The Hindu Business Line : ICWAI seeks more focus on cost accounting practices

A SECTION of the members of the Institute of Cost and Works Accountants of India (ICWAI) has come up with a list of proposals which they want to be implemented in order to "energise" their profession.

The proposals relate to direct and indirect taxation, broadening of cost audit record rules, appointment of cost auditors and framing of cost accounting standards.

The list begins with the submission that the institute should change its name to focus on the concept of `cost and management accountants', a move that would reflect the knowledge acquired by its members. "India, it seems, is the only exception to a rule; all similar institutes have changed their identities to ICMA, CIMA or CMA."

There is a need to include cost accountants in the definition of `accountant' in the Income-Tax Act as well as the need to include them in all State VAT Acts for audit and appearance before the authorities concerned.

Cost audit should be made compulsory for all companies covered under section 209 (1) (d), the members said.

"The ordering requirement of CLB u/s 233B should be stopped and cost audit should be made automatic for the companies which are required to maintain cost accounting records u/s 209(1) (d)," said a note that has been circulated.

There is a case for bringing all Governmental activities and projects (both Central & State) under mandatory managerial (cost) accounting, as in the case of the US.

The institute needs to design a format based on total cost management covering all areas of modern business practices.

Further, ICWAI should frame cost accounting records rules for sectors currently not covered by section 209(1) (d).

Members have also said that there should be compulsory appointment of cost accountants in all companies in line with the recommendations of the Sachar Committee (formed in the 80s).

There is need to come out with good cost accounting standards and management accounting guidelines on various important issues.

The management accountancy examination (as post-qualification course) must be discontinued since qualified members are themselves management accountants. Instead, some other course more suited to the current scenario can be thought of and introduced.

On the banking front, all audits, project reports and working capital requirements should be certified by cost accountants. There should be periodic review reports from members to avoid formation of NPAs, they said.