Career in cma
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23 September 2014
sir currently I m pursuing CMA & CS. I JUST want to know about the career in CMA.
23 September 2014
Professional Avenues for Cost Accountants
In this globalised world, organizations require professionals such as Cost Accountants (CMAs) who have specialized knowledge on business strategy and value creation. The Cost Accountant being the foundation on which the enterprises are built, the specialized education and training by the Institute make the Cost Accountant a multi-faceted professional. CMAs are driving force in all economic activities, as they are the value creator, value enabler, value preserver and value reporter.
Cost Accountants are in great demand in government sector, private sector, banking & finance sector, developmental agencies, education, training & research sector as well as in service and public utility sector. Further, in view of their specialized knowledge and training, CMAs may hold top management position in public and private sectors’ enterprises like Chairman cum Managing Directors, Managing Director, Finance Director, Financial Controller, Chief Financial Officer, Cost Controller, Marketing Manager and Chief Internal Auditor and other important positions.
Those CMAs managing their own businesses have found themselves as a Manager and as an Accountant can control and thereby 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, Internal Auditors, Auditors in case of VAT, Excise, SEBI, NSDL and under other statutes/ Regulatory requirements, 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.cmaicmai.in/external/Home.aspx. 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. For practicing Cost Accountants the Institute issued suggested fees guidelines, which may be seen athttp://www.cmaicmai.in/external/Home.aspx.
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 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 (Special Audit v/s 14A & 14AA Central Excise Act 1944)
• Concurrent Audit
• Special Audit of Service Tax v/s 72 A.
(A) Audit and other Work- Cost Audit, Compliance Report and Maintenance of Cost Accounting Records
Cost Audit
Consequent upon enactment of Companies Act, 2013 which has replaced the Companies Act, 1956, the Ministry of Corporate Affairs vide G.S.R. No. 425 (E) dated 1st July, 2014 notified Companies (Cost Records and Audit) Rules, 2014 under section 148(2), ibid. These rules are effected from 1st April, 2014, applicable from Financial Year 2014-15.
The Companies which were covered under the Cost Audit as per Rules notified prior to the said notification dated 1st July 2014, are required to conduct the Cost Audit under the Rules notified by the Government prior to this Notification.
As per Rules, the Cost Audit can be done only by the Cost Accountant in Practice or Firm of Cost Accountants. Appointment of Cost Auditor by the companies is made as per provisions in the respective Rules.
Compliance Report
Some of the companies have not submitted the Compliance Report, as applicable under the Companies (Cost Accounting Records) Rules, 2011, to the Government. The opportunities are still available to certify the Compliance Report under these Rules. 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
As per Companies (Cost Records and Audit) Rules, 2014, the class of companies which also include foreign companies, are required to maintain “Cost Records”. Cost Records in terms of these rules means books of accounts relating to utilization of materials, labour and other items of Cost as applicable to the production of goods or provisions or services as provided in Section 148 of Companies Act, 2014. As per Rules the cost records are to be maintained by the companies on regular basis in such manner as to facilitate calculation of 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 or quarterly or half-yearly or annual basis. Further, the companies are required to maintain the Cost Records in such manner so as to enable them to exercise control over the various operations and costs to achieve optimum economies in utilisation of resources and these records shall also provide necessary data which is required to be furnished under these rules.
In view of above provisions, Cost accountant in practice may assist the company to maintain the Cost Records and Compliance Report.
Internal Audit and Other Audits
• Section 138(1) of the Companies Act, 2013 empowers the Cost Accountants/Firms of Cost Accountant to conduct the Internal Audit of the Class of Companies. Companies (Accounts) Rules, 2014 issued by the Government vide GSR 239 (E) dated 31st March, 2014 defines the class of companies in which the Cost Accountants/Firms of Cost Accountant can be appointed/empanelled as Internal Auditor.
• 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).
• Internal Audit/Concurrent Audit under National Health Mission(NHM) as empowered by the Ministry of Health & Family Welfare, New Delhi.
• Internal Audit of many State Public Center Enterprises (SPSEs).
