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Professional Course

Certified Investment and Financial Analysts (CIFA)


Certified Investment and Financial Analysts (CIFA) is a 3 years Professional Course examined by KASNEB.

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About Certified Investment and Financial Analysts (CIFA)

Certified Investment and Financial Analysts are experts in financial analysis, investments and securities, portfolio management, pensions management, investment banking among other related areas.

The Certified Investment and Financial Analysts (CIFA) examination are held twice yearly in June and December. The examination is divided into three (3) parts of two (2) sections each where each section consists of three (3) subjects. A candidate may attempt one (1) section or two (2) consecutive sections in the examinations. Candidates are not allowed to enter for a higher section before completing a lower one. Prior to applying for registration as a student of the Board, the applicant is advised to carefully assess his/her interest in the profession and ability to study, take and pass the examination within a reasonable time.

Progression Rule

  • A candidate must attempt and pass the CIFA Part I examination before proceeding to the CIFA Part II examination.
  • A candidate must attempt and pass the CIFA Part II examination before proceeding to the CIFA Part III examination.
  • A candidate will not be allowed to enter a higher section in a part before completing the lower section unless the candidate has been referred in the higher section or has entered the two sections simultaneously.

Entry requirements for Certified Investment and Financial Analysts (CIFA)

A person seeking to be registered as a student for the CIFA examination must show evidence of being a holder of one of the following qualifications

  • Secondary education (O level) certificate with an aggregate average of at least grade C+ (or equivalent) provided the applicant has obtained a minimum of grade C+ (or equivalent) in both English and Mathematics.
  • Advanced education (A level) certificate with at least two principal passes provided that the applicant has credits in Mathematics and English at secondary education level
  • kasneb technician or professional examination certificate.
  • A degree from a recognised University.
  • Such other certificates or diplomas as may be approved by the Board of kasneb

Persons intending to take the November/December examinations must register as students not later than the 15 September while those intending to take the May/June examinations must register as students not later than 15 March.

kasneb reserves the right to refuse to register any applicant who in its opinion is not fit and proper to be registered as a student. Similarly, kasneb reserves the right to cancel the registration of any student who in its opinion is not fit and proper to be a student

Exemptions may, on application, be granted to registered students who are holders of certain degrees and diplomas recognised by kasneb. Exemptions will be granted on a paper by paper basis.

Institutions offering Certified Investment and Financial Analysts (CIFA)


Eldoret Technical Training Institute

Private College Soy

Eldoret Technical Training Institute (ETTI) is a modern and dynamic educational institution with strong traditions in both higher and vocational education. (ETTI), prepares students for successful careers, responsible...

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Thika College of Excellence

Private College Thika Town

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Mwangaza College

Private College Nakuru Town East

Mwangaza College is administered under the Diocese of Nakuru by the De La Salle Christian Brothers (a worldwide educational religious Congregation with a 300-year tradition). The goal of...

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Traction School of Governance & Business

Private College Likoni

Traction School of Governance and Business was established in the year 2017 as a college providing online and class-based training in governance and business. This was to create...

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Superior College of Accountancy

Private College Soy

Superior College Of Accountancy is a new accountancy institution in Eldoret town founded on the principles of professionalism, competency, and success.At Superior college of Accountancy we believe that...

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Adept College of Professional Studies

Private College Nakuru Town East

Adept College of Professional Studies was established in the year 2014 in Nakuru County to meet the increasing demand for tertiary education.The college has a team of dedicated...

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The Nyeri National Polytechnic

National Polytechnic Nyeri Town

The Nyeri National Polytechnic was a middle-level national Technical Learning Institute established under the Ministry of Science and Technology offering a variety of courses to K.C.S.E graduates at...

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High Seas Training Institute

Private College Embakasi East

High Seas Training Institute of business and Technology is a mid level training institution offering programmes in Business, Inforamtion Technology, Fashion and Design, Motor vehicle mechanics and many...

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Royal Business School

Private College Likoni

Royal Business School is an institution founded on Christian values in January 2009. The school was established by a team of diverse forward-thinking professionals with vast experience and...

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Century Park College

Private College Machakos Town

Century Park College is home to students from across Kenya. We embrace diversity by promoting and maintaining an inclusive and supportive work and study environment that enables all...

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The Eldoret National Polytechnic

National Polytechnic Soy

The Eldoret National Polytechnic has recorded tremendous growth in the development of middle-level training as an institution since inception. It has continually fulfilled its mandate in training young...

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Aims College of Business and Technology

Private College Starehe

Aims College of Business and Technology (ACBT) is a centre of excellence in Business Management and Technology. It is accredited by TVETA and is an approved KNEC Centre...

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Objectives of Certified Investment and Financial Analysts (CIFA)

The Certified Investment and Financial Analysts (CIFA) examination is intended for those persons who wish to qualify and work as professional managers, financial analysts and consultants on investment and securities, pension funds, stockbroking, investment and securities, pension funds, stockbroking, investment banking and other specialised fields in finance.

The aims of CIFA Examination include to:

  • Produce a finance professional with in-depth knowledge and expertise in analysis of investments and securities, portfolio management, fund management, investment banking, international finance and related areas.
  • Impart professional values and ethics, communication skills, creativity, innovation and ability to generate new ideas.

Aims of CIFA Part I Examination

  • To equip the candidate with knowledge and skills to, among other areas:
  • Apply statistical tools in finance.
  • Communicate effectively in a business environment.
  • Prepare and interpret financial statements.
  • Apply the principles of public finance and taxation in practice.
  • Provide a basis for further progression to CIFA Part II.

