Nahi Jnanena sadrusham pavitramiha vidyate
There is nothing more enabling than knowledge in this world and a person gathers it throughout his life.
Dear Professional Colleagues,
The above verse aptly describes the need for the continued education which is needed by the professionals, if they have to add value either to the practice or organizations in which they are employed. This has become crucial, as our profession gets opened up to more opportunities. I am amazed at the wisdom in our ancient scripts which identified the need for CEP long back.
Our Institute became a recognized professional accounting body in the month of May in 1959, when the then Honourable President of India Dr. Rajendra Prasad, signed the Act of Parliament establishing our Institute as statutory body. We have celebrated the day of signing as the ‘Foundation Day’ all over the country at various locations on 19th May 2012. The true spirit of the celeberations was reflected, when the members and their family congregated to enjoy cultural shows and used the opportunity to interact with each other. The Institute has faced many a turbulent times, reaching the pinnacle when the Parliament passed the much awaited Bill for change of name of our Institute and recognizing us as CMAs in the designation. The year 2011-12 was also year of reckoning as the new form of cost accounting records and cost audit mechanism also emerged successfully in the new reformed form. Many reforms on the Cost Accounting standards, Cost Audit and Assurance Standards, student facilities, examination reforms, major improvement in journal, formation of CEP 2 for countrywide class rooms, opening of the first Centre of Excellence at Hyderabad (COE), announcing Advanced Studies Courses, re-starting the much awaited Navi Mumbai Centre of Excellence building process, integrating chapter accounts with HQ, introducing connect with four regions through Video Conferencing and building up closer co-ordination with sister institutes (specially ICSI) were also initiated during the year. The year also saw the recognition of the Institute in the form admission to Accounting Bodies Network of Prince of Wales A4s Foundation, admission to Government Accounting Standards Board, Institute becoming a member of Committee on Corporate Governance Policy, etc.
All these point out to the solid work that has to be put before us in the forthcoming period, which will be the time of consolidation and retention of the gains so far. While the efforts are on in strengthening the executive of the Institute, I feel that it is important that the members in practice as well as industry reconnect with the Institute in our efforts on institution building. Towards this, the Council has also established Regional coordinators who will assist better connect between the Region and headquarters in spreading the initiatives from the HQ to the regions and chapters. The Council in continuation of the outreach programme has decided to establish “CMA Support Centres” in cities, where there is no presence from the Institute. The publicity campaigns aimed at spreading the profession as a preferred qualification for the youth is on and this will improve the much needed CMA professionals who are in great demand from the industry. With the acceleration of e-governance in membership and student matters, I am sure that the gap in communication between the HQ and others will be the thing of the past.
I am pleased that the Technical Directorate is continuing the scorching pace it has set for itself and have released the Guidance Note on CAS 7 on Employees Cost as recommended by the CASB, 2 Cost Audit and Assurance Standard (CAAS – 101) on Planning an Audit of Cost Statements as recommended by CAASB and Cost Audit and Assurance Standard (CAAS – 102) Cost Audit Documentation as recommended by CAASB. With the audit season looming large, I also extolled the Directorate to come out with some form of Generally Accepted Cost Audit and Assurance Principles, which will bring out the unique requirements of the Cost Audit as a general guidance to the practicing members till the final standards emerge.
Professional Development Directorate
Guidance Note on Maintenance of Cost Accounting Records
I am also pleased to inform the members that the Institute has brought out Guidance Note on Maintenance of Cost Accounting Records. Since the Ministry of Corporate Affairs – Cost Audit Branch has extended to all companies engaged in production, processing manufacturing and mining activities and regulated industries, through a series of notifications, it was necessary for the Institute to explain the extent, scope and methodology of preparation and maintenance of requisite cost accounting records by the companies. The Guidance Note issued by the Institute is an attempt to guide the members employed in various organizations and also those engaged in public practice to ensure that they follow a well-structured cost accounting system suited to the type, size & scale of operations that results in creating the intended cost accounting records leading to collection, assignment, apportionment and absorption of correct cost data to the relevant cost objects in the organization. The structure followed should also enable the Cost Auditor to audit and certify the cost statements for each product/activity in accordance with the notified Cost Accounting Records Rules and Cost Audit Report Rules. The Guidance Note has primarily focused on the uniform Cost Accounting Records Rules notified by the Ministry of Corporate Affairs vide GSR 429(E) dated 3rd June, 2011. In addition, the common principles as embedded in the other six industry specific Cost Accounting Records Rules notified on 7th December, 2011 also remain covered; but the formats as prescribed in these industry specific Cost Accounting Records Rules have to be followed and complied with fully by the regulated industries.
I am sure that the Guidance Note will assist the members in practice, employment and industries in preparation of cost accounting records as required by the Cost Accounting Records Rules. The Guidance Note can be downloaded from the Institute website. The printed version of this Guidance Note will also be available very soon.