• Internal Audit of many Public Sector Enterprises (PSEs), Public and Private limited companies.
• Internal Audit of Cooperative Societies in States.
• Special Audit under Section 14A & 14AA of the Central Excise Act 1944 of Central Board of Excise and Customs (CBEC).
• Special Audit in certain cases under Section 11 of Customs Act, 1962, as authorized by CBEC.
• Audit for Metering and Billing Accuracy- authorised to conduct audit for Telecom Regulatory Authority of India (TRAI).
• Stock Audit of many Public Sector and Private Sector Banks in India.
• Stock audit for Working Capital Finance as prescribed by National Bank for Agriculture and Rural Development (NABARD).
• Statutory Auditors under Value Added Tax Act of States. The list of States where Cost Accountants are authorised to conduct VAT Audit is given at Annexure-1.
(B) Opportunities Under Companies Act, 2013:
There are many opportunities for Cost Accountants under Companies Act, 2013 as follows:
• Section 2(38): An expert who has the power or authority to issue a certificate in pursuance of any law for the time being in force.
• Section 7(1)(b): Declaration in the prescribed form no. INC.8. form no.INC 14 that the memorandum and articles have been drawn as per the provisions and in conformity.
• Sections 7(1)(c), 168 & 170(2) and rule 17 of the Companies (Incorporation) Rules 2014 and8, 15 & 18 of the Companies (Appointment and Qualification of Directors) Rules, 2014- Particulars of appointment of Directors and the Key Managerial Personnel and the changes among them in form no. DIR 12.
• Section 8: Declaration that the draft memorandum and articles of association have been drawn up in conformity with the provisions of section 8 in form No. INC.14.
• Section 11(1)(a) read with Rule 24 of the Companies (Incorporation) Rules, 2014- Declaration prior to commencement of business or exercising borrowing powers in form No. INC 21.
• Section 12(2) & (4) and Rule 25 and 27 of The Companies (Incorporation) Rules 2014- Notice of situation or change of situation of registered office in form no. INC 22.
• Section 39(4) and 42 (9) and Rule 12 and 14 Companies (Prospectus and Allotment of Securities) Rules, 2014- Return of Allotment in form no. PAS 3.
• Section 64(1) and pursuant to Rule 15 of the Companies (Share Capital & Debentures) Rules, 2014 - Notice to Registrar of any alteration of share capital in form no. SH 7.
• Sections 71(3), 77, 78 & 79 and pursuant to Section 384 read with 71(3), 77, 78 and 79 and Rule 3 of The Companies ( Registration of charges) Rules 2014 Application for registration of creation or modification of charge for debentures or rectification of particulars filed in respect of creation or modification of charge for debentures in form no. CHG 9.
• Sections 77, 78 and 79 and pursuant to Section 384 read with 77, 78 and 79 and Rule 3(1)of the Companies (Registration of Charges) Rules 2014- Registration of creation, modification of charge (other than those related to debentures) including particulars of modification of charge by Asset Reconstruction Company in terms of Securitization and Reconstruction of Finance Assets and Enforcement of Securities Act, 2002 (SARFAESI) in form no. CHG 1.
• Section 82(1) and Rule 8(1) of the Companies (Registration of charges) Rules 2014- Particulars of satisfaction of charges thereof in form no. CHG 4.
• Section 94(1), 117(1) and section 192-The Companies Act, 1956- Filing of resolutions and agreements to the Registrar in form no. MGT 14.
• Section 137: Under form no.AOC-4 disclosure of related party transactions.
• Section 138(1): Internal audit of the companies(Already mentioned above).
• Section 143: Report to the Central Government if a fraud is being or has been committed against the company by officers or employees of the company.