Aims of CIFA Part II Examination

  • To equip the candidate with knowledge and skills to, among other areas:
  • Appraise and recommend various investments.
  • Analyse financial statements.
  • Ensure compliance with regulations governing financial markets.
  • Manage non-complex portfolios.
  • Provide a basis for further progression to CIFA Part III.

Aims of CIFA Part III Examination

  • To equip the candidate with knowledge and skills to, among other areas:
  • Analyse complex investments including derivatives and alternative investments.
  • Manage investments in the international financial market.
  • Predict future market trends with reasonable accuracy.
  • Practice the principles of governance and ethics.
  • Ensure the professional is competent to be registered as a Certified
  • Investment and Financial Analyst (CIFA) with high regard to professional values and ethics. 

Certified Investment and Financial Analysts (CIFA) - Programme



Paper No.

  • CI11. Financial Accounting
  • CI12. Financial Mathematics
  • CI13. Entrepreneurship and Communication


  • CI21. Economics
  • C122. Financial Institutions and Markets
  • CI23. Public Finance and Taxation



  • CI31. Regulation of Financial Markets
  • CI32. Corporate Finance
  • CI33. Financial Statements Analysis


  • CI41. Equity Investments Analysis
  • CI42. Portfolio Management
  • CI43. Quantitative Analysis



  • CI51. Strategy Governance and Ethics
  • CI52. Fixed Income Investment Analysis
  • CI53. Alternative Investments Analysis


  • CI61. Advanced Portfolio Management
  • CI62. International Finance
  • CI63. Derivative Analysis



This paper is intended to equip the candidate with knowledge, skills and attitudes that will enable him/her to prepare financial statements for different entities.


  • A candidate who passes this paper should be able to:
  • Prepare books of original entry and basic ledger accounts under double entry system
  • Prepare basic financial statements of sole traders, partnerships, companies, manufacturing entities and not for profit organisations
  • Comply with the regulatory framework in the accounting field
  • Account for assets and liabilities
  • Analyse financial statements by use of ratios and statement of cash flows.


1.1 Introduction to accounting

  • The nature and purpose of accounting
  • Objectives of accounting
  • Users of accounting information and their respective needs
  • The accounting equation
  • Regulatory framework of accounting (regulatory bodies such as ICPAK, IFAC, IASB, IPSASB, IAESB)
  • Accounting standards (IASs/IFRSs) (importance and limitations)
  • Professional ethics
  • Accounting concepts/principles
  • Qualities of useful accounting information

1.2 Recording transactions

  • Source documents: quotations, purchase orders, statement of account, remittance advice, receipts, petty cash vouchers, sales and purchase invoice, credit notes and debit notes, bank statements
  • Books of original entry: sales journal, purchases journal, returns inwards journal, returns outward journal, cash book, petty cash book and general journal
  • Double entry and the ledger; use of Taccounts and double entry aspects (debit and credit), sales ledger and purchases ledger
  • The trial balance
  • Computerised accounting systems role of computers, application and accounting softwares in the accounting process, benefits and challenges of operating computerised accounting systems

1.3 Accounting for assets and liabilities

1.3.1 Assets

  • Property, plant and equipment – recognition, capital and revenue expenditure, measurement (depreciation and revaluation), disposal and disclosures, property, plant and equipment schedule
  • Intangible assets – recognition, measurement (amortisation, impairment and revaluation), disposals and disclosures
  • Financial assets – examples and risks only
  • Inventory – recognition, measurement and valuation using specific cost method, FIFO and weighted average cost only
  • Trade receivables – bad debts and allowance for doubtful debts and receivables control accounts
  • Accrued income and prepaid expenses
  • Cash at bank – cash book and bank reconciliation statement
  • Cash in hand – cash book and petty cash books

1.3.2 Liabilities

  • Bank overdraft – cash book and bank reconciliation statement
  • Trade payables – control accounts
  • Loans – accounting treatment of repayment of principal and interest
  • Prepaid incomes and accrued expenses

1.4 Correction of errors and suspense account

1.5 Financial statements of a sole trader

  • Income statement
  • Statement of financial position

1.6 Financial statements of a partnership

  • Partnership agreement
  • Introduction to partnership accounts
  • Distinction between current and fixed capital
  • Income statement
  • Statement of financial position
  • Changes in partnership – admission of a new partner, retirement, death and change in profit sharing ratio

1.7 Financial statements of a company

  • Types of share capital – ordinary shares and preference shares
  • Issue of shares (exclude issue by instalment and forfeiture)
  • Types of reserves – share premium, revaluation reserve, general reserves and retained profits
  • Income tax accounting treatment and presentation (exclude computation)
  • Financial statements – income statement and statement of financial position
  • Published financial statements (describe a complete set of published financial statements but not preparation)

1.8 Financial statements of a manufacturing entity

  • Features of a manufacturing entity
  • Classification and apportioning costs between manufacturing, selling and administration
  • Financial statements – manufacturing account, income statement and statement of financial position

1.9 Accounts from incomplete records

  • Features
  • Types of incomplete records(pure single entry, simple single entry, quasi single  entry)
  • Ascertainment of profit by capital comparison
  • Preparation of statement of affairs and profit determination
  • Techniques of obtaining complete accounting information

1.10 Financial statements of a not for profit organisation

  • Distinction between not for profit making organisation and profit making organisation
  • Nature of receipts and payments account
  • Accounting treatment of some special items
  • Income and expenditure account
  • Statement of financial position

