CA Final Costing Is Now SET B: Syllabus and Test

Under ICAI's New Scheme of Education and Training, CA Final no longer has a costing paper. Strategic cost management is now SET B: Strategic Cost & Performance Management, a compulsory 100-mark Self-Paced Online Module that you must qualify with at least 50% marks before you can sit the Final exam (ICAI FAQs on the New Scheme, Q 4.3, Q 4.5, Q 7.2 and Q 7.7). Its topics are also tested in Final Paper 6, the Integrated Business Solutions case study (ICAI Final syllabus).

Where costing sits in the CA course now

Cost and management accounting is still part of the CA course, but it is tested at three points:

Stage	Where it is tested	How
CA Intermediate	Paper 4: Cost and Management Accounting (100 marks), Group II	Written exam with 30% case-based MCQs and 70% descriptive questions (FAQ, Q 3.13 and Q 3.16)
After you register for CA Final	SET B: Strategic Cost & Performance Management (100 marks)	Online module test of case-scenario MCQs; 50% to qualify (ICAI prospectus; FAQ, Q 7.7)
CA Final exam	Paper 6: Integrated Business Solutions (100 marks), Group II	Open-book case study that combines Final Papers 1 to 5 with SET A, SET B and Strategic Management (FAQ, Q 4.8; ICAI prospectus)

None of the six Final exam papers is a costing paper (FAQ, Q 4.3). Our guide to CA Final subjects under the new scheme lists all six papers and the other three modules; this article covers SET B only.

What SET B covers

ICAI expects expert knowledge in SET B, the same level as SET A (Corporate and Economic Laws), while sets C and D need only working knowledge (FAQ, Q 7.6). Its closest match in the old syllabus is Final Paper 5, Strategic Cost Management and Performance Evaluation (SCMPE); ICAI's transition rules for students of that paper are in the last section.

Objectives

ICAI's syllabus gives SET B two objectives:

to apply cost management techniques for planning and controlling performance, so as to set, monitor and control strategic objectives; and
to develop skills of analysis, synthesis and evaluation in cost management, to deal with the issues that affect how performance is managed in organisations.

Three parts

The syllabus has three parts: Part A, Strategic Cost Management; Part B, Strategic Performance Management; and Part C, Case Study. ICAI's study material turns them into 14 chapters in two modules, listed below.

Chapter-by-chapter syllabus

Part	Chapter	Main topics in ICAI's syllabus
A	1. An Introduction to Strategic Cost Management	Traditional vs strategic cost management; value proposition and Osterwalder's Business Model Canvas; industry profitability and key success factors; IT, Porter's Five Forces and the value chain; the management accountant as a leader
A	2. Modern Business Environment	Cost of quality and Total Quality Management; supply chain management; gain-sharing arrangements; downsizing, outsourcing and offshoring
A	3. Lean System and Innovation	Just-in-Time, Kaizen costing, 5S, Total Productive Maintenance, cellular manufacturing, Six Sigma; process innovation
A	4. Specialist Cost Management Techniques	Cost control and cost reduction; target costing; throughput accounting and theory of constraints; life cycle costing; environment management accounting
A	5. Management of Cost Strategically for Emerging Business Models	Digital technologies, business ecosystems, disruption and lean start-ups; hyper-disruptive business models and models for sustainability and emerging national markets; strategic responses
A	6. Strategic Revenue Management	CVP analysis and relevant costs; pricing of new products and services, sensitivity analysis, pricing in special circumstances; pricing strategies and Kano's performance attributes
A	7. Strategic Profit Management	Operating profit analysis; activity-based profitability analysis, activity-based management and activity-based budgeting; Pareto analysis
B	8. An Introduction to Strategic Performance Management	Performance management and strategy; value chain and McKinsey's 7S; structure, culture and behavioural aspects; predicting and preventing corporate failure
B	9. Strategic Performance Measures in Private Sector	Critical success factors and KPIs; ROCE, ROI, EPS, RI, NPV, EVA; Balanced Scorecard, Performance Pyramid, Building Block Model, Triple Bottom Line
B	10. Strategic Performance Measures in Not-for-Profit Organisations	Measuring outputs; value for money; adapted Balanced Scorecard
B	11. Preparation of Performance Reports	Preparing performance reports
B	12. Divisional Transfer Pricing	Principles and methods; behavioural consequences of divisional structures; international transfer pricing
B	13. Standard Costing	Advanced variances; standard costing with marginal costing; profit reconciliation; variance investigation and interpretation; behavioural aspects and limitations
C	14. Case Study	Case studies covering the concepts of Parts A and B

Sources: ICAI's Self-Paced Online Modules syllabus (2023) and its SET B study material page.