It is necessary for the members to understand that as a body regulating the profession, the Institute’s publication has to be a well discussed and fully vetted publication as they represent the views of the Institute. While I understand the members’ impatience as is being expressed in various e-groups, the Institute has to follow the due process and cannot not follow the process of instant expression of opinions, as is being done in the e-groups.
As members are aware that the Cost Audit Branch of MCA revised the procedure for appointment of Cost Auditor vide General Circular No. 15/2011 dated 11th April, 2011and also notified revised Companies (Cost Audit Report) Rules, 2011 vide G.S.R 429 (E) dated 3rd June 2011. To guide and help the members in practice, the Institute has hosted at its website the Practitioners’ Kit which includes inter-alia the procedure of cost audit, revised e-Form 23C & 23D and instructions for filing of these forms, draft formats of various certificates required to be submitted by the cost auditors to companies appointing them, draft Board Resolution to appoint cost auditor, suggestive list of documents/certificates/records required from the company for conduct of cost audit etc. Members may download this Practitioners’ Kit from the Institute website.
Filing of Cost Audit Report and Compliance Report in XBRL Mode
It has been decided by the Ministry of Corporate Affairs vide General Circular No. 8/2012 dated 10th May, 2012 to mandate the cost auditors and the companies to file Cost Audit Reports (Form-I) and Compliance Reports (Form-A) for the year 2011-12 onwards (including the overdue reports relating to any previous year) in eXtensible Business Reporting Language (XBRL) mode. The Institute has already developed the XBRL Taxonomy for Cost Audit Report and Compliance Report and under discussion with Ministry of Corporate Affairs (MCA). Once these Taxonomies are finalized with MCA, the Institute would conduct series of programs in association with Regional Councils and Chapters to impart the necessary technical knowledge on filing and creation of Instance documents in XBRL mode.
The detailed information about these courses is available on the Institute’s website and the registration to these courses has already commenced.Online GST Certification Course by TaxGuru & MSME- Click here to Join
For the benefit of the practicing members, the Council at its 274th Meeting held on 18th May, 2012 has decided that in pursuance of proviso to sub-regulation (1) of Regulation 10 of the Cost and Works Accountants Regulations, 1959, the Certificate of Practice of the members who have paid the prescribed fees and submitted the prescribed form for renewal of Certificate of Practice for 2012-2013 within due date but not having requisite CEP credit hours, shall be renewed up to 31st March, 2013 without creating a precedence. The Certificate of Practice so renewed shall be valid subject to their obtaining requisite CEP credit hours within 30th June, 2012 positively. It is not a positive sign for professional development if the Council has to regularly come out with such extensions, which shows that some members in practice do not take updating themselves seriously. This is a matter of concern as with the current plethora of opportunities available, the need for capacity building and updating has become vital. The demand from the profession is high, and unless the members take the CEP programmes held seriously it will be difficult for them to discharge their professional responsibilities. On this matter, I am also concerned that many chapters continue to concentrate only on oral coaching, with scant regard for conducting any professional development programmes for updating the members. The profession is recognized only on the knowledge dissemination and the depth and breadth of the programmes it conducts. In spite of the financial aspect being taken care of by the HQ through the CEP-2 not many chapters have come forward to take advantage of this facility by the Institute.
I am also concerned that in spite of the humungous opportunities created, single person practice continues to rule the roost. The vital DNA of the Cost Audit profession is in enterprise performance appraisal and management, where good practices assessed by a team of CMA professionals add value to the enterprises. It has become more important now, as many enterprises are going to face trying times due to the downturn in economy and provides a major opportunity for cost accounting profession to establish as a bean grower than as a bean counter. It is very important for the new entrants to realize this aspect and build capacity through partnerships or the LLPs which are emerging the next generation professional entities. As I have highlighted in many forums, ours is not merely a compliance oriented profession, but have to play the role of a value enhancer to the entire spectrum of business from small to large.
CEP Department (1)
The second workshop of revised schedule VI to the Companies Act, 1956 by Dr. T P Ghosh was organized during May 17-18, 2012 at New Delhi which was well received by the participants. Programme on ‘Contracts and Their Management’ and ‘Recent Trends in Corporate Reporting including IFRS and Revised Schedule VI’ was also organized at Gangtok during May 23-26, 2012. Proposals for various in-house programmes have been sent to Indian Railways, Central Warehousing Corporation, Nepal Electricity Authority, Oil and Natural Gas Corporation Limited, National Highways Authority Limited and Punjab State Power Corporation Limited. While the CEP 1 has a strong foothold with the public sector companies, I extol our members to help the Institute extend the reach to private sector also.
CEP Department (2)
The Institute and Confederation of Indian Industry (CII–ITC Centre of Excellence for Sustainability Development) has jointly organized an AccountAbility Accredited ‘Certified Sustainability Assurance Practitioner’ (CSAP) Training Course during 14-18 May 2012 at Chennai, which was very much appreciated by the participants. This course completion authorizes the participant to be a certified practitioner for sustainability engagements.
