NEW SYLLABUS FOR AAO (B-16) EXAMS

PREAMBLE

The syllabus of Accountants Promotion Examination (APE) of Pakistan

Military Accounts Department (PMAD) has been reviewed to make it in line with
the latest syllabus of Pakistan Audit Department (PAD). The aim is to have a
standardized pattern of curriculum to meet the inter-departmental professional
commitments, while retaining focus on peculiar requirements of Defence Services.

The revised syllabus includes latest techniques of Government accounting

and auditing covering specialized areas of Government rules/regulations. Besides,
Information Technology has also been incorporated in the curriculum to cope with
the modern challenges of office automation and computerization, aimed at
providing efficient professional services to the clients.

Rawalpindi
April, 2003

Muhammad Izhar-ul-Haq
Military Accountant General

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NEW SYLLABUS FOR AAO (B-16) EXAMS

INDEX

S.No
1
2
3
4
5
6
7
8
9
1
2
3
4
5
6
1
2
3
4
5
6
7
8
9

Particulars
TERMS AND CONDITIONS
Eligibility
Submission of Candidature
Examination Fee
Examination
Paper Setting
Pass Marks
Exemption
Results
For Old Candidates
PART-I
Business Communication & Behavioral Studies
Financial Accounting
Legal frame work of Public Sector Accounts &
Economics (Theory)
Business Mathematics and Statistics (Theory)
Pay, Pension & TA (Theory)
Pay Pension & TA (Practical)
PART-II
Cost Accounting.
Auditing / Government Auditing.
Store and Works (MES) Theory
Store and Works (MES) Practical
Information Technology (Theory)
Govt. Accounting (Theory)
Govt. Accounting (Practical)
Exemption Scheme (Annex-A)
Admission form (Annex-B)

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Page No.
III TO VII
III
III
III
III
V
VI
VI
VI
VII
01
03
05
07
09
11
14
16
20
22
24
25
26
27
28

TERMS AND CONDITIONS

1.

ELIGIBILITY
Admission to the examination will be opened to both graduates and non-graduates

permanent and temporary Senior Auditors/Junior Auditors of the Military Accounts Department.
To be eligible for appearing at the examination an individual must have put in at least three years
service (including continuous temporary service) in the Military Accounts Department. However
graduate Auditors will be allowed to appear in the examination on completion of one year service
in the department
Senior Auditors and Junior Auditors are eligible to take part-II of AAO Promotion
Examination (New syllabus) after passing the part-I examination. There is no limit of number of
chances in the new syllabus.
2.

SUBMISSION OF CANDIDATURE
The Controllers will submit to the M.A.G. on the dates prescribed by him a statement in the

prescribed form (Annex-B) of the candidates who are recommended to appear at the next
examination.

3.

EXAMINATION FEE
Each candidate seeking admission to the examination will pay an examination fee of Rs.

100/-. The candidates will not be allowed to withdraw their names from the examination nor will
their fee be refunded once their candidature has been accepted by the MAG.

4.

EXAMINATION
In each of the subjects mentioned in the syllabus, the theoretical papers will be answered

without books while the practical papers will be conducted with the help of books.
Objective and written test components will be administered separately one after the other in
the same session. Similarly, examination of a paper divided into sections will be
administered separately in the same session.
The examination will be held in two parts. Part I and Part-II will consist of the following
papers: -

NEW SYLLABUS FOR AAO (B-16) EXAMS

PART I
Paper I
Business Communication and Behavioral Studies.
Paper 2
Financial Accounting.
Paper 3
Legal Frame Works of Public Sector Accounts and Economics (Theory).

Section A

Legal Frame Works of Public Sector Accounting.

Section B Economics.
Paper 4
Business Mathematics and Statistics (Theory).
Section A

Business Mathematics.

Section B

Business Statistics.

Paper 5
Pay, Pension & TA (Theory).
Paper 6
Pay Pension & TA (Practical).
PART II
Paper 1
Cost Accounting.
Paper - 2
Auditing / Government Auditing.
Section A

Auditing.

Section B

Government Auditing.

Paper 3
Store and Works (MES) Theory.
Section A Store Accounting.
Section B

Works (MES) Accounts.

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NEW SYLLABUS FOR AAO (B-16) EXAMS

Paper 4
Store and Works (MES) Practical.
Section A Store Accounting.
Section B

Works (MES) Accounts.

Paper 5
Information Technology (Theory).
Paper 6
Government Accounting (Theory).
SECTION 1

General Concepts, Procedure and Practices.

SECTION 2

General Rules & Procedures (Defence Accounts)

PAPER 7
Government Accounting (Practical with Books).
SECTION 1

General Concepts, Procedure and Practices.

SECTION 2

General Rules & Procedures (Defence Accounts)

Note:- Time allowed to attempt each paper will be three hours.

5.

PAPER SETTING
In setting a paper, the examiner will give the following weightage to objective and written

test components for the testing of knowledge and application thereof. These grids are independent
of marks allocated in specifications grids given in the syllabus of each subject. The grids are given
for guidance purpose only and minor deviations in the setting of a question paper may be expected.
Components
MCQs/SFQs
WT
Total
MCQs =
SFQs =
WT
=
6.

Marks
25
75
100

Multiple Choice Questions

Short Form Questions
Descriptive and Computational Questions

PASS MARKS
Pass/aggregate marks for each part of are as follows: a)
b)

Pass marks in each paper

Aggregate marks for each part of exam

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40%
45%

NEW SYLLABUS FOR AAO (B-16) EXAMS

7.

EXEMPTIONS
Candidates securing at least 60% marks in any paper will be given exemption in that paper.

Any candidate failing in any part of the AAO Promotion Examination (New Syllabus) or (Old
Syllabus) but securing at least 60% marks in any paper will be exempted from appearing in that
paper in future examinations provided that where there are theoretical and practical papers in a
subject, the candidate who passes both papers by securing at least 40% marks in each paper and is
able to secure 60% or more marks on the aggregate will be eligible for exemption in the relevant
subject(s). The examination will be qualifying and not competitive.
Exemption for various subjects / papers of AAO Promotion Examination (new syllabus)
shall also be admissible as shown in Annexure-A.
8.

