WEST BENGAL COUNCIL OF HIGHER SECONDARY EDUCATION

SYLLABUS FOR CLASSES XI AND XII

SUBJECT:COMMERCIAL LAW AND
PRELIMINARIES OF AUDITING (CLPA)

Course Overview:
This course introduces the student to the legal framework of business, and endeavours to induce them to appreciate
the relevance of business law to individuals and businesses and to understand the applications of these laws to
practical commercial situations. It intends to assist the students to gain knowledge of the branches of law which
relate to contracts, negotiable instruments, the law of sales; study legal matters pertaining to partnerships and
companies; identify the fundamental legal principles behind insurance agreements and examine the scope, exchange
and regulation of electronic communication.

This course also aims at introducing the students to the field of auditing, by providing them a basic understanding of
fundamental auditing concepts, the general procedures required in conducting an audit and audit reporting. While
the focus is mainly on the practical application of an external financial audit that is regulated under legal legislation,
the course also explores the wider audit framework; including a critical appreciation of contemporary issues and
developments in the field of auditing.

The course provides a foundation for students who intend pursuing a specialised pathway in the legal profession, as
well as those who will pursue careers in accounting and auditing.

Course Objectives:
This course strives to –
 Inculcate a sense of justice and integrity as well as develop skills among students to pursue higher education,
and thereafter, work independently or in employment
 Develop students with an understanding of the legal system prevalent in India
 Assist students to identify various sources of law and the requirements to hold various rights under the
prevalent laws of land
 Acquaint students with the dynamic nature and inter-dependent aspects of business and the judiciary
 Aid students to develop an interest in the theory and practice of law and auditing
 Help students to understand contractual obligations and consequences thereto
 Familiarize students with legal requirements of the process of managing the operations of different forms of
business and maintenance of their financial records
 Enable students to analyse the impact of the electronic era on information and ethical issues thereon
 Make students conversant with the use and regulation of negotiable instruments in business
 Enable students to develop an understanding of the management of business risks through insurance
 Enable students to evaluate audit compliant documents, and consequences of default, if any
 Help students to achieve an understanding of the conduct of audit procedures suiting various requirements
of a business
  Assist students to appreciate the legal and economic significance of business activities and the ramifications
of non-compliance
 Enable students to act more responsibly and judiciously in every sphere of the society

Learning Hours (Total – 200 per year per subject):

 180 hours allocated over the syllabus, to be distributed over each sub-topic –
SEM I – 100 hours
SEM II – 80 hours
 20 hours for home assignments/remedial and/or tutorial classes
 CLASS - XI
SEMESTER – I
SUBJECT: COMMERCIAL LAW ANDPRELIMINARIES OF AUDITING (CLPA)

Unit Details Marks

Unit 1 Introduction to Law 04

Unit 2 Law of Contract 16

Unit 3 Introduction to Auditing 10

Unit 4 Errors and Frauds 05

Unit 5 Different Types of Audits – I 05

Total 40

Question Paper Typology

Sl. No. Typology of Questions Marks %

1. Remembering and Understanding (Simple) 12 30
2. Applying (Average) 20 50
3. Analysing, Evaluating and Critical thinking 08 20
Total 40 100

Weightage to Questions

Marks Question Marks per No. of Total

Unit Details
Allotted Type Question Questions Marks

Unit 1 Introduction to Law 04 MCQ 1 4 04

Unit 2 Law of Contract 16 MCQ 1 16 16
Unit 3 Introduction to Auditing 10 MCQ 1 10 10
Unit 4 Errors and Frauds 05 MCQ 1 5 05
Unit 5 Different Types of Audits – I 05 MCQ 1 5 05
Total 40 40
 CLASS - XI
SEMESTER – I
SUBJECT: COMMERCIAL LAW ANDPRELIMINARIES OF AUDITING (CLPA)
FULL MARKS: 40 CONTACT HOURS: 100 Hours
COURSE CODE:THEORY
PART – A (Commercial Law)