1.11 Analysing financial statements

  • Statement of cash flows (categories of cash, methods of preparing statement of cash flows and the importance)
  • Financial ratios – definition, categories, analysis and interpretation, application and limitations

1.12 Introduction to Public Sector Accounting

  • Features of public sector entities (as compared to private sector)
  • Structure of the public sector (National and county governments, state corporations and other agencies)
  • Regulatory structures and oversight [IPSASB, PSASB (establishment, mandate and functions), Director of Accounting Services, National Treasury, Parliamentary Committees, Accounting Officers at national and county levels]
  • Objectives of public sector financial statements
  • Objectives of IPSAS
  • Accounting techniques in public sector (budgeting, cash, accrual, commitment and fund) (Preparation of financial statements excluded)

1.13 Emerging issues and trends



This paper is intended to equip the candidate with knowledge, skills and attitudes that will enable him/her to apply financial mathematics in decision making.


  • A candidate who passes this paper should be able to:
  • Compute present and future values of cash flows
  • Apply financial forecasting techniques in business
  • Apply mathematical functions in finance
  • Apply statistical tools in finance
  • Use of probability to solve business problems
  • Compute and interpret index numbers
  • Use of financial calculators to solve financial problems.


2.1 Introduction to financial mathematics

  • Nature and scope of finance; financing, investment, management of working capital and profit sharing (dividend policy) decisions
  • Relationship between finance and other disciplines; finance and economics, finance and accounting, finance and mathematics
  • Purpose of financial modeling

2.2 Financial algebra

  • Simultaneous and quadratic equations
  • Developing finance functions
  • Interactive graphs; graphing financial functions
  • Overview of calculator operations: Turning on and off the calculator, selecting second functions, setting calculator formulae, clearing calculator memory, mathematical operations, memory operations, using worksheets

2.3 Time value of money and interest rate mathematics

  • Concept of interest rates and inflation
  • Simple interest
  • Compound interest
  • Continuously compounded interest
  • Present values
  • Basics of capital budgeting
  • Loan amortisation
  • Time value of money and amortisation worksheets, entering variables in amortisation worksheets, entering cash inflows and outflows, generating amortisation schedules
  • Cash flow worksheets; calculator worksheet variables for both even and uneven and grouped cash flow, entering, deleting, inserting and computing results
  • Bond worksheets: Bond worksheets variables and terminology, entering bond data and computing results
  • Depreciation worksheets; depreciation worksheet variables, entering data and computing results
  • Other worksheets: Percentage change/compound interest worksheets, interest conversion worksheets, profit margin worksheets, break-even worksheets, memory worksheets

2.4 Financial forecasting

  • Need for financial forecasting
  • Techniques of forecasting: statistical and non-statistical methods
  • Time-series components and analysis
  • Share valuation
  • Fixed income models for bonds and construction of yield curves
  • Regression and correlation
  • Use of financial calculators in regression and correlation models, entering data, computing the results and interpretation

2.5 Financial calculus

  • Introduction to calculus
  • Differentiation; ordinary and partial derivatives
  • Integration
  • Application of calculus to solve financial problems relating to maximisation of returns and minimisation of costs

2.6 Descriptive statistics

  • Measures of central tendency; mean, mode, median
  • Measures of relative standing; quartiles, deciles, percentiles
  • Measures of dispersion; range, mean deviation, variance, standard deviation, coefficient of variation
  • Statistical worksheets; statistical worksheet variables, computing statistical results and interpretation

2.7 Probability theory

  • Relevance of probability theory
  • Events and probabilities
  • Probability rules
  • Random variables and probability distributions
  • Binomial random variables
  • Expected value
  • Variance and standard deviation
  • Probability density function
  • Normal probability distribution
  • Stochastic functions
  • Application of probability to solve business problems

2.8 Index numbers

  • Purpose of index numbers
  • Construction of index numbers
  • Simple index numbers; fixed base method and chain base method
  • Weighted index numbers; Laspeyre’s, Paasche’s, Fisher’s ideal and MarshallEdgeworth’s methods
  • Consumer Price Index (CPI)
  • Use of Consumer Index Price (CPI); inflation, cost of living
  • Limitations of index numbers

2.9 Emerging issues and trends



This paper intends to equip the candidate with knowledge, skills and attitudes that will enable him/her to apply entrepreneurship knowledge in business and other environments.


  • A candidate who passes this paper should be able to:
  • Identify viable business opportunities
  • Prepare a business plan
  • Demonstrate entrepreneurial orientation skills
  • Communicate effectively in a business environment
  • Apply entrepreneurial knowledge in response to the emerging business trends.


3.1 Entrepreneurial mindset

  • Definition of entrepreneurship
  • Historical development of entrepreneurship
  • Characteristics of entrepreneurs
  • Types of entrepreneurs
  • Distinction between entrepreneurs and small business owners
  • Approaches to entrepreneurship
  • Importance of entrepreneurs to development

3.2 Entrepreneurship and innovation

  • Creativity and innovation
  • Corporate entrepreneurship and innovation
  • Qualities of entrepreneurial firms
  • Social enterprises and sustainability
  • Entrepreneurial ethics, responsibility and leadership
  • Case study on corporate entrepreneurship

3.3 Opportunity identification and development

  • Methods of generating ideas
  • Sources of innovative ideas
  • Qualities of viable business opportunities
  • Evaluating business opportunities
  • Challenges of starting new ventures
  • Why new ventures fail
  • Business incubation
  • Role of government in promoting entrepreneurship