RESULTS
The results of AAO Promotion Examination (New Syllabus) or (Old Syllabus) once

declared by the M.A.G. are absolute and final. Representations for re-evaluation or re-examination
etc. of answer books should, therefore, not be forwarded to the M.A.G. The complete result of the
examination will be communicated by the M.A.G. to the office of all controllers for information of
all concerned.
The result of the failures in the examination showing the marks gained in each subject and
the total marks will be notified by the Military Accountant General for information of all
concerned.
9.

FOR OLD CANDIDATES

The old Syllabus of APE will be discontinued after allowing Candidates three chances in

the following manners.

(i)

A Senior Auditor/Junior Auditor who had appeared in the APE (Old Syllabus) in the past
shall be allowed three chances to pass the APE-I irrespective of the fact whether or not he
had obtained any exemption in any paper.

(ii)

If any candidate of the above mentioned category passes the APE part-I examination
within three chances, he shall be allowed another three chances to pass the APE Part-II.

(iii)

Candidates who have already passed the APE Part-I shall be allowed three chances to pass
the APE Part-II.

(iv)

Exemptions obtained in Parts-I & II of APE shall remain valid in the AAO Promotion
Examination (New Syllabus) as shown in Annexure.
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NEW SYLLABUS FOR AAO (B-16) EXAMS

(v)

The candidates who passed APE Part-I and could not pass part-II in old syllabus in given
chances shall be exempted in new syllabus.

Note:- Categories of candidates falling under clause i & iii can appear only in first three
examinations after introduction of new syllabus and those falling under clause-ii can appear in
first three examinations after passing part-I.

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NEW SYLLABUS FOR AAO (B-16) EXAMS

NEW SYLLABUS FOR ASSISTANT ACCOUNTS OFFICERS

PROMOTION EXAMINATION FOR P.M.A.D.
PART-1
PAPER- 1
BUSINESS COMMUNICATION AND BEHAVIORAL STUDIES
MARKS-100.
AIMS:
The aims of the syllabus are:a) To test the candidate's knowledge of Business English with particular emphasis on the
evaluation of capabilities to express lucidly and in grammatically correct English in an
imaginative and well-reasoned manner.
b) To test the candidate's ability to carry out Public Sector correspondence effectively, design
formats of reports, writing of reports and design various forms used for information and data
collection.
c) To test the candidate's ability for interacting with people, including participating in meetings,
interviews and communication.
d) To acquaint candidates with elements of organizational behavior, motivation, decision making
and problem solving skills.
e) To give the candidates exposure to principles of management and office procedures.
SPECIFICATION GRID
Sr.
#
1.
2.
3.
4.

SYLLABUS CONTENTS AREA

WEIGHTAGE
Principles of applied grammar
Public sector correspondent Report, Writing,
Prcis Writing
Inter-personal skills and
behavioral sciences '
Organization and Methods
Total

MARKS
20
40
20
20
100

CONTENTS
1.

PRINCIPLES OF APPLIED GRAMMAR

An understanding of the principles of applied grammar including parts of speech and tenses;
dialogues and idioms commonly used in social and business context synthesis of sentences prcis
writing; paraphrasing; and composition including essay writing.
2.
Public sector correspondence: Kinds of letters, drafting official correspondence, i.e, letters,
office memoranda, U.O. Note, D.O. Letters, telegrams, half-margin etc., basic qualities of letters
and other communications, accuracy and coherence, style to readers taste.

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NEW SYLLABUS FOR AAO (B-16) EXAMS

3.
Prcis Writing: Prcis of correspondence, notes and passages etc. Objects of prciswriting, essential of good prcis; form and style, omission of details, Drafting official
correspondence.
4.
5.

Report Writing: Principles and practice

a) Inter-personal skills
Importance of communication, process of communication barriers in communication.
b)

6.

Behavioral sciences
The challenges faced by the management; motivation theory; types of motives; goal
setting; leadership theory; dealing with job stress; and decision making.
ORGANIZATION & METHODS
Management principles, organization techniques, office management.

Introduction to systems and procedures, flow charting, work distribution, job description,
record management.
BOOK RECOMMENDED
FUNCTIONAL ENGLISH
Name of the Book
Author
Management English Course Book K: E. Rowlands
Business Communication Today
Courtland L.Bovee, John V. Thill
Functional English
Blundell, Higgins, middle miss
Management (Hodges)
Notes prepared and supplied by (HRM) Wing.
INTER-PERSONAL SKILLS
Name of the Book
Author
The Interpersonal Communication Book, 44th
Joseph A. Devito
Interplay: The Process of Interpersonal
Ronald B. Adier Lawrence
Communication (3rd Edition)
B. Rosenfeld
th
Interpersonal Communication (6 Edt.)
Prof William Heney
BEHAVIORAL SCIENCES
Name of the Book
Author
rd
Organizational Behavior (3 Edition)
Fred Lufthansa
Management & Organizational Behavior Laurie J. Mul

********************************************

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NEW SYLLABUS FOR AAO (B-16) EXAMS

PAPER2
FINANCIAL ACCOUNTING
Marks 100.
AIM
To test the candidate's ability to understand accounting theory and practices; and prepare and
analyze the financial statements of limited companies.
SPECIFICATION GRID

1
2
3
4
5
6

Syllabus Contents Area

Weightage
Accounting theory
10
Financial accounting practices
30
Accounts of Limited Companies
20
International Accounting Standards
10
Receipts and Payment Accounts
10
Objective and Interpretation of Financial
20
Statements
100
Total

CONTENTS
1.

Accounting Theory

Fundamental accounting concepts; definition and scope of financial accounting; use of

accounting terms; conceptual framework of accounting; users of financial statements asset
valuation alternatives; historical cost, replacement cost, net realizable value and economic value,
revenue recognition; capital or revenue treatment; the good-will concept; International Accounting
Standards - 1, 2, 16 and 18.
2.