CONTACT
UNIT No. TOPICS MARKS
HOURS

Unit – 1 Definition of Law – Features of Law – Rule of Law – 04 Hours 4 Marks

INTRODUCTION Meaning of Commercial Law – Sources of Indian
TO LAW Commercial Law

a) Meaning and Definition of Agreement and Contract 46 Hours 16 Marks

– Essential elements of a contract
b) Offer and Acceptance: Meaning and definition of
offer, offerer, offeree, promise, promisor, promise;
Rules regarding offer – Meaning and definition of
acceptance; Rules regarding acceptance – Methods
of communication of offer and acceptance –
Revocation of offer and acceptance
c) Consideration: Meaning and definition of
consideration – Types of consideration – Rules
regarding consideration – “No consideration, no
contract”, Exceptions to the rule – Rights and
liabilities of a stranger to a contract
d) Void and Voidable Agreements: Void agreement –
Unit – 2 Voidable agreement – Unenforceable agreement –
Illegal agreement – Distinction between Void
LAW OF agreement and Illegal agreement – Valid contract
CONTRACT
e) Capacity of Parties: Definition of ‘capacity’ –
Minority and law regarding Minor’s Agreement –
Persons of unsound mind; Effects of agreement
made by persons of unsound mind – Disqualified
persons
f) Free Consent: Definition of free consent – Coercion –
Undue influence – Misrepresentation – Fraud –
Distinction between Fraud and Misrepresentation –
Contracts of Uberrimae fidei – Mistake – Unilateral
mistake – Distinction between Mistake and
Misrepresentation – Mistake and Consent
g) Legality of Object and Consideration: Unlawful
object and consideration – Agreements against
public policy – Void agreements – Objects or
Consideration unlawful in part
 TOTAL (A) 50 Hours 20

PART – B (Preliminaries of Auditing)

TOPIC SUB TOPIC CONTACT HOURS MARKS

Definition of Auditing – Evolution of Auditing – Nature 34 Hours 10 Marks

of Auditing – Objectives of Auditing: Primary and
Unit – 3 Secondary – Importance of Auditing – Advantages and
INTRODUCTION Limitations of Auditing – Relation and Distinction
TO AUDITING between Accounting and Auditing – An Auditor is not
an Accountant – Qualifications of Auditor: Professional
and General – Disqualifications.

Unit – 4 Errors in Accounting: Types of errors; Detection of 08 Hours 5 Marks

errors by Auditor – Fraud: Misappropriation and
ERRORS AND Manipulation; Detection of frauds by Auditor – Duties
FRAUDS of Auditor in relation of errors and frauds.

Unit – 5 On the Basis of Time: Continuous Audit; Periodical 08 Hours 5 Marks

DIFFERENT Audit; Interim Audit – Advantages and limitations of
TYPES OF each type – Distinction between Continuous Audit and
AUDITS – I Periodical Audit.

TOTAL (B) 50 Hours 20

GRAND TOTAL (A+B) 100 40

 CLASS - XI
\ SEMESTER – II
SUBJECT: COMMERCIAL LAW ANDPRELIMINARIES OF AUDITING (CLPA)

Unit Details Marks

Unit 1 Sale of Goods Act 15
Unit 2 Cyber Law 05
Unit 3 Different Types of Audits – II 10
Unit 4 Internal Control System 10
Total 40

Question Paper Typology

Sl. No. Typology of Questions Marks %

1. Remembering and Understanding (Simple) 12 30
2. Applying (Average) 20 50
3. Analysing, Evaluating and Critical thinking 08 20
Total 40 100