• Section 148 (1)- Cost Audit (Already mentioned above)
• Section 149 (4) read with Rule 5 of the Companies (Appointment and Qualification of Directors) Rules, 2014: Independent Director Possess skills, experience and knowledge in one or more fields inter alia finance to be an Independent Director
• Section 153 and & Rule 9(1) of The Companies (Appointment and Qualification of Directors) Rules, 2014 & Rule 10 of Limited Liability Partnership Rules, 2009: Digital verification of the Form DIR-3: Application for allotment of Director Identification Number
• Section 196 read with Section 197 and Schedule V of the Companies Act, 2013 and pursuant to Rule 3 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014- Return of appointment of key managerial personnel in form no. MR 1.
• Section 196, 197, 200, 201(1), 203(1) and Schedule V & Rule 7 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014- Form of application to the Central Government for approval of appointment and remuneration or increase in remuneration or waiver for excess or over payment to Managing Director or Whole Time Director or Manager and commission or remuneration to Directors in form no. MR 2.
• Section 232(7): Declaration of compliance alongwith Statement to be filed with Registrar Of Companies.
• Section 247(1): Eligible to apply for being registered as a valuer.
• Section 259(1): Appointment as Company Administrator by the tribunal.
• Section 275(1): Appointment as Company liquidator for winding up of the Company.
• Section 366: Application by a company for registration in Form No. URC-1
• Section 409(3): Appointment as Technical person of Tribunal (15 years of experience is required)
• Section 432: Appearance in the Tribunal for public examination of promoters/directors.
• Section 455(1) read with Rule 3 of The Companies (Miscellaneous) Rules, 2014– Application to Registrar for obtaining the status of dormant company in form no. MSC 1.
• Section 455(5) and Rule 7 and 8 of the Companies (Miscellaneous) Rules, 2014- Return of dormant companies in form no. MSC 3.
• Rule 5(2) of Nidhi Rules, 2014- Return of statutory compliances in form no. NDH 1.
• Rule 5(3) of Nidhi Rules, 2014- Application for extension of time in form no. NDH 2.
• Rule 21 of Nidhi Rules, 2014- Half yearly return in form no. NDH 3.
• Rule 8(8) of Companies (Registration Offices and Fees) Rules, 2014: Documents or form or application filed may contain a power of attorney issued to Cost Accountant.
• Rule 12 (1) of the Companies (Appointment and Qualification of Directors) Rules, 2014- Intimation of change in particulars of Director to be given to the Central Government in form no. DIR 6.
• Rule 12(2) of the companies (Registration offices and Fees) Rules, 2014- Form for filing an application with Registrar of Companies in form no. GNL 1.
• Rule 12(3) of the Companies (Registration offices and Fees) Rules, 2014- Particulars of person(s) or key managerial personnel charged or specified for the purpose of sub-clause (iii) or (iv) of clause 60 of Section 2 in form no. GNL 3.
• Rule 20(3)(ix) of the Companies (Management and Administration) Rules, 2014: Scrutinizer for supervising the Voting through electronic means (e-voting) process.
• Rule 31 of Companies (Incorporation) Rules, 2014- Notice of the order of the Court or any other competent authority in form no. INC 28.
(C) Certification Areas
Apart from Ministry of Corporate Affairs, there are various other Ministries of Government of India who have authorized 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 & Industry, Ministry of Chemicals & Fertilizers, Ministry of Textile, Ministry of Consumer Affairs, Food & Public Distribution. The gist of the work under these Ministries is as follows:
• 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 authorized to do certification of all forms and statements, wherever certification by a Chartered Accountant was required earlier.
• 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 the Institute.
• Certificate for Average Cost of Transportation as per Rule 5 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000.
• 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
• 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.
• Certificate of product wise position of production dispatches stock etc. for the year (Annexure III-A) under FICC.
• Reporting and Audit for System on Accounting Separation- Certification Work Telecom Regulatory Authority of India (TRAI)
• Certificate of fulfillment of Hank Yarn obligation for Textile Industry and Textile Committee Cess- Monthly Return in Form-A.
• Certifying half yearly return in Form ‘N’ for Quantity of Rubber purchased & consumed by manufacturers under rule 33 (f) of the Rubber Rules, 1955.
• Certifying Performa CI & C2 under Anti Dumping as prescribed by Ministry of Commerce & Industry.
• Certifying Statement of cost of production for Anti-dumping petition to Government of India.