Financial Accounting Practice

Principles of double entry book keeping; method of keeping and presenting accounts books
of prime entry (cash book, petty cash book, sales journals, purchase journals, purchases and sales
return journals etc); principal and subsidiary ledgers; trial balance; trading account and balance
sheet; manufacturing and profit and loss accounts; control accounts and reconciliation; issue,
discounting and dishonoring of bills of exchange; transactions through banks, rectification of
errors, bank reconciliation statements; capital expenditure; revenue expenditure and deferred
revenue expenditure; fixed assets and method of calculating depreciation; provisions;
appropriation and transfers to reserves; types of reserves account receivables, bad debt expense
and provision for doubtful debts; valuations of stock; LIFO, FIFO, average cost and moving
average cost.
3.

Receipt and payment accounts etc,

Receipt and payment and income and expenditure accounts; and preparation of accounts
from incomplete records.

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NEW SYLLABUS FOR AAO (B-16) EXAMS

4.

Accounts of limited companies

Accounting of limited companies in line with statutory provisions and international

accounting standards (excluding liquidation, reconstruction, amalgamation and consolidation) and
simple cash flow statements.
5.

International Accounting Standards

Knowledge and application of prescribed IASs (IASs prescribed as follows: 1, 2, 5, 8, 9,

10, 11, 13, 16, 17, 18 and 23).
6.

Objectives and interpretation of financial statements

User groups including shareholders, managers, employees, government, creditors, analyst
and advisors and the public and their information needs. Characteristics of useful information and
the problems associated with its production, significant accounting ratios and their relationship.

RECOMMENDED BOOKS
FINANCIAL ACCOUNTING
Name of the Book
Author
Book-keeping and Accounting
Spicer and Pegler
Business Accounting
Frank Wood
Advanced Accounts
M.C. Shukla and T.S. Grewal
Accounting
Meigs, and Meigs
Principles of Accounting
M.A. Ghani
Fundamentals of Accounting
Nisawonger and Fees
Accountancy
William Pickles
Advanced Accounting
R.L. Gupta
*******************************************

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NEW SYLLABUS FOR AAO (B-16) EXAMS

PAPER 3
LEGAL FRAME WORKS OF PUBLIC SECTOR ACCOUNT AND ECONOMICS
(THEORY)
Marks.100.
(IN TWO SEPARATE SESSIONS)
SECTION (A)

MARKS - 50

LEGAL FRAME WORKS OF PUBLIC SECTOR ACCOUNTING

AIM:
To acquaint candidates with some selected laws in Pakistan and to develop amongst them
an understanding of their application,
SPECIFICATION GRID
Sr.
#
1
2
3
4

SYLLABUS CONTENTS AREA

Introduction to legal system
Contract Act
Company Act
Taxation
Total

WEIGHTAGE
15
15
10
10
50

CONTENTS
1. Statutory provisions and the legal system in Pakistan covering Audit & Accounts.
2. Principles relating to and application of laws of contract (including contract of indemnity and
guarantee, bailment and agency).
3. Taxation, Company's Law & Negotiable Instruments Act
RECOMMENDED BOOKS
Name of the Book

Author

Students Ed. Of Polleck & Mulla's Indian Contract Act

All Bara Acts-Contract Act, 1872, Sales of Goods
Constitution of Pakistan, 1973
Pakistan (Audit & Accounts) Order, 1973
The Income Tax Ordinance, 1979
The Income Tax Ordinance 1979 Notes, Circulars, etc
Practical Taxation
Guide Income Tax Law
Income Tax Law with practical Problems

F. D. Mulla
Govt. of Pakistan

- 13 -

Govt. of Pakistan
S. A. Salam
Ikram-ul-Haq
Raza Naqvi
Khawaja Amjad Saeed

NEW SYLLABUS FOR AAO (B-16) EXAMS

SECTION (B)

MARKS - 50

ECONOMICS
AIM:
The object of the course is to equip the candidates with the main economic concepts and
their use and relevance in economic analysis in the context of Pakistan's economy and as an
introduction to the economic environment of accountancy as well as methods of analysis relevant
to the study of financial decisions.
SPECIFICATION GRID
Sr.#
1
2.

SYLLABUS CONTENTS AREA

Principles of economics
Economics of Pakistan

WEIGHTAGE
25
25
Total
50

CONTENTS
1.
Basic concepts; economic system; demand and supply; indifference curve analysis;
consumer preference; conditions of equilibrium of a firm, price mechanism; theory of production
and factors of pricing; difference between competitive and monopolistic conditions; laws of return,
income determination analysis; distribution of national income and productivity theory, general
equilibrium, inflation; and government fiscal and monetary policies.
2.
The main features of Pakistan's economy; fiscal and monetary policy of the Government
of Pakistan; nature of money and banking; international trade and balance of payments with
special reference to Pakistan; economic growth and role of Government therein; main features of
current development plan of Pakistan and trade policy; main features of the economic system of
Islam and distribution of income and wealth in Islam.
RECOMMENDED BOOKS
Name of the Book
Author
Economics
K. K. Dewett
Economics: International Studies Edit Paul A. Samuelson
Introductory Economics, Fourth Edition G.F. Stanlak
Economic: 2nd Edition
David Begg
Introduction to Economics
A. Caimcross
A Text Book of Economics Theory
Stonier and Hague
Behnam's Economics
S.W.Faish
Annual Economics Survey
Ministry of Finance
Eighth Five-year Plan (1993-98) Planning Commission
Trade, Finance and Development Russel and Mohammad
**********************************

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NEW SYLLABUS FOR AAO (B-16) EXAMS

PAPER- 4
BUSINESS MATHEMATICS AND STATISTICS

(THEORY)
Marks.100.

SECTION (A).

