INSTITUTE OF CHARTERED ACCOUNTANTS OF PAKISTAN

CERTIFICATE IN ACCOUNTING AND FINANCE (CAF) EXAMINATIONS

EXAMINERS’ COMMENTS

SUBJECT SESSION

Business Law Certificate in Accounting and Finance

– Autumn 2020

Passing %

Question-wise
Overall
1 2 3 4 5 6 7 8 9 10 11
62% 68% 38% 31% 53% 43% 5% 45% 8% 11% 41% 35%

General comments:

Significant improved performance was observed in this session as 35% examinees

were able to secure passing marks compared to 28% and 23% respectively in previous
sessions. The main contributory towards improved performance was introduction of
MCQ’s in which examinees secured good marks. The result could have been improved
further as 8% examinees were just short of 5 or less marks that could have easily
obtained with bit more efforts. The underperformance may be attributed to selective
studies and incorrect implementation of law.

It was observed in majority of the cases that examinees performed well in the questions
which involved rote learning whereas they struggled in the questions which required
application of knowledge; specially question numbers 7 and 9 that proved to be
challenging to the examinees. It is pertinent to mention here that according to new
policy, business law paper consists of 30 marks for MCQs, 42 marks assigned for such
questions where examinees have to apply theoretical knowledge to scenario-based
questions and 28 marks assigned to straight forward theoretical knowledge based
questions. Examinees are advised to keep these ratios in perspective while studying for
exams.

Question-wise common mistakes observed

Question 1

 Performance in (ii, v, viii, xi, xiii, xvi, xxii, xxv) and (xxvii) was below average.
 Many examinees answered by writing the entire wordings of the correct choice
instead of mentioning the correct option number, hence lost precious time.

Question 2

 Examinees did not mention that the Ordinance has the same force and effect as an
Act of the Parliament.
 Examinees also did not mention the requirement related to money bill and in case
of all other bills.

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 Examiners’ Comments on Business Law Autumn 2020

Question 3(a)

Good performance was observed in this part of the question.

Question 3(b)

Many examinees were not aware of 1) the rights available to KC if the supply of
material was not made within the stipulated time; and 2) the requirement to claim
compensation if decided not to accept the performance.

Question 3(c)

Examinees were not able to identify the possibility of claiming penalty by KC that
depends upon ST’s awareness of the same at the time of entering in the contract.

Question 4(a)

 Some examinees mentioned essentials of a valid contract instead of valid

acceptance.
 Some of the examinees instead of writing, “it cannot be in the form of a negative
confirmation” just listed down “negative confirmation”.

Question 4(b)

 Many examinees did not mention that communication of the proposal would be
completed when it came to the knowledge of the person to whom it is made.
 Although most of the examinees answered correctly, they did not provide the
reason due to which the bodyguard was not entitled to the award i.e. about the
absence of a valid communication of the proposal and its acceptance.
 Some of the examinees treated this as a case of finder of lost goods.

Question 4(c)

Examinees were not able to answer that a single promisor would not be successful in
recovering the money from the co-borrower unless it is made jointly with all the
promisees to the contract.

Question 5(a)

Good performance was observed in this part of the question.

Question 5(b)

Many examinees did not mention that 1) Laila may give a Public Notice instead of
giving notice to existing partners of the firm; 2) Laila will become partner if she fails to
give notice till expiry of six months and 3) Laila would be personally liable from the
date she was admitted to the benefit of partnership i.e. 26 March 2019 instead from
“giving notice” or “attaining the age of majority”.

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 Examiners’ Comments on Business Law Autumn 2020

Question 6(a)

 Majority of the examinees incorrectly mentioned the effects that “it restricts further
negotiability” and “further transferability of the instrument”.
 Many examinees did not mention that “not negotiable” means, the title of the
transferee of such a cheque cannot be better than that of its transferor.

Question 6(b)

Most of the examinees correctly drafted “Promissory note”.

Question 7

 Majority of the examinees were not able to identify the deficiencies in the proposed
name and reproduced the complete section related to prohibition of certain names
that was not required. Examinees should understand that in “application based
questions” it is expected that the examinees will give the reply with reference to
given situation.
 Many examinees focused only that a ‘not for profit’ organization with due
permission from the Commission can get exemption to use the word ‘Limited’ and
then reproduced the law relevant to this point only.
 Only few examinees had mentioned that the word “Authority” cannot be used as it
implies connection with a government.
 Many examinees incorrectly mentioned that the approval is to be obtained from the
“Registrar” instead of “Commission”.

Question 8(a)

Good performance was observed in this part of the question.

Question 8(b)

Good performance was observed in this part of the question. However, most of the
examinees did not cover that multiple offer should be made within prescribed time and
subject to prescribed conditions.

Question 9(a)

Very few examinees mentioned that DFL, being a public unlisted company, has option
to get the shareholders’ approval by passing resolution by circulation.

Question 9(b)

 Majority of the examinees were unable to write the steps involved in holding
extraordinary general meeting except the requirement of service of 21 days’ notice
and that a shorter notice may be served in case of an emergency.
 Since examinees did not discuss the approval by passing resolution by circulation
in (a) above, they failed to cover its requirement in this part.

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 Examiners’ Comments on Business Law Autumn 2020

Question 10

 Examinees were unaware of the requirement which had to be fulfilled for a person
to be appointed as a non-executive director.
 Regarding unforeseen liability, the references to law e.g. acts of omission or
commission done with his knowledge, through board process, with his consent, etc.
were missing in the answers.

Question 11(a)

 Many examinees did not mention that if a company is a wholly owned subsidiary
means it has one shareholder, whereas the law requires that a private company must
have at least two members; hence it is imperative to hold shares in the name of a
nominee.
 Many examinees did not specify that qualification shares could be held jointly in
the name of the investor company and its non-executive director or alone in the
name of nominee.

Question 11(b)

 Some of the examinees also mentioned that hard copies need to be submitted,
instead of filing it electronically.
 Examinees did not mention about extension of filing period with the permission of
the Commission.

(THE END)

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