3.4 Creating and starting a new venture

  • Approaches to creating new ventures
  • Acquiring an established business venture
  • Business planning
  • Overview of the business plan
  • Scope and value of a business plan
  • Practical experience in writing of a business plan

3.5 Business growth strategies

  • Penetration, market and product development strategy
  • Public and private placements
  • Joint ventures
  • Diversification
  • Loans and equity financing
  • Venture capitalists
  • Informal risk capitalists
  • Crowd funding and crowding sourcing

3.6 Entrepreneurship and technology

  • Internet and e-commerce
  • The enterprise website
  • Impact of globalisation
  • Global entrepreneurs
  • Business process outsourcing
  • Electronic and mobile money transfers
  • Business networking

3.7 Nature of business communication

  • Meaning of communication
  • Purposes of business communication
  • Internal and external communication
  • The communication process
  • Methods of communication
  • Communication systems and networks
  • Principles of effective communication
  • Barriers to effective communication

3.8 Written communication

  • Rules of effective writing
  • Business correspondence
  • Reports
  • Memorandum
  • Proposal writing
  • Forms and questionnaire design
  • Circulars and newsletters
  • Notices and advertisements
  • Publicity materials
  • Press releases
  • Graphic communication

3.9 Oral and non-verbal communication

  • Oral communication in business
  • Effective listening
  • Interviews
  • Non-verbal communication
  • Interpersonal relationships
  • Presentations skills

3.10 Meetings

  • Notice
  • Agenda
  • Role of the chairperson
  • Role of the secretary
  • Role of participants
  • Conduct of meetings
  • Minutes of meetings

3.11 Information technology and communication

  • The internet
  • Teleconferencing
  • Wireless technologies
  • Electronic postal services
  • Use of E-mails

3.12 Ethics and integrity in business communication

  • Concept of ethics and integrity
  • Significance of ethical communication
  • Factors influencing ethical communication
  • Ethical dilemmas in communication
  • Guidelines to handle communication ethics dilemmas
  • Business ethics in communication

3.13 Emerging issues and trends





This paper is intended to equip the candidate with knowledge, skills and attitudes that will enable him/her to apply the fundamental principles of economics in decision making.


A candidate who passes this paper should be able to:

  • Apply basic mathematical and graphical techniques to analyse economic relationships and interpret the results
  • Apply the knowledge of economics in decision making
  • Analyse economic problems and suggest possible policy related recommendations
  • Apply knowledge of economics in international trade and finance
  • Apply economic principles in the development and implementation of policies in agriculture and industry


4.1 Microeconomics

4.1.1 Introduction to economics

  • Definition of economics
  • Basic economic concepts: economic resources, human wants, scarcity and choice, opportunity cost, production possibility curves/frontiers
  • Scope of economics: Micro and macro economics
  • Methodology of economics: positive and normative economics, scientific methods, economics as a social science.
  • Economic systems: free market economy, mixed economy, consumers’ sovereignty.

4.1.2 Demand, supply and determination of equilibrium Demand analysis

  • Definition
  • Individual demand versus market demand
  • Factors influencing demand
  • Exceptional demand curves
  • Types of demand
  • Movement along and shifts of demand curves
  • Elasticity of demand
  • Types of elasticity: price, income and cross elasticity
  • Measurement of elasticity; point and arc elasticity
  • Factors influencing elasticity of demand
  • Application of elasticity of demand in management and economic policy decision making Supply analysis

  • Definition
  • Individual versus market supply
  • Factors influencing supply
  • Movements along and shifts of supply curves
  • Definition of elasticity of supply
  • Price elasticity of supply
  • Factors influencing elasticity of supply
  • Application of elasticity of supply in management and economic policy decision making Determination of equilibrium

  • Interaction of supply and demand, equilibrium price and quantity
  • Mathematical approach to equilibrium analysis
  • Stable versus unstable equilibrium
  • Effects of shifts in demand and supply on market equilibrium
  • Price controls
  • Reasons for price fluctuations in agriculture

4.1.3 The theory of consumer behaviour

  • Approaches to the theory of the consumercardinal versus ordinal approach
  • Utility analysis, marginal utility (MU), law of diminishing marginal utility (DMU)
  • Limitations of cardinal approach
  • Indifference curve analysis; Indifference curve and budget line
  • Consumer equilibrium; effects of changes in prices and incomes on consumer equilibrium
  • Derivation of a demand curve
  • Applications of indifference curve analysis: substitution effect and income effect for a normal good, inferior good and a giffen good; derivation of the Engels curve
  • Consumer surplus/Marshallian surplus

4.1.4 The theory of a firm The theory of production

  • Factors of production
  • Mobility of factors of production
  • Short run analysis
  • Total product, average and marginal products
  • Stages in production and the law of variable proportions/the law of diminishing returns
  • Long run analysis
  • Isoquant and isocost lines
  • The concept of producer equilibrium and firm’s expansion curve
  • Law of returns to scale
  • Demand and supply of factors of production
  • Wage determination theories
  • Trade unions: functions and challenges
  • Producer surplus/economic rent/Marshallian surplus The theory of costs

  • Short run costs analysis and size of the firm’s total cost, fixed cost, average cost, variable costs and marginal cost
  • Long run costs analysis
  • Optimal size of a firm
  • Economies and diseconomies of scale

4.1.5 Market structures

  • Definition of a market
  • Necessary and sufficient conditions for profit maximisation
  • Mathematical approach to profit maximisation
  • Output, prices and efficiency of: perfect competition, monopoly, monopolistic competition, oligopolistic competition