Marks. 50

BUSINESS MATHEMATICS
AIM
The course is designed to provide an understanding of elementary knowledge of topics of
mathematics as applied in the decision making of a business. Skill and ability for simple
application is needed.
SPECIFICATION GRID
Sr.#
SYLLABUS CONTENTS AREA
WEIGHTAGE
1.
Section 1
25
2.
Section 2
25
Total
50
CONTENTS
1.
Using mathematics in business; fundamentals of mathematics; numbers, integers decimals
and fractions; sets and notations, revision of elementary algebra including binomial theorem and
partial fractions; mappings; calculus; idea of limits derivative of algebraic, exponential and
logarithmic expressions; snip; difference product and quotient rules of differentiation; chain rule
and composite functions second order derivation with maxima, minima and point of inflection with
application in business; marginal analysis; and binary numbers.
2.
Factorizations; Sequence and series; arithmetic and geometric progression; simple
simultaneous and quadratic equations and graphs; indices and logarithms; ratio and proportions
percentages simple and compound interest; annuities; and discounting and present values.
RECOMMENDED BOOKS
Name of the Book
Business Mathematics
Business mathematics
Mathematics for Business
& Economics
Applied mathematics for Business,
Economics and Social Sciences

Author
L. W. T Stafford
Steen C. Lawlor
M. M. Mirza
Frank. S. Budnick

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NEW SYLLABUS FOR AAO (B-16) EXAMS

SECTION (B)

MARKS. 50

BUSINESS STATISTICS
AIM:
To provide an understanding of elementary knowledge of statistical techniques in so far as
these are relevant to the operation and decision making of a business. Skill and ability for simple
application is needed.
SPECIFICATION GRID
Sr.#
1.
2.
3.

SYLLABUS CONTENTS AREA

WEIGHTAGE
Section 1
25
Section 2
25
Total
50

CONTENTS
1.
Aim and methods of statistics; collection, presentation (including diagrams and graphs)
tabulation and checking data; use of statistics in presentation of reports; measures of central
tendency and dispersion with advantages and disadvantages of various methods; Skew ness and
kurtosis; correlation and regression; index numbers; shifting of base year and simple and weighted
aggregative price indices.
2.
Time series; counting techniques; permutations and combinations, probability; laws of
probability; theoretical distributions, random sampling, sampling, distribution of means;
knowledge of stratified, systematic and cluster sampling; statistical inference, estimation and test
of significance (only z and t-tests are required).

RECOMMENDED BOOKS
BUSINESS STATISTICS
Name of the Book
Author
Statistics
Sher Mohammad Chaudhry
Wheldon's Business Statistics
& Statistical Methods
Thirkettle
Theory and Problems of Statistics Murray R. Spiegal
Statistics, Theory and Practice
M. K. Ghosh and S. C. Choudhry
Statistics
AR. llersic
Statistical Quality Control
E. L. Grant
Modem Business Statistics
Freund and Williams
Business Statistics
Richard and Lacave

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NEW SYLLABUS FOR AAO (B-16) EXAMS

PAPER. 5
PAY, PENSION &TA (THEORY)
Marks.- 100
AIM:
To acquaint candidates with the application of Service & Financial Rules of Government of
Pakistan pertaining to Defence audit branch,
SPECIFICATION GRID
Sr.#
1
2
3

SYLLABUS CONTENTS AREA

WEIGHTAGE
Pay & Allowances
55
Pension Rules
20
TA Rules
25
Total
100

CONTENTS
PAY PENSION AND T.A, RULES
Pay and allowances of commissioned officers, nursing services, civilians, JCO's, warrant
officers and petty officers, other ranks, reservists re-employed, religious and casual personnel,
personnel becoming casualties, leave, emoluments.
Initial allowance, recurring allowances, occasional allowances, fees to examiners, advances
(admissibility), recovery and stoppages) allowances admissible to units, formations and officers.
Pay, leave and pension rules (applicable to PMAD).
Pay accounting rules and procedure, passage rules and regulations, T.A. rules and procedure.
Leave rules, pension rules and procedure
RECOMMENDED BOOKS
Pay and Allowances Regulations (Vol. I and II)
Financial Regulations, Parts I and II (portions relating to pay, leave allowances and pensions)
Pension Regulations Part I, II and III
CSR (Pay, Leave and Pension rules as applicable in PMAD)
Pay Accounting in Fields Service - General Instructions
Passage Regulations, Supplementary Rules (in FR & SR)
Accounts Manual (War), Regulations for PAF, Regulations for PN
Regulations for the Army in Pakistan (Rules)
Regulations for the Army in Pakistan (Instructions), Military Leave Rules
Military Accounts Department Manuals and procedure Code so far as they relate to audit and
account, procedure pertaining to Pay and Pensions.
Relevant Current Orders i.e., AIs (P), PAOs, PNIs, Pak Fos, AFIs, APOs.

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NEW SYLLABUS FOR AAO (B-16) EXAMS

Note-1:- The question in the pay and pensions papers will be set from the three branches of the
subject in the following proportion:i) Pay
(a) Military Officer
(b) Other Ranks
(c) Civilians

55%
20%
20%
15%

ii)
iii)

20%
25%

Pensions
TA

Note-2:In both the theoretical and practical papers, six alternative questions on Pay and
Financial Regulations (Naval), six on Regulations peculiar to Factory Accounts and six on Pay and
Allowances Regulation for the Air Force will be set for the candidates of the Controllers of Naval,
Factory and Air Force Accounts respectively, in lieu of any six questions set for the candidates
serving in other than Naval, Factory and Air Fore Controllers Offices.
************************************

- 18 -

NEW SYLLABUS FOR AAO (B-16) EXAMS

PAPER 6
PAY, PENSION &TA (PRACTICAL)
Marks 100
AIM:
To acquaint candidates with the application of Service & Financial Rules of Government of
Pakistan pertaining to Defence audit branch,
SPECIFICATION GRID
Sr.#
1
2
3

SYLLABUS CONTENTS AREA

WEIGHTAGE
Pay & Allowances
55
Pension Rules
20
T.A. Rules.
25
Total
100

CONTENTS
Pay Pension and T.A, Rules
Pay and allowances of commissioned officers, nursing services, civilians, JCO's, warrant officers
and petty officers, other ranks, reservists re-employed, religious and casual personnel, personnel
becoming casualties, leave, emoluments.
Initial allowance, recurring, allowances, occasional allowances, fees to examiners, advances
(admissibility), recovery and stoppages) allowances admissible to units, formations and officers.
Pay, leave and pension rules (applicable to PMAD).
Pay accounting rules and procedure, passage rules and regulations, T.A. rules and procedure.
Leave rules, pension rules and procedure
RECOMMENDED BOOKS
Pay and Allowances Regulations (Vol. I and II)
Financial Regulations, Parts I and II (portions relating to pay, leave allowances and pensions)
Pension Regulations Part I, II and III
CSR (Pay, Leave and Pension rules as applicable in PMAD)
Pay Accounting in Fields Service - General Instructions
Passage Regulations, Supplementary Rules (in FR & SR)
Accounts Manual (War), Regulations for PAF, Regulations for PN
Regulations for the Army in Pakistan (Rules)
Regulations for the Army in Pakistan (Instructions)
Military Leave Rules
Military Accounts Department Manuals and procedure Code so far as they relate to audit and
account, procedure pertaining to Pay and Pensions.
Relevant Current Orders i.e., AIs (P), PAOs, PNIs, Pak Fos, AFIs, APOs.