Weightage to Questions

Question Marks per No. of Total

Unit Details Marks Allotted
Type Question Questions Marks

SAQ 2 1
Unit 1 Sale of Goods Act 15 SAQ 3 1 15
Descriptive 5 2
SAQ 2 1
Unit 2 Cyber Law 05 05
SAQ 3 1
SAQ 2 1
Unit 3 Different Types of Audits – II 10 SAQ 3 1 10
Descriptive 5 1
SAQ 2 1
Unit 4 Internal Control System 10 SAQ 3 1 10
Descriptive 5 1
Total 40 40
 CLASS - XI
SEMESTER – II
SUBJECT: COMMERCIAL LAW ANDPRELIMINARIES OF AUDITING (CLPA)
FULL MARKS: 40 CONTACT HOURS: 80 Hours
COURSE CODE:THEORY
PART – A (Commercial Law)

UNIT No. TOPICS CONTACT HOURS MARKS

a) Definitions: Buyer, Seller and Goods – Classification of 30 Hours 15 Marks

Goods (existing, future, contingent, ascertained,
unascertained) – Sale and Agreement to Sell –
Difference between Sale and Agreement to Sell –
Essential elements of a contract of sale – Destruction
of goods – Hire-purchase agreements – Sale and
other contracts
Unit – 1
b) Conditions and Warranties: Definitions – Implied
SALE OF Conditions – Doctrine of Caveat Emptor – Implied
GOODS ACT Warranties – Circumstances where condition to be
treated as warranty – Liabilities of the seller apart
from the contract of sale
c) Transfer of Ownership: When does property pass
from the seller to the buyer? – Reservation of the
right of Disposal – Transfer of ownership – Transfer of
title by non-owner

a) Introduction: What is Cyber Law? – Need for Cyber 10 Hours 5 Marks

Law – History of Cyber Law in India
b) Meaning and Definitions: Electronic transactions, E-
commerce, E-banking, Electronic Signature, Hacking,
Phishing, Malware, Cookies, Spam and Firewall.
Unit – 2
c) Scope of Cyber Law – Online contracts, E-commerce
CYBER LAW regulation, Consumer rights – Identity/data/funds
theft, Fraud, Forgery, Hacking
d) Cyber safety and security – Meaning and steps
e) Information Technology Act 2000 – an overview, with
emphasis to Section 66A
 PART – B (Preliminaries of Auditing)

UNIT No. TOPICS CONTACT HOURS MARKS

a) On the Basis of Law: Statutory Audit; Non-statutory 20 Hours 10 Marks

Audit; Government Audit – Advantages and
Unit – 3 limitations of each type – Distinction between
Statutory Audit and Non-statutory Audit
DIFFERENT
b) On the Basis of Scope of Work: Complete Audit,
TYPES OF
Partial Audit; Internal Audit – Advantages and
AUDITS – II limitations of each type – Distinction between
Internal Audit and Interim Audit – Difference between
Statutory Audit and Internal Audit

Internal Control System: Definition, Features, Advantages 20 Hours 10 Marks

and Limitations – Internal Checking System: Definition,
Unit – 4 Objectives, Advantages and Limitations – Duties of an
Auditor in respect of Internal Check – Distinction between
INTERNAL Internal Control System and Internal Check System –
CONTROL Relevance of Internal Control System in Auditing –
SYSTEM Difference between Internal Check and Internal Audit –
Internal Check regarding certain transactions: Cash
Receipts; Cash Payments

TOTAL (B) 40 Hours 20

GRAND TOTAL (A+B) 80 40

 CLASS - XI
PROJECT WORK
FULL MARKS – 20
Sub Topic:

Imagine yourself a buyer. Write a report of the steps you should follow in case of breach of conditions in a
1
contract of sale of goods.
2 Visit a bank and draft a report on the measures to protect against online banking fraud
A firm has reported misappropriation of goods by employees. Prepare a report on your duties as an auditor
3
regarding such misappropriation.
4 Visit big shopping mall and prepare a report on its internal control/ internal checking system.
Visit an audit firm and write a report on the benefits of and the limitations faced by an auditor in conducting a
5
Statutory Audit.