4.2 Macroeconomics

4.2.1 National income

  • Definition of national income
  • Circular flow of income
  • Methods/approaches to measuring national income
  • Concepts of national income: gross domestic product (GDP), gross national product (GNP) and net national product (NNP), net national income (NNI) at market price and factor cost, disposable income
  • Difficulties in measuring national income
  • Uses of income statistics
  • Analysis of consumption, saving and investment and their interaction in a simple economic model
  • Determination of equilibrium national income
  • Inflationary and deflationary gaps
  • The multiplier and accelerator concepts
  • Business cycles/cyclical fluctuations

4.2.2 Economic growth, economic development and economic planning

  • The differences between economic growth and economic development
  • Actual and potential growth
  • The benefits and costs of economic growth
  • Determinants of economic development
  • Common characteristics of developing countries
  • Role of agriculture and industry in economic development
  • Obstacles to economic development
  • The need for development planning
  • Short term, medium term and long term planning tools
  • Challenges to economic planning in developing countries

4.2.3 Money and banking Money

  • The nature and functions of money
  • Demand and supply of money
  • Theories of demand for money: The quantity theory, the Keynesian liquidity preference theory The banking system

  • Definition of commercial banks
  • The role of commercial banks and non-banking financial institutions in the economy
  • Credit creation
  • Definition of central bank
  • The role of the central bank; traditional and changing role in a liberalised economy, such as financial sector reform, exchange rate reform
  • Monetary policy, definition, objectives, instruments and limitations
  • Determination of interest rates and their effects on the level of investment, output, inflation and employment
  • Harmonisation of fiscal and monetary policies
  • Simple IS–LM Model
  • Partial equilibrium and general equilibrium

4.2.4 Inflation and unemployment Inflation

  • Definition and types of inflation
  • Causes of inflation: cost push and demand pull
  • Effects of inflation
  • Measures to control inflation Unemployment

  • Definition of unemployment
  • Types and causes of unemployment
  • Control measures of unemployment
  • Relationship between unemployment and inflation: the Phillips curve

4.2.5 International trade and finance

  • Definition of International trade
  • Theory of absolute advantage and comparative advantage
  • World trade organization (WTO) and concerns of developing countries
  • Protection in international trade
  • Regional integration organizations, commodity agreements and the relevance to less developed countries (LDCs)
  • Terms of trade, balance of trade, balance of payments (causes and methods of correcting deficits in balance of payments), exchange rates, types of foreign exchange regimes, factors influencing exchange rates, foreign exchange reserves
  • International financial institutions: International Monetary Fund (IMF) and World Bank
  • National debt management: causes and interventions
  • Structural Adjustment Programmes (SAPs) and their impacts on the LDCs

4.3 Emerging issues and trends



This paper is intended to equip the candidate with the knowledge, skills and attitudes that will enable him/her to make investment decisions based on the analysis of financial markets.


  • On successful completion of this paper, the candidate should be able to:
  • Identify financial intermediaries available for investment
  • Calculate security market indices
  • Comply with financial market regulations
  • Trade financial securities in the financial markets
  • Understand the roles and functions of Unclaimed Financial Assets Authority and Financial Reporting Center.


5.1 Market organisation and structure

  • Functions of financial systems
  • Classifications of assets and markets
  • Structure of financial markets
  • Major types, subtype and characteristics of securities traded in organised markets: currencies, contracts, commodities and real assets
  • Flow of funds and financial systems
  • Characteristics of a well-functioning financial system
  • Organic theory of financial markets
  • Definitive approaches to financial markets
  • Automation of security exchanges: Automated trading systems (ATS) and Central Depository System (CDS)
  • Internationalisation of financial markets

5.2 Marketing financial services

  • Challenges of marketing financial services
  • The consumer decision process in financial services
  • Categories of financial products and services
  • Pricing and advertising of products relating to financial services
  • Distribution of financial services; traditional channels of distribution; technology driven delivery channels
  • The process of new product introduction in financial services markets
  • Segmentation bases within financial markets
  • Customer satisfaction with financial services; building financial consumers relationship; consumer retention and loyalty

5.3 Financial markets

  • Money markets: purpose, participants, trading; money market instruments(treasury bills, commercial papers, negotiable certificates of deposit)
  • Bond markets: purpose, participants; bond market instruments(treasury bonds, municipal bonds, corporate bonds, structured notes, exchange-traded notes)
  • Equity markets: purpose, participants, Initial Public Offering(IPO),share offering and repurchases, market orders
  • Mortgage markets: purpose, participants, classification, types of residential mortgages, participants, mortgage market instruments
  • Foreign exchange markets: purpose, participants; forex market currency pairs
  • Derivatives securities markets: futures markets, forward markets, option markets and swap markets, purpose, participants and instruments

5.4 Security market indices

  • Security market index
  • Calculation and interpretation of an index value, price return and total return
  • Choices and issues in index construction and management: different weighting methods used in index construction
  • Index rebalancing and reconstitution
  • Uses of security market indices
  • Types of equity indices: price weighted index, value weighted index, equally weighted index and float adjusted weighted index, global equity indices
  • Types of fixed-income indices
  • Indices representing alternative investments
  • Comparison of indices over time

