Professional Avenues for Cost Accountants Post by CMA Samir Biswal

In the present scenario, Cost Accountants are in great demand in private

enterprises, government sector, banking & finance sector, developmental agencies, education, training & research sector as well as in service and public utility sector. Because of their quality training, they can hold top management position in public and private sectors’ enterprises like Chairman cum Managing Directors, Managing Director, Finance Director, Financial Controller, Chief Financial Officer (CFO), Cost Controller, Marketing Manager and Chief Internal Auditor etc. Those managing their own businesses have found themselves a Manager and an Accountant to control and flourish their businesses. There is no doubt that a Cost Accountant can attain the highest ladder of professional career. There is a sustained demand for qualified, trained and experienced cost accountants in India and abroad in different industries and Government Departments. Many members of the Institute are also engaged in providing professional and cost consultancy services and in teaching cost and management accountancy in Universities and Colleges.

Cost accountancy edges over financial accounting. Cost accounting promotes study and adoption of scientific methods to secure maximum efficiency in industrial, commercial and other spheres, as compared to financial accounting. Financial accounting mainly draws conclusions on the basis of post facto data long after the operations are put through and expenditure were incurred enabling score keeping or at best statistical analysis. Therefore, role of cost accountants go beyond a financial accountant and they help the management in regulating production operations and processes of production.
The members of the Institute are the driving force in the team of management while in employment, and as Cost Auditors, Advisors and Consultants in practice.
There are several areas of practice available for Cost Accountants, a list of which is given below:

Independent practice
There is vast scope for practice by a Cost Accountant for which he has to obtain Practice Certificate from the Institute. Details in this regard are available in the “Membership Section” of the Institute website: http://www.icmai.in A Cost Accountant may set up the practice at his own as Proprietor or set up a new partnership firm with like-minded Cost Accountants in practice or may be admitted as new partner in the existing firm of Cost Accountants in practice. His clientele include private and public companies, large, medium and small scale undertakings, partnership and proprietary concerns, industrial, commercial and service undertakings etc. Suggested guidelines for minimum fee may be seen from the Institute website at:
http://icmai.in/upload/carr-car/Cost_Audit_Fee_of_ICWAI.pdf
There are several areas of practice available for Cost Accountants, which are as follows:

Fields for Practice

The Fields for Practising Cost Accountants are divided into two parts:
a) Audit areas and
b) Certification and Consultancy areas. These areas are further bifurcated under Central and State Governments.
Summarized position in respect of Fields for Practising Cost Accountants is as follows:
a) Audit areas:

•  Cost Audit – Corporate Sector
•  Compliance Audit of Reserve Bank of India (India's Central Bank) for the purpose of Lending under Consortium Arrangement / Multiple Banking Arrangements
•  Cost Audit – Co-operative sector
•  VAT Audit under various State Value Added Tax/ Rules
•  Internal Audit of Companies including SEBI and NSDL
•  Stock Audit for Banks
•  Central Excise Audit
•  Concurrent Audit

(A) Audit and other Work
Cost Audit, Compliance Report and Maintenance of Cost Accounting Records

Section 209(1) (d) of the Companies Act, 1956, incorporated in 1965, is the backbone of statutory cost accounting in the Indian corporate sector. This framework put to practice, through promulgation of Cost Accounting Records Rules by the Government, has inculcated a sense of cost consciousness in large number of industries/companies. The mechanism of maintenance of cost records, to a very large extent, has helped industry to face the fierce competitive forces arising out of post-1991 liberalization and globalization. It also served well the legal and non-legal requirements of various regulatory authorities, government agencies, tariff/price fixation bodies, research organisations, etc.
Presently, the prescription of maintenance of cost accounting records rules has been extended to all companies (except exempted categories) engaged in production, processing, manufacturing and mining activities by the Central Government through common cost accounting records rules vide GSR 429(E) dated 3rd June 2011 and by new industry specific Cost Accounting Records Rules, 2011 notified on 7th December 2011 for six regulated industries namely, Telecommunication, Petroleum, Electricity, Sugar (Erstwhile Industrial Alcohol and Sugar cost Accounting Records Rules were merged in ‘Sugar Industry’ cost accounting records rules 2011), Fertilizer, and Pharmaceutical (Erstwhile Bulk Drugs and Formulations cost accounting records rules were merged in ‘Pharmaceutical Industry’ cost accounting records rules 2011). These cost accounting records rules have been notified by the Central Government in supersession of erstwhile 44 Cost Accounting Records Rules issued earlier for product-wise/company wise.