The Continuing Education Programme Committee in association with Indirect Taxation Committee has announced a series of One day Workshops on Indirect Taxation for CMAs at Delhi, Chandigarh, Mumbai, Kolkata, Hyderabad, Bangalore and Chennai in May and June 2012. On 24th May 2012, workshop at New Delhi was inaugurated by Shri V. K. Garg, Joint Secretary (TRU), CBEC, Ministry of Finance and on 25th May 2012, workshop at Chandigarh was inaugurated by Shri Prosenjit Deb, Deputy Director (Cost), CBEC. There was active participation of CMAs and many aspirants for the forthcoming workshops.
The Department has announced second Batch for Two days Seminar on ‘Risk Based Internal Audit of Banks’(RBIA) during 15-16 June 2012 at Bengaluru after a successful Seminar for first Batch at Hyderabad Centre for Excellence in April 2012.
The Institute is making its presence felt in accounting community in International Arena in a big way. During 2-4 May, 2012 delegation from the Institute attended the meetings of SAFA Board, Committees and International Seminar at Dhaka, Bangladesh. Shri Rakesh Singh, Vice President led the team consisting of Shri T.C.A. Srinivasa Prasad, Council Member and Chairman of PAIB Committee of SAFA; Shri A. Om Prakash, Council Member; Smt. Chandana Bose, Senior Director and Shri Sudhir Sharma, Joint Director. Shri Rakesh Singh was part of SAFA Board representatives group which met HE Mr. Zillur Rahman, Hon’ble President of the Republic of Bangladesh on 3rd May, 2012 at Dhaka. Smt. Chandana Bose presented a paper on behalf of Shri A. N. Raman, Past President, SAFA.
Members may recall Institute organized first Joint Seminar of EFAA-SAFA Alliance in November, 2011 at New Delhi. In continuation of the efforts, Vice President Shri Rakesh Singh attended the International Conference organized by European Federation of Accountants and Auditors for SMEs (EFAA) at Rome, Italy on May 9-10, 2012, as a part of the SAFA delegation.
Shri Sanjay Gupta, Council Member and Shri J. P. Singh, Director (Technical) represented the Institute in 3rd Arab India Conference organized by FICCI at Abu Dhabi, UAE on May 22-23, 2012. This was a rare occasion when big entourage of Ministers from India and Arabic Countries, industrialists and corporate executives shared the forum providing Institute an opportunity to expand its strong presence in Gulf region.
Advanced Studies Directorate
I am glad that Prof.(Dr) Asish Bhattacharya, former Professor of IIM-Calcutta and Director International Management Institute has joined the Institute as Advisor-Advanced Studies. He brings with him the rich experience with the management institutions in conducting industry oriented practical management development programmes. Under his Chairmanship the Board of Advanced Studies has announced the launch of the following three advanced certificate courses:
(I) Business Valuation and Corporate Restructuring;
(II) Treasury and Financial Risk Management; and
(III) Enterprise Performance Management and Appraisal System
All the three courses have been designed and developed in tandem with the market needs. The Board of Advanced Studies comprising eminent academicians, bureaucrats and practitioners have put in their expertise and guidance in structuring these courses in order to make them relevant and contextual to the members and industry. I would urge my professional brethren to understand the need to develop skills and knowledge in emerging areas of management accounting to serve the economy better. I am sure that members shall make the most out of this initiative of the Institute, for getting advanced training on these practical courses.
The Public Relations Directorate of the Institute has also established a series of connect with various media, and regular news about the Institute is appearing in the news papers. The institute in collaboration with “careers 360” has come out with a publication on “Cost Accountancy Course”, which will be made available to all the regions and chapters for distribution during the career fairs or student counseling sessions. The various interviews that have been organized by the PR are already available in the Institute website.
As a part of the CMA Connect, I am happy to inform the members that the Video Conferencing facility has been launched connecting HQ at Kolkata, New Delhi, Mumbai and Chennai on 31st May 2012. This will enable closer interaction between the four arms of the Institute, as well as use the platform conduct the expert meetings for various professional development initiatives. This will be a green initiative which will save travel, time and other resources and will enable experts from industry and other organization to share their knowledge and thoughts on the various PD projects of the Institute.
I find that the Institute and CMA profession is blossoming into a full fledged bloom with emerging capability to spawn many more blooms. But this capability can be nurtured only by the members at large taking advantage of the capacity building opportunities provided by the Institute through its programmes and not merely looking at them from the CEP credits to be fulfilled.
I wish members and their families for the festivals of Hazrat Ali’s Birthday and Jagannath Rath Yatra during the month of June, 2012.
With warm regards,
President, Institute of Cost Accountants of India
31st May, 2012