5.5 Market efficiency

  • The concept of market efficiency: definition and assumptions; importance of market efficiency to investment participants
  • Market value and intrinsic value
  • Factors affecting a market’s efficiency
  • Forms of market efficiency: weak form, semi-strong form and strong form; implications of each form of market efficiency for fundamental analysis, technical analysis and the choice between active and passive portfolio management
  • Random walk theory and efficient markets
  • Tests of market efficiency
  • Market anomalies: size effect, P/E ratio effect, day of the week effect (Monday effect), year-end or January effect, return patterns (value line enigma, quarterly earnings surprises), Fama-French value/market value

5.6 Financial intermediation and disintermediation

  • Introduction to financial intermediation and disintermediation
  • Challenges of financial intermediation and irregularities of markets commercial banks: Islamic banking, internet banking, agency banking, international banking
  • Savings and loans associations and co-operative societies
  • Foreign exchange bureaus
  • Unit trusts and mutual funds
  • Insurance companies and pension firms
  • Insurance agencies and brokerage firms
  • Investment companies
  • Investment banks and stock brokerage firms
  • Micro-finance institutions and small and medium enterprises (SMEs)
  • Syndication by commercial banks on the operations of the capital markets
  • Private equity firms
  • Financial advisory firms

5.7 Financial markets regulation

  • Asymmetric information and financial regulation: government safety net, restrictions on asset holdings, capital requirements.
  • Role of government in the financial system; capital markets authority (CMA), central bank, central depository and settlement corporation (CDSC)
  • Role of ICIFA in regulating investment and financial analysts
  • Financial supervision: chartering and examination, assessment of risk
  • Management, disclosure requirements, restrictions on competition
  • Financial liberalisation, stratification and rationalisation
  • Financial deepening
  • Banks runs and panics
  • The liquidity crisis

5.8 Informal finance

  • Introduction to informal finance
  • Sources of informal finance
  • Features of informal finance
  • Informal investment organisations
  • Challenges of informal finance

5.9 Unclaimed Financial Assets Authority and Financial Reporting center

  • Objectives
  • Functions and powers
  • Due diligence requirements

5.10 Emerging issues and trends



This paper is intended to equip the candidate with knowledge, skills and attitudes that will enable him/her to comply with and implement public financial management regulations and compute taxes for various entities.


  • A candidate who passes this paper should be able to:
  • Comply with the regulatory framework in public financial management (PFM)
  • Compute tax for various entities
  • Manage the budgetary process, public revenue and control public expenditure in national and county governments
  • Apply the written tax law in addressing various tax issues
  • Manage non-complex public financial management issues in public entities.


6.1 Introduction to public financial management

  • Nature and scope of public finance
  • General overview of public financial management as envisaged by the Constitution
  • Role of the national and county treasuries
  • Overview of the Public Financial Management Act
  • Financial regulations
  • Treasury circulars; meaning and application
  • Process of developing national and county government finance bills
  • Role of budget officers in budget preparation and execution
  • Responsibilities of the national and county treasuries in relation to budget preparation
  • Budget process for both national, county and public entities

6.2 Establishment of public funds in the public sector

  • Provision of establishing public funds
  • Rationale of creation of public funds
  • The Consolidated Fund
  • The establishment and administration of contingency funds
  • The establishment and administration of equalisation funds
  • County revenue sources

6.3 Supply chain management in public entities

  • Definitions and terminologies
  • General overview of Public Procurement and Disposal (PPD) Act
  • Procurement guidelines as envisaged by PPD Act
  • Committees responsible for procurement
  • Procurement process by National, County and other public entities
  • Tendering process and selection of suppliers in public sector
  • Concept of e-procurement

6.4 Oversight function in public finance management

  • The role of National Assembly
  • The role of Senate
  • The role of County Assembly
  • The role of Auditor General
  • The role of Internal Audit
  • Role of Controller of Budget in relation to disbursement of public funds as envisaged by the Constitution and PFM Act, 2012

6.5 Introduction to taxation

  • History of taxation
  • Types of taxation
  • Principles of an optimal tax system
  • Single versus multiple tax systems
  • Classification of tax systems
  • Tax shifting
  • Factors that determine tax shifting
  • Tax evasion and tax avoidance
  • Taxable capacity
  • Fiscal policies
  • The Revenue Authority; history, structure and mandate

6.6 Taxation of income of persons

  • Taxable and non-taxable persons
  • Sources of taxable incomes
  • Employment income:
  • Taxable and non-taxable benefits
  • Allowable and non-allowable deductions
  • Tax credits (withholding tax, personal and insurance relief, others)
  • Incomes from past employment
  • Business income:
  • Sole proprietorship
  • Partnerships (excluding conversions)
  • Incorporated entities (excluding specialised institutions)
  • Turnover tax/presumptive tax
  • Income from use of propertyrent and royalties
  • Farming income
  • Investment income
  • Miscellaneous taxes and other revenues
  • Stamp duty
  • Catering levy
  • Motor vehicle advance tax
  • Capital gains tax

6.7 Capital deductions

  • Rationale for capital deductions
  • Investment deductions: ordinary manufacturers
  • Industrial building deductions
  • Wear and tear allowances
  • Farm works deductions
  • Shipping investment deduction
  • Other deductions

6.8 Administration of income tax

  • Registration and deregistration of tax payers
  • Assessments and returns
  • Operations of PAYE systems: Preparation of PAYE returns, categories of employees
  • Statutory deductions (NSSF and NHIF)
  • Notices, objections, appeals and relief for mistakes
  • Tax decisions; objections and appeals
  • Collection, recovery and refund of taxes
  • Administrative penalties and offences
  • Application of ICT in taxation: iTax

