Commerce & Accountancy Optional Syllabus

Here is the official UPSC Commerce & Accountancy Optional syllabus for Paper I and Paper II, arranged paper by paper and unit by unit. Under each unit we give the official text first, then break it into numbered topics, so you can track your preparation and match every previous year question to its topic.

Source. UPSC Civil Services Examination 2026 notification (Examination Notice No. 05/2026-CSE, dated 04.02.2026, revised file of 06.02.2026, pp. 58–61), upsc.gov.in. The Commerce and Accountancy syllabus has been unchanged in recent years.

Scheme. Two papers of 250 marks each (total 500), 3 hours each. Each paper has two sections (A and B) of four questions each; Questions 1 and 5 are compulsory, and three more are attempted with at least one from each section. Paper I (Accounting and Finance) has two parts – Accounting, Taxation & Auditing, and Financial Management, Financial Institutions and Markets. Paper II has two parts – Organisation Theory and Behaviour, and Human Resources Management and Industrial Relations.

Syllabus at a glance

Paper	Unit	Topics
Paper I	1. Financial Accounting	5
Paper I	2. Cost Accounting	7
Paper I	3. Taxation	5
Paper I	4. Auditing	2
Paper I	5. Financial Management	8
Paper I	6. Financial Markets and Institutions	6
Paper II	1. Organisation Theory	8
Paper II	2. Organisation Behaviour	7
Paper II	3. Human Resources Management (HRM)	7
Paper II	4. Industrial Relations (IR)	7

Paper I

Accounting and Finance: Accounting, Taxation & Auditing

1. Financial Accounting

1.1 Accounting as a financial information system; impact of behavioural sciences

• Accounting as a financial information system
• Impact of behavioural sciences

1.2 Accounting Standards

• Depreciation
• Inventories
• Research and development costs
• Long-term construction contracts
• Revenue recognition
• Fixed assets
• Contingencies
• Foreign exchange transactions
• Investments
• Government grants
• Cash flow statement
• Earnings per share

1.3 Accounting for share capital transactions

• Bonus shares
• Right shares
• Employees stock option
• Buy-back of securities

1.4 Preparation and presentation of company final accounts

1.5 Amalgamation, absorption and reconstruction of companies

• Amalgamation
• Absorption
• Reconstruction

2. Cost Accounting

2.1 Nature of cost accounting and cost concepts

• Nature and functions of cost accounting
• Installation of cost accounting system
• Cost concepts for income measurement, profit planning, cost control and decision making

2.2 Methods of costing

• Job costing
• Process costing
• Activity based costing

2.3 Cost-volume-profit relationship

2.4 Incremental analysis / differential costing

• Pricing decisions
• Product decisions
• Make or buy decisions
• Shut-down decisions

2.5 Budgeting as a tool of planning and control

• Cost control and cost reduction
• Budgeting

2.6 Standard costing and variance analysis

2.7 Responsibility accounting and divisional performance measurement

3. Taxation

3.1 Income tax: definitions, basis of charge and exempt incomes

• Definitions
• Basis of charge
• Incomes which do not form part of total income

3.2 Computation of income under various heads (individuals)

• 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

3.3 Set-off and carry forward of loss

3.4 Deductions from gross total income

3.5 VAT and service tax

4. Auditing

4.1 Company audit

• Divisible profits
• Dividends
• Special investigations
• Tax audit

4.2 Audit of banking, insurance and non-profit organisations

• Banks
• Insurance
• Non-profit organisations and charitable societies/trusts

Accounting and Finance: Financial Management, Financial Institutions and Markets

5. Financial Management

5.1 Finance function

• Nature, scope and objectives of financial management
• Risk and return relationship

5.2 Tools of financial analysis

• Ratio analysis
• Funds-flow statement
• Cash-flow statement

5.3 Capital budgeting decisions

• Process, procedures and appraisal methods
• Risk and uncertainty analysis

5.4 Cost of capital

• Specific costs
• Weighted average cost of capital
• CAPM

5.5 Financing decisions: capital structure

• NI, NOI, MM and traditional approaches
• Leverages: operating, financial, combined
• EBIT-EPS analysis

