions, you ought to be able to sort out syllabus-centric subjects. Next, look through the questions from the prior year because they are frequently repeated in various ways.
Practice the Practical Questions
The prior year’s practical questions are particularly essential since they establish the tone for the anticipated questions. Solve them several times so you can tackle these questions in the shortest amount of time possible during the examination.
Revise Theory Part More
Another approach for Accountancy as an Optional subject for IAS Mains is to maintain as much material as feasible, the theory section should be changed consistently. Paper-1 has both theoretical and practical problems, whilst Paper-2 is mainly theoretical. As a result, stick to the curriculum and go through each item thoroughly.
Practice Diagrams & Flowcharts
Both papers now contain a lot of diagrams and flowcharts that might help you get an advantage if you use them in your replies. As a result, rehearse them several times before the examination. Make sure your responses include relevant illustrations and flow diagrams. This strategy for Accountancy as an Optional can help you out a lot.
Make Your Notes Wisely
The last strategy and approach for Accountancy as an Optional subject for IAS Mains is taking handwritten notes, to make sure they’re both comprehensive and concise. Long sentences that are bulky and wordy should be avoided. Streamline your notes and maintain them up to speed with current events.
Is Commerce and Accountancy a Good Optional Subject for IAS Mains?
In terms of preparation and study time, it is one of the lengthier optional periods, and the bulk of the material is static. The most challenging element of preparation is that it requires significant reading and then the synthesis of material from a variety of sources in order to offer comprehensive coverage. Because study resources are few, students must largely depend on coaching. It has the benefit of including graduation and professional courses, as well as having around 150 numerical marks, which may aid in achieving good grades.
Books for Commerce 1
#Indian Financial System by M.Y. Khan
#Financial Management; Text & Problems by Khan & Jain
#Corporate Accounting by Naseem Ahmed
#Practical Approach to Income Tax, Service Tax, VAT and Wealth Tax : Problems & Solutions By Gupta & Ahuja
Books for Commerce 2
#An Introduction to Business Organisation & Management by B.P. Singh and T.N. Chhabra
#Human Resource Management: Text and Cases
#Industrial Relations, Trade Unions and Labour Legislation by P.R.N Sinha
How to Tackle a Commerce and Accountancy IAS Mains Optioanl Paper?
There must be an introduction, which might be indirect through a few words or quotes, or comprehensive with a general explanation followed by a precise definition. Following that, the topic must be briefly discussed, followed by a reference to other sections and a return to the query.
Diagrams may be quite useful. Responses should always finish on a visionary or optimistic note, with an example if necessary or a few sentences. The usage of paragraphs and points should be combined. Wherever feasible, provide examples, but avoid using the same company in several questions.
We hope that now you are fully aware of this common optional subject for your IAS Mains exam. Before choosing your optional subject, do a self-analysis of your strengths and weaknesses regarding a particular subject. Do not pick a subject just because your favourite IAS chose it.
For more tips regarding the UPSC optional subjects, check out the blog section of UPSC Pathshala.