6.9 Administration of value added tax

  • Introduction and development of VAT
  • Registration and deregistration of businesses for VAT
  • Taxable and non taxable supplies
  • Privileged persons and institutions
  • VAT rates
  • VAT records
  • Value for VAT, tax point
  • Accounting for VAT
  • VAT returns
  • Remission, rebate and refund of VAT
  • Rights and obligations of VAT registered person
  • Changes to be notified to the commissioner
  • Offences fines, penalties and interest
  • Enforcement
  • Objection and appeals: Requirements and procedure

6.10 Customs taxes and excise taxes

  • Customs procedure
  • Import and export duties
  • Prohibitions and restriction measures
  • Transit goods and bond securities
  • Purposes of customs and excise duties
  • Goods subject to customs control
  • Import declaration form, pre-shipment inspection, clean report of findings
  • Excisable goods and services
  • Application for excise duty (licensing)
  • Use of excise stamps
  • Offences and penalties
  • Excisable goods management system

6.11 Emerging issues and trends







This paper is intended to equip the candidate with knowledge, skills and attitudes that will enable him/her to comply with the regulatory framework governing financial markets.


  • A candidate who passes this paper should be able to:
  • Comply with the legal provisions relating to financial markets, including the laws of contract and agency
  • Comply with the licensing regulations of the securities exchange
  • Comply with the guidelines and rules of the central depository system
  • Identify the offences and penalties relating to trading in securities
  • Demonstrate an understanding of the processes and law of anti-money laundering
  • Maintain securities registers, accounts and records


7.1 Introduction to Law

  • Nature, purpose and classification of law
  • Sources of law
  • The court system; establishment, composition and jurisdiction;

7.2 Law of contract

  • Definition and nature of a contract
  • Classification of contracts
  • Formation of a contract
  • Terms of a contract
  • Vitiating factors
  • Illegal contracts
  • Discharge of contract
  • Remedies for breach of contract
  • Limitations of actions

7.3 Law of agency

  • Nature of agency
  • Formation of agency
  • Special classes of agents: factors, banks, brokers
  • Authority of the agent
  • Duties and rights of the principal and agent
  • Personal liability of the agent
  • Termination of agency

7.4 Regulation of financial markets

  • Historical development of the law and regulations governing financial markets
  • Need for regulation
  • Regulatory strategies in financial services
  • Financial regulators
  • Central Bank of Kenya
  • Capital Markets Authority
  • Deposit Protection Fund
  • Insurance Regulatory Authority
  • Retirement Benefits Authority
  • Sacco Societies Regulatory Authority
  • Institute of Certified Investment and Financial Analysts(ICIFA)
  • Professional bodies in financial services
  • Regulations in the international financial markets
  • The International Organisation of Securities Commissions(IOSCO) principles for self regulation

7.5 Regulations of capital markets

  • Capital Markets Authority
  • Investor Compensation Fund Board
  • The Capital Markets Tribunal
  • The Capital Markets Fraud Investigations Unit
  • The International Organisation of Securities Commissions principles relating to the regulator

7.6 Regulation of financial market intermediaries

  • Stockbrokers
  • Stock dealers
  • Investment banks
  • Investment advisers
  • Fund managers
  • Credit rating agencies
  • Collective investments schemes
  • Custodians
  • The International Organization of Securities Commissions(IOSCO) principles for credit rating agencies, collective investment schemes and market intermediaries

7.7 Raising capital in the securities market

  • Types of shares
  • Private offers
  • Public offers; listing by introduction ,offer by tender and rights issue
  • Prospectus /information memorandum
  • The International Organisation of Securities Commissions(IOSCO) principles for issuers

7.8 Central depository system

  • The Central Depository Settlement Corporation
  • Establishment of the central depository
  • Duties of a central depository
  • Central depository agents
  • Rules and regulations of the central depository
  • Remedies for breach of duties
  • Security measures
  • Disclosure of information by central depository agents
  • Central Depository Guarantee Fund

7.9 Immobilisation and dematerialisation

  • Meaning
  • Prescription of securities for immobilisation
  • Transfer to a central depository or nominee company
  • Operation of securities account
  • Restriction of trade in eligible securities exchange
  • Establishment
  • Membership
  • Rules
  • Listing and post listing requirements
  • Self Listing of the exchange
  • Cross border listing

7.10 Securities transactions

  • Book entry of transactions and prohibition
  • Records of depositors
  • Suspended securities
  • Suspension and delisting of securities
  • Charging or mortgaging of securities
  • Bonus and rights issue
  • Prohibition of dealings in book entry securities
  • Insider trading
  • The International Organisation of Securities Commissions(IOSCO) principles for enforcement of securities regulation

7.11Securities registers, accounts and records

  • interests in securities
  • Restrictions in securities transactions
  • Register of interests in securities
  • Types of securities accounts
  • Maintenance of records
  • Accounts statements
  • Record of depositors
  • Audit of accounts, records and registers

7.12 Corporate governance

  • Meaning of corporate governance
  • Application of corporate governance principles in financial markets
  • The role of capital market authorities in enforcement of corporate governance
  • The International Organization of Securities Commissions(IOSCO) principles for cooperation in regulation

7.13 Prevention of money laundering

  • Meaning of money laundering
  • Component of money laundering
  • Anti money laundering legislation
  • Anti Money Laundering Advisory Board
  • The Assets Recovery Agency
  • Criminal Assets Recovery Fund
  • Prevention of terrorism regulations
  • Counter Financing of Terrorism Inter-Ministerial Committee: objectives, functions and powers
  • The Financial Reporting Centre: objectives, functions and powers
  • Due diligence requirements
  • Wire transfers

7.14 Emerging issues and trends




This paper is intended to equip the candidate with the knowledge, skills and techniques that will enable him/her to make corporate finance decisions.