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NEW SYLLABUS FOR AAO (B-16) EXAMS

Note-1:- The question in the pay and pensions papers will be set from the three branches of the
subject in the following proportion:i) Pay
55%
(a) Military Officer
20%
(b) Other Ranks
20%
(c) Civilians
15%
ii)
iii)

Pensions
TA

20%
25%

Note-2:In both the theoretical and practical papers, six alternative questions on Pay and
Financial Regulations (Naval), six on Regulations peculiar to Factor Accounts and six on Pay and
Allowances Regulation for the Air Force will be set for the candidates of the Controllers of Naval,
Factory and Air Force Accounts respectively, in lieu of any six questions set for the candidates
serving in other than Naval, Factor and Air Fore Controllers Offices.
*******************************

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NEW SYLLABUS FOR AAO (B-16) EXAMS

PAPER-1
COST ACCOUNTING
Marks -100
AIM:
This course is designed to acquaint students with a comprehensive knowledge of
established practice of cost accumulation methods and learn the application of this knowledge to
the basic planning, control and decision making. The course covers job orders process costing and
standard cost system. It is programmed to equip candidates with fundamentals of accounting for
material, labour and manufacturing expenses; and understanding of the importance of the role of
cost accounting in planning and controlling the wide range of organizational and manufacturing
cost.
SPECIFICATION GRID
Sr.#
1
2
3
4
5
6
7
8
9

SYLLABUS CONTENTS AREA

Cost concepts and costing methods
Accounting for materials
Accounting for labour
Accounting for overhead
Types of costing systems
Cost behavior
Methods of cost estimation
Costing for planning and control
Cost for decision making
Total

WEIGHTAGE
40

30
30
100

CONTENTS
1. Cost concepts and costing methods
Cost concepts, principles, methods and techniques; definitions of and distinction between
financial accounting, cost accounting and management accounting, elements of cost in relation to
manufacturing and service business; cost classification; cost flow, accounting cycle and chart of
accounts; and factory ledger.

2. Accounting for material :Purchasing, receiving, issuing, recording and pricing of material; inventory system and
documentation; and reconciliation and adjustment of inventory differences.
3. Accounting for labour
Wage incentive plans, system and documentation
4. Accounting for overhead
Cost allocation and absorption, including allocation of service department costs
manufacturing expense-applied; manufacturing expenses-actual; and manufacturing expensesdepartmentalized. Over and under applied overheads; Variance Analysis
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NEW SYLLABUS FOR AAO (B-16) EXAMS

5. Types of costing systems

Job order, process and contract systems; and treatment of joint products
and by-products.
6. Cost behavior
Fixed and variable costs; direct and indirect costs, and break even analysis
and charts.
7. Cost estimation
Using high-low method and linear regression analysis.
8. Costing for planning and control
Introduction to budgets (including cash and flexible budgets); the preparation of revenue and cash
budgets; concept of standard costing; and basic variance analysis (i.e. rate, efficiency, volume, mix
and yield variances).
9. Cost and decisions making
Relevant costs; make or buy decisions; decisions with limiting factors excluding linear
programming; marginal vs absorption costing; a stock and profit and loss effect.
RECOMMENDED BOOKS
COST ACCOUNTING
Name of the Book
Author
Cost Accounting
Charles I. Horngren
Cost Accounting
Matz,Curry,Frand& khan
Cost Accounting
W. W. Bigg
Cost Accounting
Blocker & Weltmer
Cost Accounting & Costing Methods H. J. Wheldon
Terminology of Cost Accounting. .
C. M. A, London

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PAPER2
Marks. 100.
AUDITING/GOVERNMENT AUDITING
SECTION. A:
AUDITING

Marks 50.

AIM:
As a first course in auditing, this course is intended to enable candidates to comprehend basic
principles and procedures involved in auditing. A familiarity of auditing techniques such as routine
checking, vouching and verification is necessary to inspire confidence in the approach of work.
Knowledge of auditing standards, INTOSAI & ICAP Codes of Ethics and related statutory
provisions is also expected of candidates.
SPECIFICATION GRID
Sr.# SYLLABUS CONTENTS AREA
WEIGHTAGE
Principles and objectives of auditing
1
Legal and professional
10
2
considerations
Professional ethics
3
Quality control
4
Planning and audit
10
5
Documentation of audit work
6
Accounting systems and internal
7
controls
20
Audit evidence
8
Audit techniques and procedures
9
10 Completion stages of an audit
10
11 The reporting function
Total
50
CONTENTS
1. PRINCIPLES AND OBJECTIVES OF AUDITING
Accounting and auditing concepts; audit objectives, types of audits; true and fair view, materiality,
and going concern.

2. LEGAL AND PROFESSIONAL CONSIDERATIONS

Companies ordinance, 1984; legal status of an auditor; appointment, resignation and removal; and
duties, rights and remuneration. Professional responsibilities, excluding reporting responsibility for
fraud or Irregularity.
3. PROFESSIONAL ETHICS
Professional independence; confidentiality; bye-laws and directives issued by ICAP (relating to
misconduct), INTOSAI Code of Ethics.
4. QUALITY CONTROL
Principles and purposes of quality control.