• Certification of Application for License and renewal thereof to act as Surveyor and Loss Assessor under Insurance Regulatory and Development Authority (IRDA).
• Certification of various forms prescribed under the Central Electricity Regulatory Commission (CERC).
• Compliance Certificate of Reserve Bank of India for Scheduled Banks/ Urban Development Banks/ Urban Co-operative Banks in respect of Consortium Arrangement / Multiple Banking Arrangements.
• Valuation Certificate for Foreign Direct Investment (FDI) in Limited Liability Partnership (LLP) under Master Circular No. 15/2014-15 dated 1st July, 2014.
• Valuation Certificate under Notification No. FEMA.298/2014-RB: Foreign Exchange Management (Transfer of Issue of Security by a Person Resident Outside India) (Third Amendment) Regulations, 2014 dated 13th March, 2014.
• Valuation Certificate as per RBI Circular No.2006-2007/224 DBOD.BP.BC No. 50 / 21.04.018/ 2006-07 dated January 4, 2007 for valuation of different classes of assets (e.g. land and building, plant and machinery, agricultural land, etc.)
• Certifying e-forms which are to be filled by Companies as directed by MCA.
(D) Other Work
Central Board of Excise and Customs (CBEC) authorizes Cost Accountants in practice for the following work:
• 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.
• Certification of refund of additional duty of Customs on the goods imported for subsequent sale under Indian Customs Act;
• 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;
• 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 authorized by provisional brand rate letters issued by the Ministry to claim the drawback rate considered admissible from the concerned Customs House (s);
• 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 inter alia from the Cost Accountant as to the consumption and cost of processing chemicals used for its processing and other incidental overhead charges incurred;
• 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;
• Accepting of services of the Cost Accountant’s may also be considered by the respective Commission rates 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;
• Certified Facilitation Centres (CFCs) - under ACES-CBEC Scheme: As per MOU with Central Board of Excise & Customs (CBEC), Ministry of Finance, Government of India, Cost Accountants in whole-time practice are authorized to set up Certified Facilitation Centres (CFCs) under Automation of Central Excise and Service Tax (ACES) 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 assesses 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.
(E) Appearance as an Authorized Representative
Cost Accountants are also empowered under various Acts promulgated in India, to appear before various Authorities/ Appellate Tribunals in connection with proceedings under the respective Act. The detail is given below:
1. Companies Act:
(i) Right to legal representation: Section 432 of the Companies Act 2013.
(ii) Rights of a party to appear before the Bench:Regulation 19(2) 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 Authorized 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 Authorized 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 Representation before Appellate Tribunal as per Section 17 of TRAI Act, 1997.
10. Value Added Tax Acts/ Rules: Cost Accountants are authorized to appear before authorities under VAT Acts/ Rules of various State Government as per Annexure-2.
Cost Accountants in Employment:
As mentioned in the beginning, the Cost Accountants are most sought in the business world. There services are deemed vital in investment planning, profit planning, project management and overall managerial decision making process. Many members of the Institute are occupying the top positions in the organizations, as Chairman & Managing Director, Managing Director, Finance Director, Financial Controller, Chief Financial Officer (CFO), Cost Controller, Marketing Manager and Chief Internal Auditor etc.
Cost Accountants in Government Department:
Realizing 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.
Further Academic pursuits:
• A member of the Institute can get enrolled as a member of IMA USA.
• Recognized by the Academic Councils of many Universities in India for the purpose of admission to the Ph.D. courses in Commerce. Various Universities have recognized CMA qualification for registration as M.Phil. and Ph.D. candidates in commerce and allied disciplines.
• The MoU between CIMA (The Chartered Institute of Management Accountants), UK and The Institute of Cost Accountants of India introduces a new CIMA Professional Gateway examination (available from May 2009) for the students who have successfully completed the whole of the Institute’s professional examination, enabling a ‘fast track’ route into CIMA’s Strategic level examinations, final tests of professional competence and ultimately CIMA Membership.