On successful completion of this paper, the candidate should be able to:

  • Make capital budgeting decisions under environment of certainty, uncertainty and risk
  • Make appropriate capital structure decisions of a firm
  • Select the optimal capital structure of a firm
  • Manage the working capital of a firm
  • Undertake corporate restructuring
  • Evaluate mergers and acquisitions
  • Make decisions in the context of Islamic Finance


8.1 Overview of corporate finance

  • Nature and scope of corporate finance
  • Financial decision making process
  • Finance functions
  • Goals of the firm
  • Agency theory concept, conflicts and resolutions
  • Measuring managerial performance, compensation and incentives

8.2 Cost of capital

  • The concept and significance of cost of capital
  • Components of cost of capital
  • Weighted average cost of capital (WACC) of a company
  • Marginal cost of capital( MCC) of a company
  • Use of marginal cost of capital and the investment opportunity schedule in determination of the optimal capital budget
  • Cost of debt capital using the yield-to-maturity approach and the debt-rating approach
  • Computation of the cost of non-callable and nonconvertible preferred shares
  • Computation of the cost of equity capital using the capital asset pricing model approach, the dividend discount model approach, and the bond-yield-plus riskpremium approach
  • Computation of the beta and cost of capital for a project
  • Uses of country risk premiums in estimating the cost of equity

8.3 Capital structure

  • Sources of capital
  • Factors to consider when selecting source of funds
  • Capital structure of a firm
  • Factors influencing capital structure
  • Evaluation of financing proposals and determination of operating profit/EPS at the point of indifference, range of combined operating profit within which to recommend the financing option, lease vs. buy decisions
  • Capital structure theories: traditional theories; net income (NI) approach; net operating income (NOI) approach; Franco Modigliani and Merton Miller (MM) propositions-MM without taxes, MM with corporate taxes, MM with corporate and personal taxes, and MM with taxes and financial distress costs; trade-off theory and pecking order theory.
  • Target capital structure; reasons why a company’s actual capital structure may fluctuate around its target
  • Measures of leverage: Overview of leverage; importance of business risk, sales risk, operating risk, and financial risk in leverage; classification of a risk; degree of operating leverage, the degree of financial leverage, and the degree of total leverage; breakeven quantity of sales and determination of the company’s net income at various sales levels; computation of the operating breakeven quantity of sales, evolution of financing options and determination of operating profit (EBIT)/EPS at the point of indifference, range of combined operating profit (EBIT) within each financing.

8.4 Capital investment decisions

8.4.1 Capital investment decisions under certainty

  • Nature of capital investment decisions under certainty
  • Classification of capital budgeting decisions
  • Ideal features of a capital budgeting technique
  • Categories of capital projects
  • Basic principles of capital budgeting; evaluation and selection of capital projects: mutually exclusive projects, project sequencing, and capital rationing.
  • Capital budgeting techniques under certainty
  • Estimating project cash flows

8.4.2 Capital investment decisions under uncertainty

  • Nature and measurement of risk and uncertainty
  • Investment decision under capital rationing :multi period; investment decision under inflation ,investment decision under uncertainty/risk
  • Techniques of handling risk: sensitivity analysis; scenario analysis; simulation analysis; decision theory models; certainty equivalent; risk adjusted discount rates; utility curves
  • Special cases in investment decision: projects with unequal lives; replacement analysis; abandonment decision
  • Real options in investment decisions: types of real options ;evaluation of a capital project using real options
  • Common capital budgeting pitfalls
  • Computation of accounting income and economic income in the context of capital budgeting
  • Evaluation of a capital project using economic profit, residual income, and claims valuation models for capital budgeting.

8.5 Management of working capital

  • Factors influencing working capital requirements of a firm
  • Distinction between working capital and management of working capital
  • Working capital concepts; gross and net working capital; seasonal and permanent working capital
  • Primary and secondary sources of liquidity; factors that influencing a company’s liquidity position
  • Company’s liquidity measures in comparison to those of peer companies
  • Evaluation of working capital effectiveness of a company based on its operating and cash conversion cycles; comparison of the company’s effectiveness with that of peer companies
  • Effect of different types of cash flows on a company’s net daily cash position
  • Computation of comparable yields on various securities; evaluation of a company’s short-term working capital investment and financing policy guidelines
  • Company’s management of accounts receivable, inventory, cash and accounts payable over time and compared to peer companies
  • Evaluation of the choices of short-term funding available to a company
  • Profitabilityliquidity tradeoff

8.6 Mergers and acquisitions

  • Classification of merger and acquisition (M&A) activities based on forms of integration and relatedness of business activities
  • Common motivations and demotivations behind mergers and acquisitions; mergers and acquisition in global context
  • Bootstrapping of earnings per share (EPS); computation of a company’s post-merger EPS
  • The relation between merger motivations and types of mergers based on industry life cycles
  • Contrast merger transaction characteristics by form of acquisition, method of payment and attitude of target management
  • Pre-offer defence mechanisms and post-offer takeover defence mechanisms
  • Computation of Herfindahl-Hirschman Index, and the likelihood of an antitrust challenge for a given business combination
  • Discounted cash flow analysis, comparable company analyses, and comparable transaction analyses for valuing a target company, including the advantages and disa

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