• Jan
  • 10
  • 2010

Mandatory application of Cost Accounting Standards, w.e.f. 1st April 2010

Article ID 19016 | Posted In CA CS ICWA, Finance | | 3 Comments » Print Friendly and PDF

The Council of the ICWAI at its 251st Meeting held on 12-13 February 2009 and 258th Meeting held on 14th December 2009 decided as below:

Mandatory application of Cost Accounting Standards

“RESOLVED THAT the following Cost Accounting Standards

CAS 1: Classifications of Costs

CAS 2: Capacity Determination

CAS 3: Overheads

CAS 4: Cost of Production for Captive Consumption

CAS 5: Determination of Average (Equalized) Cost of Transportation

CAS 6: Material Cost

CAS 7: Employee Cost

CAS 8: Cost of Utilities

CAS 9: Packing Material Cost

CAS 10: Direct Expenses

shall be mandatory with effect from period commencing on or after 1st April 2010 for being applied for the preparation and certification of General Purpose Cost Accounting Statements.

In case the cost accountant is of the opinion that the aforesaid standards have not been complied with for the preparation of the Cost Statements, it shall be his duty to make a suitable disclosure/qualification in his audit report/ certificate”.

  • CA Surendra Kumar Rakhecha

    I agree with Rajen Vora that there are various types of audits and it increase costs. But, see the other side of the coin. Why management is paid such a huge salaries ? Whether it is not increasing the cost ? Here we argue that due to efficient management the company is in a position to earn revenues. But in case the company incurrs loss; management should also be asked to compensate the company. Is it possible ? Whether it is logical or not ? We forget the contribution made by the auditors. The prime responsibility of preparation of statement of affairs lies with the management. Looking to the huge transactions now-a-days; only a fair view can be given in a short duration of audit. Cost would also increase to a great extent if detailed audits are carried out. In most of the cases; it is not feasible at all to conduct such audits. Many of the companies are already carrying out internal audit, continuous audit etc. Even at the time of scrutiny of the assessment; huge additions are made by the assessing officers which are ultimately deleted by the appellate authorities. What action we can take against erring officers ? Any machinery is there ? Whether we have demanded for it ? Take another point – How many laws are there in India ? Nobody compalin against it. LAW IS FOR PEOPLE’S WELFARE; BUT WHETHER IT IS FAIR TO DRAFT THE LAW IN SUCH A TYPICAL LANGUAGE ? We know very well that if there is any dispute; one will win the case and another will loose. Sometimes it is apparent that the case is strong in favour of one person. Still another advocate tries the case to prove that it is in favour of another one. What would you say ? Can’t we solve the dispute at root level ?

  • Rajen Vora

    Audit Audit Audit !!!!
    This is very rubish thing that Law needs more & more type of audit. It means either professional team not done audit propery or cient not maintained account in proper way or Department wants more & more curruption.
    On ther hand after checking books of account auditor tell client that your prepare all the report , prints etc.. we have (Auditor) to only prepare bills (Profesional Bills) Tis is not fare. If any audit make it compalsory for auditor to prepare details him self and in audit report auditor has to mention that “WE HAVE CHECKED, VERIFIED AND SATISFIED WITH THE DETAILS GIVEN BY ASSESSEE. THE RELEVENT STATEMENTS, REPORT ARE ALSO PREPARE BY US. IN FUTURE ANY LIABILITY COMES THE AUDITORS IS LIABLE TO PAY THE LIABILITY TO PARTICULAR DEPARTMENT AND ASSEESSEEE IS NOT LIABALE TO PAY.”