In this globalised world, organizations require professionals such as Cost Accountants (CMAs) who have specialized knowledge on business strategy and value creation. The Cost Accountant being the foundation on which the enterprises are built, the specialized education and training by the Institute make the Cost Accountant a multi-faceted professional. CMAs are driving force in all economic activities, as they are the value creator, value enabler, value preserver and value reporter.
Cost Accountants are in great demand in government sector, private sector, banking & finance sector, developmental agencies, education, training & research sector as well as in service and public utility sector. Further, in view of their specialized knowledge and training, CMAs may hold top management position in public and private sectors’ enterprises like Chairman cum Managing Directors, Managing Director, Finance Director, Financial Controller, Chief Financial Officer, Cost Controller, Marketing Manager and Chief Internal Auditor and other important positions.
Those CMAs managing their own businesses have found themselves as a Manager and as an Accountant can control and thereby 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, Internal Auditors, Auditors in case of VAT, Excise, SEBI, NSDL and under other statutes/ Regulatory requirements, 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.cmaicmai.in/external/Home.aspx. 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. For practicing Cost Accountants the Institute issued suggested fees guidelines, which may be seen athttp://www.cmaicmai.in/external/Home.aspx.
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 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 (Special Audit v/s 14A & 14AA Central Excise Act 1944)
• Concurrent Audit
• Special Audit of Service Tax v/s 72 A.
(A) Audit and other Work- Cost Audit, Compliance Report and Maintenance of Cost Accounting Records
Cost Audit
Consequent upon enactment of Companies Act, 2013 which has replaced the Companies Act, 1956, the Ministry of Corporate Affairs vide G.S.R. No. 425 (E) dated 1st July, 2014 notified Companies (Cost Records and Audit) Rules, 2014 under section 148(2), ibid. These rules are effected from 1st April, 2014, applicable from Financial Year 2014-15.
The Companies which were covered under the Cost Audit as per Rules notified prior to the said notification dated 1st July 2014, are required to conduct the Cost Audit under the Rules notified by the Government prior to this Notification.
As per Rules, the Cost Audit can be done only by the Cost Accountant in Practice or Firm of Cost Accountants. Appointment of Cost Auditor by the companies is made as per provisions in the respective Rules.
Compliance Report
Some of the companies have not submitted the Compliance Report, as applicable under the Companies (Cost Accounting Records) Rules, 2011, to the Government. The opportunities are still available to certify the Compliance Report under these Rules. 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
As per Companies (Cost Records and Audit) Rules, 2014, the class of companies which also include foreign companies, are required to maintain “Cost Records”. Cost Records in terms of these rules means books of accounts relating to utilization of materials, labour and other items of Cost as applicable to the production of goods or provisions or services as provided in Section 148 of Companies Act, 2014. As per Rules the cost records are to be maintained by the companies on regular basis in such manner as to facilitate calculation of 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 or quarterly or half-yearly or annual basis. Further, the companies are required to maintain the Cost Records in such manner so as to enable them to exercise control over the various operations and costs to achieve optimum economies in utilisation of resources and these records shall also provide necessary data which is required to be furnished under these rules.
In view of above provisions, Cost accountant in practice may assist the company to maintain the Cost Records and Compliance Report.
Internal Audit and Other Audits
• Section 138(1) of the Companies Act, 2013 empowers the Cost Accountants/Firms of Cost Accountant to conduct the Internal Audit of the Class of Companies. Companies (Accounts) Rules, 2014 issued by the Government vide GSR 239 (E) dated 31st March, 2014 defines the class of companies in which the Cost Accountants/Firms of Cost Accountant can be appointed/empanelled as Internal Auditor.
• 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).
• Internal Audit/Concurrent Audit under National Health Mission(NHM) as empowered by the Ministry of Health & Family Welfare, New Delhi.
• Internal Audit of many State Public Center Enterprises (SPSEs).
• Internal Audit of many Public Sector Enterprises (PSEs), Public and Private limited companies.
• Internal Audit of Cooperative Societies in States.
• Special Audit under Section 14A & 14AA of the Central Excise Act 1944 of Central Board of Excise and Customs (CBEC).