Overview:
The course in Commercial Law and Preliminaries of Auditing has been introduced at the Senior Secondary level of
schools, to provide students with a sound understanding of the legal framework prevalent in the commercial world,
as well as the intricacies of guidelines that govern them. Commercial operations are acts carried out by a business
and are governed by a set of principles and regulations. Such principles and regulations cover a business's actual
existence and structure as well as its operations and interactions. With a view to help the students to have a better
understanding of the activities of business and what governs them, financially, legally and socially, Project Work has
been introduced in the curriculum. The projects have been designed to allow students to appreciate that business is
an integral component of society and help them develop an understanding of the economic, legal and ethical issues
concerning them.

Objectives:
After doing the Project Work, the students will be able to do the following:
1. develop a practical approach by using modern technologies in the business world;
2. collection, processing, analysing and synthesizing of relevant information as well as inculcating important
skills of problem solving, time management, to derive meaningful conclusions
3. get involved in the process of research work; demonstrate their capabilities while working independently
and
4. make project work an enriching learning experience.

General Guidelines:
Students are supposed to select any one of the topics given and are required to make only ONE project from the
selected topic (carrying 20 marks).
The following steps might be followed:
1. Students must take any ONE topic during the academic session of Class XI, from the topics given.
2. The topic should be assigned after discussion with the students in the class and should then be discussed at
every stage of submission of the draft/final project work.
3. Students should be facilitated in terms of being provided with relevant materials or suggesting websites, or
obtaining required permissions from business houses, etc. for the purpose of their project.
4. The teacher should play the role of a facilitator and should closely supervise the process of project completion,
and MUST ensure that the students actually go through the rigors and enjoy the process of doing the project
rather than depending on any readymade material available commercially.
5. At the end of the stipulated term, each student will prepare and submit their project report in the prescribed
format, to be evaluated, signed and preserved by the teacher.
 CLASS - XII
SEMESTER – III
SUBJECT: COMMERCIAL LAW ANDPRELIMINARIES OF AUDITING (CLPA)

Unit Details Marks

Unit 1 Law of Partnership 10

Unit 2 Company Law 10

Unit 3 Audit Procedure 14

Unit 4 Routine Checking and Test Checking 06

Total 40

Question Paper Typology

Sl. No. Typology of Questions Marks %

1. Remembering and Understanding (Simple) 12 30

2. Applying (Average) 20 50

3. Analysing, Evaluating and Critical thinking 08 20

Total 40 100

Weightage to Questions

Marks Question Marks per No. of Total

Unit Details
Allotted Type Question Questions Marks

Unit 1 Law of Partnership 10 MCQ 1 10 10

Unit 2 Company Law 10 MCQ 1 10 10

Unit 3 Audit Procedure 14 MCQ 1 14 14

Routine Checking and Test

Unit 4 06 MCQ 1 6 06
Checking

Total 40 40
 CLASS - XII
SEMESTER – III
SUBJECT: COMMERCIAL LAW ANDPRELIMINARIES OF AUDITING (CLPA)
FULL MARKS: 40 CONTACT HOURS: 100 Hours
COURSE CODE: THEORY
PART – A (Commercial Law)

CONTACT
UNIT No TOPICS MARKS
HOURS

a) Definitions: Partnership, Partner, Firm – Essential 24 Hours 10 Marks

elements of a Partnership – Mutual Agency – Who can
be a partner? – Legal status of partnership firms –
Classification of Partnership and Partners – Partnership
Deed
Unit – 1
b) Registration of Partnership Firms: The formalities of
LAW OF Registration – Consequences of non-registration
PARTNERSHIP c) Rights and Liabilities of Partners: Mutual rights and
duties u/s 12, 13 – Authority of a partner; Expressed
and Implied Authority; Limitations of Implied Authority,
Alteration of Authority; Authority in an emergency –
Liability of Partners to outsiders – Rights and Duties of
Partners – Position of a Minor in a partnership firm