Cost Audit
The Central Government under section 233B of the Companies Act, 1956 may direct the companies to conduct the cost audit as per the provisions of above section. In exercise of these powers, the Ministry of Corporate Affairs, Cost Audit Branch issued cost audit orders dated 2nd May 2011, 3rd May 2011 (amended by 30th June cost audit order) 30th June 2011, 24th January 2012 and 6th November 2012. The Ministry of Corporate Affairs has also revised procedure for appointment of cost auditor on 11th April 2011and notified revised Companies (Cost Audit Report) Rules 2011 vide GSR 430(E) dated 3rd June 2011. The cost audit by the companies subject to audit should be conducted in the manner provided in these notifications read with Section 233B of the Companies Act 1956.
The Cost Audit can be done only by the Cost Accountant in Practice or Firm of Cost Accountants appointed as Cost Auditor for the Company in terms of revised procedure for appointment referred above.

Compliance Report
Cost Accounting Records Rules (Common & Industry Specific referred above) prescribe submission of Compliance Report by the Companies on which these cost accounting records rules are applicable. Annexure to compliance report is to be certified by a cost accountant and approved by the Board of Directors before submitting the same to the Central Government by the company.
Cost Accountant for the purpose of compliance report means a cost accountant who is either a permanent employee of the company or holds a valid certificate of practice issued by the Institute.

Maintenance of Cost Records
Cost Accounting Records Rules (Common & Industry Specific referred above) prescribe maintenance of cost records by the companies on which these cost accounting records rules are applicable. “Cost Records” in terms of these cost accounting records rules means books of account relating to utilisation of materials, labour and other items of cost as applicable to the production, processing, manufacturing or mining activities of the company. The cost records are required to be kept on regular basis in such manner so as to make it possible to calculate per unit cost of production or cost of operations, cost of sales and margin for each of its products and activities for every financial year on monthly/quarterly/half-yearly/annual basis. It shall be the duty of every person, referred to in sub-section (6) and (7) of section 209 of the Companies Act, 1956, to take all reasonable steps to secure compliance by the company with the provisions of these rules in the same manner as he is liable to maintain accounts required under sub-section (1) of section 209 of the said Act.
To secure the compliance with the aforesaid rules, the companies on which the cost accounting records rules are applicable may nominate the cost accountant working with the company or alternatively appoint cost accountant in practice or firm of cost accountants for this purpose.

Internal Audit of Cost Records
The Companies (Cost Audit Report) Rules 2011 issued by Ministry of Corporate Affairs vide G.S.R. 430(E) dated 3rd June 2011 vide Form II Cost Audit Report point (vi) requires from a Cost Auditor to certify that the Company audited by him has the system of internal audit of cost records commensurate to its nature and size of its business.
The Cost Accountants are authorised to conduct audit under section 233 (B) and other work as per the provisions of Companies Act and Companies (Cost Audit) Report Rules 2011(CAR) and Cost Accounting Records Rules 2011 (CARR) as elaborated above. These notifications are subject to various clarifications issued by the Ministry of Corporate Affairs during 2011 and 2012.
For more details on notifications on CARR & CAR, readers may refer to Institute website at: http://icmai.in/carr_car
The Cost Accountants apart from Cost Audit under Section 233B of the Companies Act, 1956 are also authorized for following Audit Works:

• Compliance Audit of Reserve Bank of India (India's Central Bank) for the purpose Lending under Consortium Arrangement / Multiple Banking Arrangements, the banks are required to obtain regular certification from professional like Cost Accountants regarding compliance of various statutory prescriptions that are in vogue.
• Central Board of Excise and Customs (CBEC) authorizes Cost Accountants in practice for Special Audit in certain cases under Section 11 of Customs Act, 1962, The Chief Commissioner of Customs may, for reasons to be recorded in writing, direct a manufacturer to get the accounts of his warehouse, office, stores, godowns, factory, depot, or other establishment audited by a Cost Accountant, nominated by him in this behalf.
• CBEC also authorizes Cost Accountants for Special Audit under Section 14A & 14AA of the Central Excise Act 1944;
• Half-yearly Internal Audit of Stock Brokers and Credit Rating Agencies as prescribed by Securities Exchange Board of India (SEBI);
• Internal and Concurrent Audit for depository operations under National Securities Depository Ltd (NSDL);
• Audit for Metering and Billing Accuracy- authorised to conduct audit for Telecom Regulatory Authority of India (TRAI)
• Stock Audit and Concurrent Audit of many Public Sector and Private Sector Banks in India;
• Empanelled by many State Public Center Enterprises (SPSEs) as Internal Auditor for auditing financial books of account;
• Empanelled by many Public Sector Enterprises (PSEs), Public and Private limited companies as Internal Auditor for auditing financial books of accounts;
• Empanelled by many Cooperative Societies in States as Internal Auditor for auditing financial books of accounts;
• Statutory Auditors under Value Added Tax Act of States: Many States have authorised Cost Accountants for auditing, certification of returns and to appear as authorised representative on behalf of their clients under the Acts. The list of States where Cost Accountants are authorised to conduct VAT Audit is given atAnnexure-1.

(B) Certification Areas

Various Ministries of Government of India have authorised the Cost Accountants in practice for certifying various returns and to issue compliance certificate as per their formats. Such ministries are Ministry of Finance, Ministry of Commerce, Ministry of Corporate Affairs, Ministry of Chemicals and Fertilizers, Ministry of Textile, Ministry of Consumer Affairs, Food and Public Distribution and gist of the work under them are as follows:

• 1. Issuance of various certificates under Foreign Trade Policy & Procedures 2009-14 and Aayat Niryat (Import and Export) Forms (ANF). Vide F.No.01/94/180/468-Appendices/AM12/PC 4 dated 11th October 2012, the cost accountants have been now authorised to do certification of all forms and statements, wherever certification by a Chartered Accountant was required earlier.
• 2. Certificate of Cost of production of captively consumed goods as per Rule 8 of Central Excise Act, 1944 in accordance with Cost Accounting Standard CAS-4 issued by our Institute.
• 3. Certificate for Average Cost of transportation as per Rule 5 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000.
• 4. Certificate towards the amount of duty paid on the materials used for the manufacture of exported goods as indicated in Forms DBK-I,II, IIA,III, IIIA under Customs Act, 1962
• 5. Issuance of Various Certificates as prescribed by Fertilizer Industry Coordination Committee (FICC) in respect of certifying Cost Data for Subsidy Scheme, Transportation Claims, Escalation Claims and Equalize Freight Claims.
• 6. Certificate of product wise position of production dispatches stock etc. for the year (Annexure III-A) under FICC.
• 7. Issuance of Certificates in Form-I to VI as prescribed by National Pharmaceutical Pricing Authority (NPPA), is an organization established by the Government of India to fix/ revise the prices of controlled bulk drugs and formulations.
• 8. Reporting and Audit for System on Accounting Separation- Certification Work Telecom Regulatory Authority of India (TRAI)
• 9. Certificate of fulfillment of Hank Yarn obligation for Textile Industry and Textile Committee Cess- Monthly Return in Form-A.
• 10. Certifying half yearly return in Form ‘N’ for Quantity of Rubber purchased & consumed by manufacturers under rule 33 (f) of the Rubber Rules, 1955;
• 11. Certifying Performa CI & C2 under Anti Dumping as prescribed by Ministry of Commerce;
• 12. Certifying Statement of cost of production for Anti-dumping petition to Government of India;
• 13. Certification of Application for License and renewal thereof to act as Surveyor and Loss Assessor under Insurance Regulatory and Development Authority (IRDA)
• 14. Certification of various forms prescribed under the Central Electricity Regulatory Commission (CERC);