NEW SYLLABUS FOR AAO (B-16) EXAMS

5. PLANNING AND AUDIT

Factors behind planning; audit plans; simple audit programmes; and impact of internal audit on
planning.
6. RECORDING OF AUDIT WORK
Documentation of work done; evidence of review, conclusions drawn and action taken; and types
of working papers.
7. ACCOUNTING SYSTEM AND INTERNAL CONTROLS
Reasons for having complete and accurate systems controls; definition and classifications of
control; limitations on effectiveness of internal control; ascertaining and recording systems and
controls; evaluation of systems and impact on audit work; timing and scoping of tests of controls;
reliance on internal audit; and small business and internal controls.
8. AUDIT EVIDENCE
Objectives (ascertaining existence, ownership, valuation, completeness (cuts-off); nature and
sources of audit evidence, and sufficiency, relevance and reliability and audit evidence.
9. AUDIT TECHNIQUES AND PROCEDURES
Inspection, observation including inventory verification, enquiry (including third parties
confirmations) and computation; sampling techniques; compliance.

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NEW SYLLABUS FOR AAO (B-16) EXAMS

SECTION. B.
GOVERNMENT AUDITING
Marks - 50.
AIM:
To acquaint candidates with the concept and philosophy of Govt. Auditing, modern trends in Govt.
Auditing and their application in the accountability mechanism.
SPECIFICATION GRID
Sr.#
1.
2.

SYLLABUS CONTENTS AREA

WEIGHTAGE
Concept, Rules & Procedure
20
Modern trends and practices.
30
Total
50

CONTENTS
GENERAL PRINCIPLES OF GOVERNMENT AUDIT
Definitions, Public sector auditing. Objectives of external and internal audit in the public sector.
Concept of external audit, Statutory requirements, Audit mandate in Pakistan, Concepts and
principles of public sector auditing. Regulatory and propriety audit, Audit arrangements in the
public sector, Relationship between external and internal audit, reliance of external audit on the
results of internal audit, Raising and pursuance of audit observations, Audit findings and audit
evidence, Audit reports, uses of audit reports. Public accountability cycle and the role of Public
Accounts Committee, Qualities of a good auditor.
MODERN TRENDS IN AUDITING
Auditing Standards,'INTOSAI Auditing Standards: Basic postulates, General standards, Field
standards. Reporting standards. Concepts and scope of certification audit in the public sector,
Evaluation of internal controls, Materiality and confidence. Audit risk model, Sampling
techniques. Compliance testing, Substantive testing.
PERFORMANCE AUDIT/ PERFORMANCE EVALUATION,
Concepts, methodology, application, developments. Use of Performance indicators in various
sectors.
EDP AUDITING
Computer security, Audit approach, systems audit in a computer environment. Organizational
controls.

RECOMMENDED BOOKS
Name of the Book
Practical Auditing
Principles of Auditing
Principles & Procedures
of Auditing

Author
Spicer and Pegler
F. R. De Paula
Khawaja Amjad Saeed

Statement of Auditing Standards

Mill Champ
Fundamentals of Auditing
R. K. Mautz
Manual of Auditing (Students Edition) V. C. Cooper

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NEW SYLLABUS FOR AAO (B-16) EXAMS

Auditing Today
Government Auditing
The External Audit
A Beginner's Introduction to Auditing
Auditing Integrated Concepts
and Procedures by
INTOSAI Auditing Standard
Elements of Certification Audit by
Elements of Performance Audit by
Constitution of the Islamic Republic of Pakistan
Auditing Principles and Procedures by
Audit Code
Strengthening the Public Service
Accountability A Conceptual Framework
NAO Audit Manual for Certification Audit
Audit Procedure Handbook.

Emile Wolf
Malik Faiz Ahmed
Anderson R. J
Muhammad Akram
Taylor and Glezen
Muhammad Akram Khan
Muhammad Akram Khan
Kh. Amjad Saeed

Samuel Paul

*****************************

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NEW SYLLABUS FOR AAO (B-16) EXAMS

PAPER- 3
Marks. 50.
STORE AND WORKS (MES)
SECTION-1 (Theory)
STORE ACCOUNTING
Marks-25.
AIM:
To acquaint candidates with Accounting of Specialized Branches relating to Defence audit branch
and Defence Accounts branches.
SPECIFICATION GRID
Sr.# SYLLABUS CONTENTS AREA
Store Accounting
1

WEIGHTAGE
25

CONTENTS
STORE ACCOUNTING.
Accounting in supply and store depots/unit and formations, Trading accounts of manufacturing
establishments, Local and central stores purchase and issues, Bills and vouchers. Evaluation and
accounts of stores. Losses and disposal of unserviceable stores. Store verification. Accounting in
ordnance, ammunition, engineering and medical stores depots and military farms.
RECOMMENDED BOOKS.
Military Accounts Code.
Store Accounting Instructions.
Financial Regulations Vols I & II (Chapters relating to Store).
LAOs Hand Book Pt-I & II.
LAOs Hand Book (Air Forces).
A.R (R) Vol-I (Sections pertaining to Stores only).
Military Audit Code.
Factory Accounting Rules.
Accounting Manual (War).
Military Accounts Department Manual & Procedure Code so far as they relate to detailed audit and
account procedure pertaining to stores.
The relevant current orders issued in A.Is (P) PAOs. P.N.Is Pak, F.Os, A.F.Is and A.F.Os and
Government orders etc;
Note:- In both the theoretical and practical papers alternative questions for 15 marks on stores
accounting procedure peculiar to each on Naval Accounts, PAF and on Factory Accounting will be
set for candidates of the Officers of the Controllers of Naval, Air Force and Factory Accounts
respectively in lieu of any question of 15 marks set for the candidates serving in other than Naval,
Air Force and Factory Accounts Offices.