5.6 Dividend decisions and valuation of firm

• Walter’s model
• MM thesis
• Gordon’s model
• Lintner’s model
• Factors affecting dividend policy

5.7 Working capital management

• Planning and determinants of working capital
• Cash management
• Inventory management
• Receivables management

5.8 Corporate restructuring: mergers and acquisitions

6. Financial Markets and Institutions

6.1 Indian financial system: an overview

6.2 Money markets

• Participants
• Structure
• Instruments

6.3 Commercial banks and reforms in banking sector

• Commercial banks
• Banking sector reforms

6.4 RBI: monetary and credit policy; RBI as a regulator

• Monetary and credit policy of RBI
• RBI as a regulator

6.5 Capital market and SEBI

• Primary and secondary market
• Financial market instruments and innovative debt instruments
• SEBI as a regulator

6.6 Financial services

• Mutual funds
• Venture capital
• Credit rating agencies
• Insurance and IRDA

Paper II

Organisation Theory and Behaviour

1. Organisation Theory

1.1 Nature and concept of organisation, environment and goals

• Nature and concept of organisation
• External environment: technological, social, political, economic and legal
• Organisational goals: primary and secondary, single and multiple
• Management by objectives

1.2 Evolution of organisation theory

• Classical
• Neo-classical
• Systems approach

1.3 Modern concepts of organisation theory

• Organisational design
• Organisational structure
• Organisational culture

1.4 Organisational design

• Basic challenges
• Differentiation and integration
• Centralization and decentralization
• Standardization/formalization and mutual adjustment
• Coordinating formal and informal organizations
• Mechanistic and organic structures

1.5 Designing organizational structures

• Authority and control
• Line and staff functions
• Specialization and coordination
• Types of structure: functional, matrix, project

1.6 Power and politics

• Nature and basis of power
• Sources of power
• Power structure and politics

1.7 Impact of information technology on organizational design and structure

1.8 Managing organizational culture

2. Organisation Behaviour

2.1 Individual in organization: personality and perception

• Meaning and concept of organisation behaviour
• Personality: theories and determinants
• Perception: meaning and process

2.2 Motivation

• Concepts
• Theories
• Applications

2.3 Leadership

• Theories
• Styles

2.4 Quality of work life and quality circles

• QWL: meaning, impact on performance, ways of enhancement
• Quality circles

2.5 Management of conflicts in organizations

2.6 Transactional analysis

2.7 Organizational effectiveness and management of change

• Organizational effectiveness
• Management of change

Human Resources Management and Industrial Relations

3. Human Resources Management (HRM)

3.1 Meaning, nature and scope of HRM; human resource planning

• Meaning, nature and scope of HRM
• Human resource planning

3.2 Job analysis, job description and job specification

3.3 Recruitment, selection, orientation and placement

• Recruitment process
• Selection process
• Orientation and placement

3.4 Training and development process

3.5 Performance appraisal and 360° feedback

3.6 Salary and wage administration; job evaluation

• Salary and wage administration
• Job evaluation

3.7 Employee welfare, promotions, transfers and separations

• Employee welfare
• Promotions
• Transfers
• Separations

4. Industrial Relations (IR)

4.1 Meaning, nature, importance and scope of industrial relations

4.2 Trade unions

• Formation of trade union
• Trade union legislation
• Trade union movement in India
• Recognition of trade unions
• Problems of trade unions in India
• Impact of liberalization on trade union movement

4.3 Industrial disputes

• Strikes and lockouts
• Causes of disputes
• Prevention and settlement of disputes
• Adjudication and collective bargaining

4.4 Workers’ participation in management

• Philosophy
• Rationale
• Present day status and future prospects

4.5 Industrial relations in public enterprises

4.6 Absenteeism and labour turnover

• Causes
• Remedies

4.7 ILO and its functions

Total: 62 numbered topics across 10 units.

Last updated: 30 October 2026