• Special Audit in certain cases under Section 11 of Customs Act, 1962, as authorized by CBEC.
• Audit for Metering and Billing Accuracy- authorised to conduct audit for Telecom Regulatory Authority of India (TRAI).
• Stock Audit of many Public Sector and Private Sector Banks in India.
• Stock audit for Working Capital Finance as prescribed by National Bank for Agriculture and Rural Development (NABARD).
• Statutory Auditors under Value Added Tax Act of States. The list of States where Cost Accountants are authorised to conduct VAT Audit is given at Annexure-1.
(B) Opportunities Under Companies Act, 2013:
There are many opportunities for Cost Accountants under Companies Act, 2013 as follows:
• Section 2(38): An expert who has the power or authority to issue a certificate in pursuance of any law for the time being in force.
• Section 7(1)(b): Declaration in the prescribed form no. INC.8. form no.INC 14 that the memorandum and articles have been drawn as per the provisions and in conformity.
• Sections 7(1)(c), 168 & 170(2) and rule 17 of the Companies (Incorporation) Rules 2014 and8, 15 & 18 of the Companies (Appointment and Qualification of Directors) Rules, 2014- Particulars of appointment of Directors and the Key Managerial Personnel and the changes among them in form no. DIR 12.
• Section 8: Declaration that the draft memorandum and articles of association have been drawn up in conformity with the provisions of section 8 in form No. INC.14.
• Section 11(1)(a) read with Rule 24 of the Companies (Incorporation) Rules, 2014- Declaration prior to commencement of business or exercising borrowing powers in form No. INC 21.
• Section 12(2) & (4) and Rule 25 and 27 of The Companies (Incorporation) Rules 2014- Notice of situation or change of situation of registered office in form no. INC 22.
• Section 39(4) and 42 (9) and Rule 12 and 14 Companies (Prospectus and Allotment of Securities) Rules, 2014- Return of Allotment in form no. PAS 3.
• Section 64(1) and pursuant to Rule 15 of the Companies (Share Capital & Debentures) Rules, 2014 - Notice to Registrar of any alteration of share capital in form no. SH 7.
• Sections 71(3), 77, 78 & 79 and pursuant to Section 384 read with 71(3), 77, 78 and 79 and Rule 3 of The Companies ( Registration of charges) Rules 2014 Application for registration of creation or modification of charge for debentures or rectification of particulars filed in respect of creation or modification of charge for debentures in form no. CHG 9.
• Sections 77, 78 and 79 and pursuant to Section 384 read with 77, 78 and 79 and Rule 3(1)of the Companies (Registration of Charges) Rules 2014- Registration of creation, modification of charge (other than those related to debentures) including particulars of modification of charge by Asset Reconstruction Company in terms of Securitization and Reconstruction of Finance Assets and Enforcement of Securities Act, 2002 (SARFAESI) in form no. CHG 1.
• Section 82(1) and Rule 8(1) of the Companies (Registration of charges) Rules 2014- Particulars of satisfaction of charges thereof in form no. CHG 4.
• Section 94(1), 117(1) and section 192-The Companies Act, 1956- Filing of resolutions and agreements to the Registrar in form no. MGT 14.
• Section 137: Under form no.AOC-4 disclosure of related party transactions.
• Section 138(1): Internal audit of the companies(Already mentioned above).
• Section 143: Report to the Central Government if a fraud is being or has been committed against the company by officers or employees of the company.
• Section 148 (1)- Cost Audit (Already mentioned above)
• Section 149 (4) read with Rule 5 of the Companies (Appointment and Qualification of Directors) Rules, 2014: Independent Director Possess skills, experience and knowledge in one or more fields inter alia finance to be an Independent Director
• Section 153 and & Rule 9(1) of The Companies (Appointment and Qualification of Directors) Rules, 2014 & Rule 10 of Limited Liability Partnership Rules, 2009: Digital verification of the Form DIR-3: Application for allotment of Director Identification Number
• Section 196 read with Section 197 and Schedule V of the Companies Act, 2013 and pursuant to Rule 3 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014- Return of appointment of key managerial personnel in form no. MR 1.
