The Institute of Cost & Works Accountants of India (ICWAI) is one of the three statutory professional bodies, the other two being Institute of Chartered Accountants of India (ICAI), the oldest, and The Institute of Company Secretaries of India (ICSI), the youngest.
Incidentally, the latter two, with their HQs at New Delhi, seem to have more clout with the powers that be. ICWAI continues to have its HQ at Kolkata, probably for sentimental reasons. ICWAI has four regional councils, predictably at Kolkata, Chennai, Mumbai and New Delhi, and 90 chapters dotted all across the country.
A distinctive and also a disastrous feature, for no cogent reason, is that its annual report and audited accounts aren't subject to scrutiny and approval by its members at a meeting, although these have to be circulated to the members, after scrutiny by the Ministry of Corporate Affairs.
The ostensible reason could be that its membership is colossal, and that too spread across all parts of the country. A possible solution could be that AGMs be held in rotation in the regions where membership is concentrated. The council will also become aware of the peculiar problems of the various centres.
The annual report and audited accounts and auditors' report for 2010-11 of ICWAI, is a good example of huge cash accumulation sans responsibility. ICWAI's general fund as of March 31, 2011, was a colossal Rs 118.55 lakh; the auditors have commented that it should be only Rs 117.05 lakh. It is surprising that the auditors haven't put their foot down to have the correct figures in the accounts. ncidentally, the auditors are to be taken to task for not signing the notes, which form an integral part of the accounts.
Another case of irresponsibility, for which the council members should be taken to task, is that a leasehold land was allotted to the Institute by CIDCO, Navi Mumbai, and due to delay in construction, a penalty of Rs 111.64 lakh was imposed up to June 2011. It should be noted that the institute was not having a cash problem. At least, a provision could have been made in the accounts, as a matter of prudence, without admitting the liability.
Employees look forward to their retirement benefits duly safeguarded. It is sad to note, especially for this writer nearing 80 years, with all his retirement benefits paid on due date, that a gratuity liability of Rs 36.18 lakh, payable to LIC, hasn't been provided for. And mind you, there is no dearth of cash. The auditors deserve credit for bringing out this unsavoury act.
Moreover, the auditor's admission that they did not audit financial statements of 10 Chapters, reflecting total assets of Rs 2.20 crore, and as such have relied upon the unaudited financial statements certified by the management of the Institute, adds insult to injury. It is also an eye-opener that the accounts of 38 Chapters were certified by cost accountants — this is an illegal encroachment on the areas specifically earmarked for chartered accountants. Further, in the case of 3 Chapters, financial statements weren't available!
The Government seems to be aware of the inadequacy of the members of ICWAI. Otherwise, why should it be necessary for the appointment of cost auditors by companies on an annual basis? And there seems to be no such stipulation regarding the appointment of chartered accountants as auditors or of company secretaries to undertake assignments reserved for them. When somebody says he is a chartered accountant or a company secretary, he is taken as highly qualified. On the other hand, when the person is a cost accountant, he isn't given much importance!