(C) Other Work
Central Board of Excise and Customs (CBEC) authorizes Cost Accountants in practice for the following work:

• 1. Ministry of Finance amended Circular No.18/2010 Customs dated 08.07.2010 vide Circular No 01/ 2012-Customs dated 5th January 2012 to authorize inter alia Cost Accountants to issue a certificate, certifying that burden of 4% CVD has not been passed on by the importers to any other person.
• 2. Certification of refund of additional duty of Customs on the goods imported for subsequent sale under Indian Customs Act;
• 3. Under Rule 5 of Customs valuation (Determination of Value of Export Goods) Rules, 2007, the proper officer shall give due consideration to the cost-certificate issued by a Cost Accountant;
• 4. Under the Fixation of brand rate of Drawback without pre-verification - Simplified procedure Scheme, unless there are any special reasons, drawback rates are to be fixed without pre-verification of the date filed, (which should be duly verified by the applicant and Cost Accountant or Chartered Accountant or Chartered Engineers) and the exporter would be authorised by provisional brand rate letters issued by the Ministry to claim the drawback rate considered admissible from the concerned Customs House (s);
• 5. Under Rules 6 and 7 of the Customs and Central Excise Duties Drawback Rules, 1995, the exporters may be asked to furnish the purchase invoice as to the procurement of the raw hides/wet blue leather. They should also furnish a certificate from the Cost Accountant or Chartered Accountant as to the consumption and cost of processing chemicals used for its processing and other incidental overhead charges incurred;
• 6. The Commissioner of Customs/Central Excise may direct the concerned developer to get his accounts audited by a Cost Accountant nominated by him in this behalf. The expenses of and incidental to such audit shall be borne by the concerned developer, vide Circular No. 52/2002-Customs dated 14th August, 2002;
• 7. Accepting services of the Cost Accountant’s may also be considered by the respective Commissionrates depending upon the extent of complexity of the cases as provided under Circular No.04/2006 dated 12th January, 2006 modified and its inclusion in the assessed value as extended cost of transportation;
• 8. Certified Facilitation Centres (CFCs) - under ACES-CBEC Scheme: As per MOU with Central Board of Excise and Customs (CBEC), Ministry of Finance, Government of India, Cost Accountants in whole-time practice are authorised to set up Automation of Central Excise and Service Tax (ACES) Certified Facilitation Centres (CFCs) and offer various services such as digitization of paper documents and on-line filing/ uploading of documents such as Application for Registration, filing of returns, refunds, accounting, disputes resolution, audit, provisional assessment, exports, claims, intimations and permission to assessees.to act as facilitators under Certified Facilitation Centre Scheme in filing various Excise and Service Tax Returns under the provisions of Central Excise Act and Service Tax Act.

Apart from other services many companies in Central & State Governments and their various Departments, Public, Private, Public Sector Banks have empanelled cost accountants for variety of work viz. Cost Management, Techno-economic Study, Systems, Computerization, ERP, Insurance companies and other Financial Institutions, Financial Management, Project Consultancy, Materials Management, Management Accountancy, Tax Planning, Diagnostic Accounting & Revival of Sick Units, Merchant Banking, Investment Counseling & Portfolio Management, Internal Management and Operational Audits, Organization Structure Review, Training and Executive Selection, Incentive Plans, Productivity, Conservation of Energy and Energy Audit and Environmental Audit etc.