• Section 196, 197, 200, 201(1), 203(1) and Schedule V & Rule 7 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014- Form of application to the Central Government for approval of appointment and remuneration or increase in remuneration or waiver for excess or over payment to Managing Director or Whole Time Director or Manager and commission or remuneration to Directors in form no. MR 2.
• Section 232(7): Declaration of compliance alongwith Statement to be filed with Registrar Of Companies.
• Section 247(1): Eligible to apply for being registered as a valuer.
• Section 259(1): Appointment as Company Administrator by the tribunal.
• Section 275(1): Appointment as Company liquidator for winding up of the Company.
• Section 366: Application by a company for registration in Form No. URC-1
• Section 409(3): Appointment as Technical person of Tribunal (15 years of experience is required)
• Section 432: Appearance in the Tribunal for public examination of promoters/directors.
• Section 455(1) read with Rule 3 of The Companies (Miscellaneous) Rules, 2014– Application to Registrar for obtaining the status of dormant company in form no. MSC 1.
• Section 455(5) and Rule 7 and 8 of the Companies (Miscellaneous) Rules, 2014- Return of dormant companies in form no. MSC 3.
• Rule 5(2) of Nidhi Rules, 2014- Return of statutory compliances in form no. NDH 1.
• Rule 5(3) of Nidhi Rules, 2014- Application for extension of time in form no. NDH 2.
• Rule 21 of Nidhi Rules, 2014- Half yearly return in form no. NDH 3.
• Rule 8(8) of Companies (Registration Offices and Fees) Rules, 2014: Documents or form or application filed may contain a power of attorney issued to Cost Accountant.
• Rule 12 (1) of the Companies (Appointment and Qualification of Directors) Rules, 2014- Intimation of change in particulars of Director to be given to the Central Government in form no. DIR 6.
• Rule 12(2) of the companies (Registration offices and Fees) Rules, 2014- Form for filing an application with Registrar of Companies in form no. GNL 1.
• Rule 12(3) of the Companies (Registration offices and Fees) Rules, 2014- Particulars of person(s) or key managerial personnel charged or specified for the purpose of sub-clause (iii) or (iv) of clause 60 of Section 2 in form no. GNL 3.
• Rule 20(3)(ix) of the Companies (Management and Administration) Rules, 2014: Scrutinizer for supervising the Voting through electronic means (e-voting) process.
• Rule 31 of Companies (Incorporation) Rules, 2014- Notice of the order of the Court or any other competent authority in form no. INC 28.
(C) Certification Areas
Apart from Ministry of Corporate Affairs, there are various other Ministries of Government of India who have authorized 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 & Industry, Ministry of Chemicals & Fertilizers, Ministry of Textile, Ministry of Consumer Affairs, Food & Public Distribution. The gist of the work under these Ministries is as follows:
• 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 authorized to do certification of all forms and statements, wherever certification by a Chartered Accountant was required earlier.
• 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 the Institute.
• Certificate for Average Cost of Transportation as per Rule 5 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000.
• 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
• 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.
• Certificate of product wise position of production dispatches stock etc. for the year (Annexure III-A) under FICC.
• Reporting and Audit for System on Accounting Separation- Certification Work Telecom Regulatory Authority of India (TRAI)
• Certificate of fulfillment of Hank Yarn obligation for Textile Industry and Textile Committee Cess- Monthly Return in Form-A.
• Certifying half yearly return in Form ‘N’ for Quantity of Rubber purchased & consumed by manufacturers under rule 33 (f) of the Rubber Rules, 1955.
• Certifying Performa CI & C2 under Anti Dumping as prescribed by Ministry of Commerce & Industry.
• Certifying Statement of cost of production for Anti-dumping petition to Government of India.
• Certification of Application for License and renewal thereof to act as Surveyor and Loss Assessor under Insurance Regulatory and Development Authority (IRDA).
• Certification of various forms prescribed under the Central Electricity Regulatory Commission (CERC).
