A priority area of the new president of the Institute of Cost and Works Accountants of India, G N Venkataraman, is to make the institute more visible. In an interview with Sapna Dogra Singh, he said ICWAI would also lobby with the government to accept the recommendations of the expert group on widening the scope of cost audit by including more companies and sectors. Excerpts:
What are your priority areas for the year?
To provide more visibility to the institute and the profession of cost accounting would be my topmost priority. Another important area would be to push forward the expert committee's recommendations on widening the area of cost audit beyond 44 industries and products. The institute would pursue these with the government.
What are the main recommendations of the expert group?
All manufacturing companies with a paid-up capital of Rs 50 crore (Rs 500 million) or more will be required to conduct a statutory cost audit, which would bring about 25,000 firms under the ambit of cost audit. At present, only 44 industries and specific products within an industry come under cost audit.
The proposed change will have a major positive impact on the profession, because more firms will have to mandatorily appoint a cost auditor and have cost accounting records audited on an annual basis. At present, about 1,800 cost accounting professionals practice in India, against 46,000 qualified people.
Which sectors has the expert group recommended for cost audit?
Except agriculture, it has recommended that all sectors be covered.
Do you see it happening in your tenure?
It is a process and there are certain things that need to done from the institute. I would be appointing a separate committee to oversee and implement some of the recommendations which don't need the ministry of corporate affairs' approval.
Enterprise governance is one such area where cost audit and cost records have to be redefined, but this would be done without burdening the industry with all kinds of formats. The Institute would also bring out cost accounting standards as recommended by the expert group.
How many cost accounting standards would ICWAI come out with this year?
Of 39 cost accounting standards, six are already out and another five are on anvil, awaiting Council approval. Work on the remaining 28 would follow soon and in a couple of years, all standards would be issued. And till these come, there are generally accepted cost accounting standards to fill the gap.
What about the change of the name of the Institute that your predecessors have been demanding?
Yes, we are pressing for the name of the Institute to be changed to Institute of Cost and Management Accounting and we have been told it is under process.
ICWAI has objected to the amendment of Section 14A and Section 14AA of the Central Excise Act in the Finance Bill 2009.
We have asked the government to equate cost accountants with chartered accountants by recognising them under the definition of 'accountants' under Section 288 of the Income Tax Act. We are equally qualified and competent. Since we are specialists in indirect tax, cost accountants would be playing an important role when the GST (goods & services tax) would be implemented.