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NEW SYLLABUS FOR AAO (B-16) EXAMS

SECTION-2
WORKS (MES) ACCOUNTS
Marks. 25.
AIM:
To acquaint candidates with Accounting of Specialized Branches relating to Defence audit branch
and Defence Accounts branches.
SPECIFICATION GRID
Sr.#
1

SYLLABUS
CONTENTS AREA
Accounts in MES

WEIGHTA
GE
25

CONTENTS
ACCOUNTING IN MILITARY ENGINEERING SERVICES
Duties of the officers. Sanctions, Tenders and Contract, Financial and construction accounts, Bills
and vouchers. Cash account. Revenues, Stores, Workshop, Completion reports. Contractor's
ledger.
RECOMMENDED BOOKS
M.E.S Regulations.
M.E.S Local Audit Manual.
A.R. Quarters and Rents.
F.R. Parts I & II (so far as portions relating to Financial powers and Stores, (MES) are concerned).
Military Account Code.
M.E.S Unit Accountants Manual.
Military Accounts Department Manuals and Procedure Code so far as they relate to detailed audit
and account procedure pertaining to works.
The relevant current orders issued in A.Is (P) PAOs R.P.N.Is Pak:F.O.s, AF. Is and A.F.Os and
Government orders etc
*************************

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NEW SYLLABUS FOR AAO (B-16) EXAMS

PAPER- 4
Marks: 50.

STORES AND WORKS (MES)

(Practical) with Books
SECTION-1
STORE ACCOUNTING
Marks-25.
AIM:
To acquaint candidates with Accounting of Specialized Branches relating to Defence audit branch
and Defence Accounts branches.
SPECIFICATION GRID
Sr.# SYLLABUS CONTENTS AREA
Store Accounting
1

WEIGHTAGE
25

CONTENTS
STORE ACCOUNTING
Accounting in supply and store depots/unit and formations, Trading accounts of
manufacturing establishments, Local and central stores purchase and issues, Bills and vouchers.
Evaluation and accounts of stores. Losses and disposal of unserviceable stores. Store verification.
Accounting in ordnance, ammunition, engineering and medical stores depots and military farms.
RECOMMENDED BOOKS
Military Accounts Code.
Store Accounting Instructions.
Financial Regulations Vols I & II (Chapters relating to Store).
LAOs Hand Book Pt-I & II.
LAOs Hand Book (Air Forces).
A.R. (R) Vol-I (Sections pertaining to Stores only).
Military Audit Code.
Factory Accounting Rules.
Accounting Manual (War).
Military Accounts Department Manual & Procedure Code so far as they relate to detailed audit and
account procedure pertaining to stores.
The relevant current orders issued in A.Is (P) PAOs. P.N.Is Pak, F.Os, A.F.Is and A.F.Os and
Government orders etc;
Note:- In both the theoretical and practical papers alternative questions for 15 marks on stores
accounting procedure peculiar to each on Naval Accounts PAF and on Factory Accounting will be
set for candidates of the Officers of the Controllers of Naval, Air Force and Factory Accounts
respectively in lieu of any question of 15 marks set for the candidates serving in other than Naval,
Air Force and Factory Accounts Offices.

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NEW SYLLABUS FOR AAO (B-16) EXAMS

SECTION-2
WORKS (MES) ACCOUNTS
Marks. 25.
AIM:
To acquaint candidates with Accounting of Specialized Branches relating to Defence audit branch
and Defence Accounts branches.
SPECIFICATION GRID
Sr.# SYLLABUS CONTENTS AREA
Accounts in MES
1

WEIGHTAGE
25

CONTENTS
ACCOUNTING IN MILITARY ENGINEERING SERVICES
Duties of the officers. Sanctions, Tenders and Contract, Financial and construction accounts, Bills
and vouchers. Cash account. Revenues, Stores, Workshop, Completion reports. Contractor's
ledger.
RECOMMENDED BOOKS
M.E.S Regulations.
M.E.S Local Audit Manual.
A.R. Quarters and Rents.
F.R. Parts I & II (so far as portions relating to Financial powers and Stores, (MES) are concerned).
Military Account Code.
M.E.S Unit Accountants Manual.
Military Accounts Department Manuals and Procedure Code so far as they relate to detailed audit
and account procedure pertaining to works.
The relevant current orders issued in A.Is (P) PAOs R.P.N.Is Pak:F.O.s, AF. Is and A.F.Os and
Government orders etc

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NEW SYLLABUS FOR AAO (B-16) EXAMS

PAPER 5
Marks.100.
INFORMATION TECHNOLOGY (Theory)
AIM:
To familiarize candidates with elements of important and relevant concepts and systems;
management information systems (MIS) and elements of electronic data processing (EDP) with the
knowledge and application of software and system commonly used by accountants.
SPECIFICATION GRID
Sr.#
1
2

SYLLABUS CONTENTS AREA

MIS
E.D.P

WEIGHTAGE
50
50
Total
100

CONTENTS:
MIS
General systems theory, hierarchy of a system and concepts; modular and distributed business
information system; coding; the information systems as a management tool; structures system
analysis, planning; designing, implementation; evaluation and control of information system; and
needs, analysis and types of MIS in operation.
EDP
Developments in electronic data processing; data hierarchy, computer based information
systems; computer hardware and accessories; computer software; evolution of system software;
types of programming languages; with particular reference to business and commercial
applications; software development stages; number system; trends in computer applications with
particular reference to accounting and MIS; data base management system; and basic knowledge
of software like MS-DOS, WINDOW, spreadsheets and word processing.
RECOMMENDED BOOKS
Name of the Book
Computer in Business Studies
Computing
Computers
Management Information Systems,
Conceptual Foundation,
Structure and Development
Computers Today
Management Information Systems
System Analysis and Design
Computer Oriented Business System
Management Information Systems
Managing & Accounting for
Information System

Author
H.Lucas
J.L.Sardinas.
Long and Long
Garden B. Davis

Donald H. Sanders
David Kreonke
Kendall & Kendall
Wayne S. Boutell
R. L. Martino
J.E.Cooks& B.H.Druy

********************************
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NEW SYLLABUS FOR AAO (B-16) EXAMS

PAPER-6

Marks -100

GOVERNMENT ACCOUNTING (THEORY)