• Compliance Certificate of Reserve Bank of India for Scheduled Banks/ Urban Development Banks/ Urban Co-operative Banks in respect of Consortium Arrangement / Multiple Banking Arrangements.
• Valuation Certificate for Foreign Direct Investment (FDI) in Limited Liability Partnership (LLP) under Master Circular No. 15/2014-15 dated 1st July, 2014.
• Valuation Certificate under Notification No. FEMA.298/2014-RB: Foreign Exchange Management (Transfer of Issue of Security by a Person Resident Outside India) (Third Amendment) Regulations, 2014 dated 13th March, 2014.
• Valuation Certificate as per RBI Circular No.2006-2007/224 DBOD.BP.BC No. 50 / 21.04.018/ 2006-07 dated January 4, 2007 for valuation of different classes of assets (e.g. land and building, plant and machinery, agricultural land, etc.)
• Certifying e-forms which are to be filled by Companies as directed by MCA.
(D) Other Work
Central Board of Excise and Customs (CBEC) authorizes Cost Accountants in practice for the following work:
• 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.
• Certification of refund of additional duty of Customs on the goods imported for subsequent sale under Indian Customs Act;
• 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;
• 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 authorized by provisional brand rate letters issued by the Ministry to claim the drawback rate considered admissible from the concerned Customs House (s);
• 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 inter alia from the Cost Accountant as to the consumption and cost of processing chemicals used for its processing and other incidental overhead charges incurred;
• 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;
• Accepting of services of the Cost Accountant’s may also be considered by the respective Commission rates 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;
• Certified Facilitation Centres (CFCs) - under ACES-CBEC Scheme: As per MOU with Central Board of Excise & Customs (CBEC), Ministry of Finance, Government of India, Cost Accountants in whole-time practice are authorized to set up Certified Facilitation Centres (CFCs) under Automation of Central Excise and Service Tax (ACES) 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 assesses 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.
(E) Appearance as an Authorized Representative
Cost Accountants are also empowered under various Acts promulgated in India, to appear before various Authorities/ Appellate Tribunals in connection with proceedings under the respective Act. The detail is given below:
1. Companies Act:
(i) Right to legal representation: Section 432 of the Companies Act 2013.
(ii) Rights of a party to appear before the Bench:Regulation 19(2) 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 Authorized 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 Authorized 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 Representation before Appellate Tribunal as per Section 17 of TRAI Act, 1997.
10. Value Added Tax Acts/ Rules: Cost Accountants are authorized to appear before authorities under VAT Acts/ Rules of various State Government as per Annexure-2.
Cost Accountants in Employment:
As mentioned in the beginning, the Cost Accountants are most sought in the business world. There services are deemed vital in investment planning, profit planning, project management and overall managerial decision making process. Many members of the Institute are occupying the top positions in the organizations, as Chairman & Managing Director, Managing Director, Finance Director, Financial Controller, Chief Financial Officer (CFO), Cost Controller, Marketing Manager and Chief Internal Auditor etc.
Cost Accountants in Government Department:
Realizing 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.
Further Academic pursuits:
• A member of the Institute can get enrolled as a member of IMA USA.
• Recognized by the Academic Councils of many Universities in India for the purpose of admission to the Ph.D. courses in Commerce. Various Universities have recognized CMA qualification for registration as M.Phil. and Ph.D. candidates in commerce and allied disciplines.
• The MoU between CIMA (The Chartered Institute of Management Accountants), UK and The Institute of Cost Accountants of India introduces a new CIMA Professional Gateway examination (available from May 2009) for the students who have successfully completed the whole of the Institute’s professional examination, enabling a ‘fast track’ route into CIMA’s Strategic level examinations, final tests of professional competence and ultimately CIMA Membership.
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23 September 2014
List shared by Expert is really exhaustive & will help to other readers.
Thanks for sharing.
Thanks for sharing.
05 October 2014
There is no lack of opportunities if CMA nowadays. So just move ahead with confidence and complete your professional study.
All the best
All the best
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