(D) Appearance as an Authorised Representative
A cost accountant is allowed under various Acts to appear before various Authorities/ Appellate Tribunals in connection with any proceedings under the respective Act. The detail is given below:

1. Companies Act:
(i) Right to legal representation: Section 432 of the Companies Act 1956.
(ii) Rights of a party to appear before the Bench: Regulation 19 of Company Law Board Regulations, 1991

2. Central Excise & Customs:
(i) Appearance by Authorised Representative: Section 35Q of the Central Excises Act, 1944.
(ii) Appearance by Authorised Representative: Section 146A of the Customs Act, 1962.
(iii) Appearance by Authorised Representative: Rule 2(c) of Customs, Excise and Gold (Control) Appellate Tribunal (Procedure) Rules, 1982.

3. Central Electricity Regulatory Commission (CERC): Authority to represent before the Commission: vide Notification No. 8/ (1)/99/CERC dated 27th August, 1999

4. The Competition Commission of India (CCI):
(i) Appearance before Commission: Section 35 of the Competition (Amendment) Act, 2007
(ii) Right to legal representation: Appeal to the Appellate Tribunal: Section 53(1) of the Competition (Amendment) Act, 2007

5. Income Tax Act, 1961: Appearance by Authorised Representative: Section 288 of the Income Tax Act 1961 read with Rule 50 of the Income Tax Rules 1962.

6. Securities Exchange Board of India (SEBI): Right to Legal Representations:Clause 22C under Conditions for listing: Chapter IV of Listing of Securities.

7. Service Tax: Appearance by Authorised Representative: Section 96D (5) of the Service Tax Act 1994.

8. Special Economic Zone (SEZ): Rights of appellant to appear before the Board:Rule 61 of the Special Economic Zone Rules 2006.

9. Telecom Regulatory Authority of India (TRAI): Right to Legal Representationbefore Appellate Tribunal as per Section 17 of TRAI Act,1997.

10. Value Added Tax Acts/ Rules: Cost Accountants are authorised to appear before authorities under VAT Acts/ Rules of various State Government as per Annexure-2

Cost Accountants in Employment:
There has been increasing awareness amongst the business entrepreneurs of the most vital contribution made by cost and management accountancy services in the business houses to the attainment of business objectives. This has accentuated the demand for cost and management accounting services in all the sectors of economy. Many members of the Institute are holding top management positions, viz., Managing Director, Finance Director, Financial Controller, Chief Accountant, Cost Controller, Marketing Manager, Chief Internal Auditor, CEO, CFO etc. Those managing their own businesses have found in themselves a Manager and an Accountant to control and flourish their business. No wonder a Cost Accountant can attain the highest ladder of professional career.

Cost Accountants in Government Department:
Realising the importance of the profession of the Cost and Management Accountancy in the economic development of the nation, the Central Government has constituted an all-India cadre known as Indian Cost Accounts Service (ICoAS) at par with other Class-I services such as IAS, IFS etc. to advise the government in cost pricing and in framing the appropriate fiscal and tax policies.

Cost Accountants in Education:
University Grants Commission (UGC) has notified “UGC Regulations on Minimum Qualifications for Appointment of Teachers and Other Academic Staff in Universities and Colleges and Measures for the Maintenance of Standards in Higher Education, 2010 vide its Circular No. F.3-1/2009 dated 30th June 2010.
The Regulations prescribe the minimum qualification for appointment of teaching faculty in universities and colleges in the area of Management/ Business Administration. The qualifications specified for appointment of Assistant Professor, Associate Professor and Professor in the above area and Principal/Director/Head of the Institution include First Class Graduate and professionally qualified Cost Accountant among other qualifications and subject to other requirements including qualifying NET/SLET/SET as the minimum eligibility condition for recruitment and appointment of Assistant Professors.

This Article is written by CMA Samir Biswal. He can be reached at cmasamirbiswal@gmail.com

Get Sudycafe's Updates by SMS in your mobile by Following below two Steps: 

1. Download our SmartPhone Application & 

2. Send a SMS, Type: JOIN CASTUDYCAFE & send to 9219592195

Subscribe to Studycafe by Email