AIM:
To give the candidate exposure to concepts, procedures and practices of accounting in the public
sector in general and systems of Government Accounting in various departmentalized accounts in
particular.
SPECIFICATION GRID
Sr.# SYLLABUS CONTENTS AREA
WEIGHTAGE
General concepts, Procedures and Practices
50
1
Systems in departmentalized accounts
50
2
Total
100
CONTENTS.
SECTION-1
Marks50
GENERAL CONCEPTS, PROCEDURES AND PRACTICES
An overview of the Financial Information Systems in the Public Sector; Need for Public Sector
Accounting; Application of GAAP to Public Sector Accounting; Is Public Sector Accounting an
Independent Branch of Accounting? Public Sector Accounting Cycle and the nature of accounting
records. Constitutional framework-functions and powers of Auditor-General in relation to
accounts; Initial Accounts, departmental classified abstract and summaries, detail books, journal
and ledger; Monthly and Annual Financial Statements; Policies and Principles proposed in the
New Accounting Model (NAM); Chart of Classification.
SECTION-2
Marks- 50
GENERAL RULES & PROCEDURES ( DEFENCE ACCOUNTS)
Functions of Defence account officers, general outline of system of account, general principles and
methods of accounts, deposits, advances and loans, transfer entries, recoveries in accounts,
exhibition of losses, inter-departmental transfers, exchange accounts, compilation and
consolidation of accounts, control of expenditure and re-appropriation, miscellaneous provisions.
Procedure of drawal of money, appropriation and budget control.
RECOMMENDED BOOKS
Pakistan (Audit and Accounts) Order, 1973
Introduction to Audit and Accounts
(Chapters 3, 5-C, 6, 9-C, 11, 29, 37 to 39)
Military Account Code. Chapters relating to initial accounts, budget control, drawal and remittance
of moneys
Treasury Rules of Federal Govt.
General Financial Rules
Account Code Vol. I, II (Chapters II. Ill of Section 4), IV
(Chapters 7, 10, 12, 19 & 21).
*************************

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NEW SYLLABUS FOR AAO (B-16) EXAMS

PAPER-7
Marks - 100

GOVERNMENT ACCOUNTING (PRACTICAL) WITH BOOKS

AIM:
To give the candidate skill and experience in the application of concepts, procedures and practices
of accounting in the public sector in general and systems of Government Accounting in various
departmentalized accounts in particular.
SPECIFICATION GRID
Sr.# SYLLABUS CONTENTS AREA
WEIGHTAGE
Application of General concepts,
50
1
Procedures and Practices
Application of Systems in
50
2
departmentalized accounts
Total
100
CONTENTS
SECTION-1
Marks50.
GENERAL CONCEPTS, PROCEDURES AND PRACTICES
Public Sector Accounting Cycle and the nature of accounting records. Constitutional frameworkfunctions and powers of Auditor-General in relation to accounts; Initial Accounts, departmental
abstracts classified abstract and summaries, detail books, journal and ledger; Monthly and Annual
Financial Statements; Policies and Principles proposed in the New Accounting Model (NAM);
Chart of Classification. Nature and extent of Public Sector transactions.
SECTION-2
Marks- 50.
GENERAL RULES & PROCEDURES ( DEFENCE ACCOUNTS)
Functions of Defence account officers, general outline of system of account, general principles and
methods of accounts, deposits, advances and loans, transfer entries, recoveries in accounts,
exhibition of losses, inter-departmental transfers, exchange accounts, compilation and
consolidation of accounts, control of expenditure and re-appropriation, miscellaneous. provisions.
Procedure of drawal of money, appropriation and budget control.
RECOMMENDED BOOKS
Pakistan (Audit and Accounts) Order, 1973
Introduction to Audit and Accounts
(Chapters 3, 5-C, 6, 9-C, 11, 29, 37 to 39)
Military Account Code. Chapters relating to initial accounts, budget control, drawal and remittance
of moneys
Treasury Rules of Federal Govt.
General Financial Rules
Account Code Vol. I, II
(Chapters II. Ill of Section 4), IV (Chapters 7, 10, 12, 19 & 21).
******************************
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NEW SYLLABUS FOR AAO (B-16) EXAMS

*
Appen
Annexure
EXEMPTION SCHEME
Exemption for various subjects / papers of SAS (new syllabus) examination shall be
admissible on the following basis:PAPERS
Business communication & Behavioral Studies
Financial Accounting
Legal Framework of Public Sector Accounting
Economics

Business Mathematics & statistics

Government Accounting (Theory)
Government Accounting (Practical)
Cost Accounting
Information Technology
Public Works Accounts Rules & Procedure (T
& P) / Works and Store (T & P)
Auditing / Government Auditing
S & FR (Theory) / Pay, Pension and TA Rules
(Theory).
S & FR (Practical) / Pay, Pension and TA
Rules (Practical).

BASIS OF EXEMPTION
CA-FE-I, ICMA-II, ICMA-F, SAS (Report
writing or prcis & correspondance)
C.A. Inter-I CA-FE-I, B.Com, M.Com, SAS
(Commercial Accounting)
LLB
M.A (Economics), CA Inter-II, CA-FE-I,
ICMA-I, ICMA-F, MBA, M.Com, B.Com,
SAS (Government Accounting) Theory and
Practical
CA Inter-II, CA-FE-I,ICMA-P-II, ICMA-PEII, MBA
SAS (Government Accounting Theory and
Practical
SAS (Government Accounting- Theory and
Practical
CA Inter-I CA FE-II, ICMA-II ICMA-PE-III,
Company Law / Taxation, SAS (Cost
Accounting
CA-FE-II, ICMA-III, ICMA-PE-II
SAS (Public Works Accounts Rules &
Procedure (T & P) / Works and Store Theory
and Practical.
SAS (Government Auditing)
SAS (S & FR- Theory & Practical) / Pay,
Pension and TA Rules (Theory).
SAS (S & FR- Theory & Practical) / Pay,
Pension and TA Rules (Practical).

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NEW SYLLABUS FOR AAO (B-16) EXAMS

Annexure

1. Serial No.
2. Name of the candidate with Account No. and grade.
3. Date of appointment.
4. Subjects, if any, in which secured exemption in the A.P. Examination (B-16) with roll No.
and year of examination.
5. Total service rendered as worked out on the lines indicated in rule 5.
6. Whether regular in attendance or not.
7. Character energy. Knowledge and intelligence ability to writer and express himself in
correct English.
8. General.
9. Aptitude for work of an Accountant.
10. Prospects of passing.
11. Permanent station at which posted.
12. Center at which proposed to be examined.
13. Educational qualifications.
14. Whether the examination fee of Rs.100/- has been deposited by the candidate.
15. Remarks.

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