a) Introduction: Definition of Company – Body Corporate – 26 Hours 10 Marks

Essential Features of Company – Types of Companies:
Chartered Company; Statutory Company; Registered
Company; Private Company; Public Company;
Government Company; Holding Company; Subsidiary
Company; Foreign Company – Difference between
Private Company and Public Company – Conversion of
Private Company into Public Company and vice versa
b) Incorporation of a Company: Formation –
Unit – 2 Memorandum and Articles of Association – Distinction
COMPANY between Memorandum and Articles – Incorporation of
Company – Effect of Registration – Commencement of
LAW
Business – Alteration of Memorandum and Articles
c) Prospectus: Public offer and Private placement –
Definition of Prospectus – Matters to be stated in
Prospectus – Shelf Prospectus – Red-herring Prospectus
– Mis-statements in Prospectus
d) Accounts of Companies: Books of Accounts – Financial
Statements – Periodical Financial Statements – Internal
Audit – Auditor: Appointment – Eligibility – Auditor’s
Report

TOTAL (A) 50 Hours 20

 PART – B (Preliminaries of Auditing)

UNIT No TOPICS CONTACT HOURS MARKS

a) Preparatory steps before commencement of a new 40 Hours 14

Audit
b) Preparation by the Auditor: Audit Planning – Audit
Unit – 3 Programme: Definition; Objectives; Features;
Advantages and Limitations – Audit Notebook:
AUDIT
Definition; Contents and Advantages – Audit
PROCEDURE
Working Papers: Definition; Contents; Ownership;
Protection and Preservation – Audit File:
Definition; Types and their Contents – Audit
Memorandum: Definition; General Contents

a) Routine Checking: Definition – Scope – Objectives – 10 Hours 6

Unit – 4 Advantages – Limitations

ROUTINE b) Test Checking: Definition – Factors to be

considered before Test Checking – Advantages –
CHECKING AND
Limitations – Difference between Routine Checking
TEST CHECKING and Test Checking – Transactions not suitable for
Test Checking

TOTAL (B) 50 Hours 20

GRAND TOTAL (A+B) 100 40

 CLASS - XII
SEMESTER – IV
SUBJECT: COMMERCIAL LAW ANDPRELIMINARIES OF AUDITING(CLPA)

Unit Details Marks

Unit 1 Negotiable Instruments 14
Unit 2 Law of Insurance 06
Unit 3 Vouching 10
Unit 4 New Branches of Auditing 10
Total 40

Question Paper Typology

Sl. No. Typology of Questions Marks %

1. Remembering and Understanding (Simple) 12 30
2. Applying (Average) 20 50
3. Analysing, Evaluating and Critical thinking 08 20
Total 40 100

Weightage to Questions

Marks Question Marks per No. of Total

Unit Details
Allotted Type Question Questions Marks

SAQ 2 2
Unit 1 Negotiable Instruments 14 14
Descriptive 5 2
Unit 2 Law of Insurance 06 SAQ 3 2 06
SAQ 2 1
Unit 3 Vouching 10 SAQ 3 1 10
Descriptive 5 1
SAQ 2 1
Unit 4 New Branches of Auditing 10 SAQ 3 1 10
Descriptive 5 1
Total 40 40
 CLASS - XII
SEMESTER – IV
SUBJECT: COMMERCIAL LAW ANDPRELIMINARIES OF AUDITING (CLPA)
FULL MARKS: 40 CONTACT HOURS: 80 Hours
COURSE CODE: THEORY

PART – A (Commercial Law)

UNIT No. TOPICS CONTACT HOURS MARKS

a) Introduction: Concept of Negotiable Instruments – 28 Hours 14

Essential features of Negotiable Instruments –
Types of Negotiable Instruments – Promissory
Note: Definition and Essential elements – Bill of
Exchange: Definition; Essential elements and Types
– Cheque: Definition; Features and Types –
Difference between Promissory Note and Bill of
Unit – 1 Exchange – Difference between Bill of Exchange
and Cheque – Meaning of Holder and Holder in
NEGOTIABLE Due Course – Rights of a Holder in Due Course
INSTRUMENTS
b) Acceptance, Negotiation, Endorsement: Meaning
of Acceptance; Types; When acceptance is not
necessary; Time and Place of presentment for
Acceptance – Meaning of Negotiation; Negotiation
by Delivery; Negotiation by Endorsement; Who can
negotiate – Meaning and Definition of
Endorsement; Effects; Types; Rules regarding
Endorsement