What you need from Intermediate

The syllabus says SET B builds on the Cost and Management Accounting and Strategic Management exams (Intermediate Paper 4 and Section B of Intermediate Paper 6), and expects you to relate them to strategic and operational issues. It also requires basic applications of two quantitative techniques: linear programming, and the learning or experience curve.

How the SET B test works

When: you register for the modules when you register for the Final course, with no separate fee, and can then study them at your own pace (FAQ, Q 7.1 and Q 7.3).
Before the test: you must complete the minimum learning hours ICAI prescribes for the module (FAQ, Q 7.5). You then book a test slot on ICAI's Self-paced Module Test portal, spmt.icai.org (ICAI requirements notice for the November 2026 Final exams, July 2026).
Format: ICAI's prospectus says the assessment is online, by case-scenario based multiple choice questions for SET A and SET B. ICAI's SET B Model Test Paper runs for 3 hours, carries 100 marks and is made up of case scenarios with compulsory 2-mark MCQs. (The syllabus describes Part C as a combination of MCQs and extended-response questions, so follow the prospectus and the model test paper for the test format.)
Passing: at least 50% marks, with no limit on attempts and no negative marking. Module marks are not added to your Final exam marks (FAQ, Q 7.7 to Q 7.9).
Deadline: all four modules must be qualified before you can appear in the Final exam (FAQ, Q 4.5). ICAI's "requirements for applying" notice for each Final exam gives the last date, so check the current one.

Study material and practice papers

ICAI publishes these resources for SET B:

Study material: the 14 chapters as PDFs, in English and Hindi. Printed copies of the SET A and SET B material can be ordered through ICAI's CDS portal after you register for the Final course (FAQ, Q 4.4 and Q 7.5).
Video lectures: ICAI says video lectures for SET A and SET B are available (FAQ, Q 7.5), through its Digital Learning Hub (prospectus).
Booklet on Case Scenarios: an MCQ practice book from ICAI's Board of Studies (January 2025 edition, for the May 2025 exam onwards). It includes questions with more than one correct answer, "most likely" or "most appropriate" questions, and "NOT" questions.
Model Test Paper: a full question paper with answers and reasons.
Old Paper 5 papers: ICAI's suggested answers for the old Strategic Cost Management and Performance Evaluation paper, December 2021 to November 2023, are on its old suggested answers page. They were written for the old syllabus, so check each question's topic against the SET B syllabus before you use it.

For the exam papers themselves, our guide to CA Final Paper 2, Advanced Financial Management is a good next read. If you are studying for CMA rather than CA, cost management is a full exam paper there (Final Paper 16, Strategic Cost Management); see CMA Final costing.

If you studied SCMPE under the old syllabus

ICAI's requirements notice for the November 2026 Final exams (July 2026) says who still needs SET B:

Admitted to the Final exam up to November 2023: you are exempt from SET C and SET D, and must qualify the following before applying for membership. Passed neither group: SET A and SET B. Passed Group II only: SET A only. Passed Group I only: SET B only. Passed neither group but secured an exemption, in any attempt from May 2022 to November 2023, in old Paper 5: SET A only; in old Paper 4: SET B only; in both: no modules.
Admitted to the May 2024 exam (and not covered above): you must qualify SET A and SET B before applying for membership.
Admitted from November 2024 onwards: you must qualify SET A, B, C and/or D, as applicable, before the exam.

Other transition cases, such as students who passed Intermediate under the old scheme or under the unit scheme, are listed in ICAI's requirements notice for each exam (for November 2026, section D, items (d) and (e)). Check the current notice before you apply.

CA Final Costing Under the New Scheme: What SET B Covers and How It Is Tested

Key points

Where costing sits in the CA course now