a) Introduction: Advantages and the Object of 12 Hours 6

Insurance – Contact of Insurance: Essential
Elements – Types of Insurance – Meaning of the
terms: Insurer; Insured; Insurance Policy; Risk;
Premium; Cover Note – Duties and Rights of Policy
Holders – Double Insurance and Reinsurance –
Unit – 2 Distinction between Double Insurance and
Reinsurance
LAW OF
INSURANCE b) Life Insurance: Definition; Features; Types –
Meaning of Surrender Value; Nomination –
Difference between Life Insurance and General
Insurance – Effect of Suicide
c) General Insurance: Marine Insurance – Definition;
Features; Types – Fire Insurance – Definition;
Features; Types

TOTAL (A) 40 Hours 20

 PART – B (Preliminaries of Auditing)

UNIT No. TOPICS CONTACT HOURS MARKS

Vouching: Definition; Features; Objectives; Importance; 20 Hours 10
Factors to be considered in Vouching – Voucher:
Unit – 3 Definition; Classification; Features – Comparison
between Routine Checking and Vouching – Vouching of
VOUCHING Specific Transactions: Cash Purchases; Cash Sales; Cash
Payments; Cash Collections; Loans taken from
outsiders

a) Cost Audit: Definition – Objectives – Advantages – 20 Hours 10

Limitations
b) Management Audit: Definition – Objectives –
Unit – 4 Advantages – Limitations
c) Performance Audit: Definition – Objectives –
NEW Advantages – Limitations
BRANCHES OF d) Social Audit: Definition – Objectives – Advantages –
AUDITING Limitations
e) Tax Audit: Definition – Objectives – Who are
mandatorily subject to Tax Audit? (Section 44AB of
IT Act, in accordance with the latest govt.
regulations)
TOTAL (B) 40 Hours 20

GRAND TOTAL (A+B) 80 40

CLASS - XII
PROJECT WORK
FULL MARKS – 20

Sub Topic:
Imagine you and two friends are forming a partnership firm. Draw up a Partnership Deed clearly specifying the
1
relevant matters to be included therein.
Visit the registered office of a company, and inspect the Articles of Association of the company. Prepare a
2
report on the provisions regarding Accounts of the company as mentioned in the Articles.
With the help of your teacher, draw up a bill of exchange/ promissory note, and write up a report on the
3
salient features of the same, and its significance in business.
Imagine you have asked to audit a small company. Prepare a report on the steps you would follow before you
4
conduct the audit procedure.
5 Visit a trader and examine the process of vouching of cash sales, and prepare a report on the same.

General Guidelines:
Students are supposed to select any one of the topics given, and are required to make only ONE project from the
selected topic (carrying 20 marks).

The following steps might be followed:

1. Students must take any ONE topic during the academic session of Class XII, from the topics given.
2. The topic should be assigned after discussion with the students in the class and should then be discussed at
every stage of the project work.
3. The teacher should play the role of a facilitator and should closely supervise the process of project completion.
The teachers must ensure that the project work assigned to the students whether individually or in group are
discussed at different stages right from assignment to drafts review and finalization.
Students should be facilitated in terms of providing relevant materials or suggesting websites, or obtaining
required permissions from business houses, malls etc. for their project.
4. The periods assigned to the Project Work should be suitably spaced throughout the academic session. The
teachers MUST ensure that the student actually, goes through the rigors and enjoys the process of doing the
project rather than depending on any readymade material available outside.
5. At the end of the stipulated term, each student will prepare and submit their project report in the prescribed
format, to be evaluated, signed and preserved by the teacher, for final submission to the WBCHSE.