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ICWAI: Open door system for entry after graduation

The Kolkata-based Institute of Cost and Works Accountants of India (ICWAI) has drawn up a road map for global recognition of the Institute so that students from other countries can join the course. “Our focus will be on e-learning so that foreign students can study,” said Chandra Wadhwa, president of the Institute, speaking to Business Line. Read More

Govt to scrap cost audit in select sectors

The government is set to exempt a host of industries in the manufacturing sector from mandatory cost audits. The sensitive operational details of industries that are set to go off the government’s penetrating gaze include synthetic textiles, engineering, power transmission and distribution, chemicals, cosmetics, all electronic products and telecommunication gadgets. Read More

Is the ‘impairment’ standard beyond repair?

In ‘A Midsummer Night’s Dream’ the Bard describes, through Hermia, how nature compensates impairment, thus: “Dark night, that from the eye his function takes, the ear more quick of apprehension makes; wherein it doth impair the seeing sense, it pays the hearing double recompense.” Read More

Rwanda: Adopt International Accounting Standards - AG

The Auditor General (ag), Evelyn Kamagaju, has urged both public and private institutions to adopt international financial reporting standards (IFRS).

Once IFRS is adopted, it is hoped will improve corporate governance, create credibility of financial reporting and improve trade trends in the country. Read More

IRREGULARITIES IN THE ICAI

As a general practice, issues, if any, raised in respect of the functioning of the Institute of Chartered Accountants of India (ICAI) from any quarter are looked into by the Government and the Institute to ascertain facts and to take action as warranted under the Chartered Accountants Act, 1949. There is no finding of manipulation in declaration of the results of the examinations conducted by the Institute. Recently on receipt of information pertaining to leakage of the question paper for the Common Proficiency Test (CPT) examination scheduled for 05th August, 2007, the examination in its entirety was cancelled by the Institute and in its place a fresh examination is scheduled to be held on 26th August, 2007. Read More

Costing body plans `accounting technicians’ course

In addition to the present shortage of 25,000 qualified finance professionals, there will be a demand for 10 lakh accountancy-trained personnel in the next 10 years at a the junior level, says Mr Chandra Wadhwa, the newly elected President of the Institute of Cost and Works Accountants of India (ICWAI). “We are in the process of introducing a certificate course for Accounting Technicians to meet the shortage,” he adds, speaking to Business Line.

A practising cost accountant in New Delhi, Mr Wadhwa is the Chairman of the Task Force formed by the Ministry of Corporate Affairs (MCA) for The Institute of Valuers, Member of the Committee formed by the Ministry of Commerce on Indo-UK Accountancy Sector, Member of the Committee formed by the MCA on Opening of Accountancy Sector in GATS regime, and Member of the Committee of CII on WTO.

Excerpts from an interview:

In what ways is the ICWAI different today from two decades ago?

Two decades ago cost accountancy was tied up with manufacturing. Today, cost management and strategic decision-making are in every aspect of manufacturing and service sectors. Under the WTO regime, world markets are getting integrated and cost and management functions will play decisive roles. With technology revolution in computers, the business environment has changed tremendously, widening the profession’s reach and changing its focus.

What do you see as the impact of MDP?

In 2006, the Government amended the Cost and Works Accountants Act, 1959, the Chartered Accountants Act, 1949 and the Company Secretaries Act, 1980. The stage is now set for multidisciplinary partnership (MDP) firms with revenue, profit and fees sharing among professionals. Further, the concept of multidisciplinary partnership and services has been recognised in the LLP (Limited Liability Partnership) Bill 2006 introduced in Parliament. Once it becomes an Act, it will promote horizontal and vertical integration of various firms. I feel it offers a golden opportunity to cost accountants to venture into new areas with other professionals.

What are the new costing standards that the Institute is working on?

So far the Institute has issued six Cost Accounting Standards, namely, CAS-1 Classification of Cost, CAS-2 Capacity Determination, CAS-3 Overheads, CAS-4 Cost of Production for Captive Consumption, CAS-5 Average (Equalised) Cost of Transportation, and CAS-6 Determination of Arm’s Length Price.

The Institute decided recently to focus on developing cost accounting standards. Issues such as joint product and by-product costs, segregation of input tax credits, research and development costs, cost aspects in inventory valuation and service costs have been identified by the Cost Accounting Standards Board.

Is the ICWAI currently studying any industry? Any research on the cement and steel industries which have been in the news lately?

The ICWAI is planning to benchmark different products in terms of cost, productivity, etc. For this purpose, our Council has constituted a Committee on Benchmarking, which will select the products to be benchmarked. No research work has been done on cement and steel industries but the Committee on Benchmarking will consider taking up these industries.

How actively are you in resisting foreign bodies such as the CIMA, London, from conducting exams in India?

As per the Cost and Works Accountants Act, no accounting body can award degree, diploma or certificate in cost management without affiliation to or recognition from our Institute. CIMA-UK began its activity in India, which we resisted. However, they have approached us for MRA (Mutual Recognition Arrangement), and we are currently considering their request.

Has the ICWAI name-change issue been resolved?

No, the issue is still unresolved. At present, cost and management accounting is no longer limited to manufacturing functions.

Do you think that investors’ interests can be served better by new-age costing-related disclosures in annual reports?

Costing-related disclosure means a performance report that is not limited to financial results but includes in-depth analysis of efficiencies in critical areas. This can offer a better picture to the investors. New-age, costing-related disclosures such as product-wise margins, standard consumption norms, utility consumption, etc., would serve better the investors’ interests.

Are the new economy products/services rightly priced? For example, telecom services. Are consumers overpaying because of lack of transparency of service costs?

In a liberalised economy, high-profit-yielding products or services attract other players, leading to competition. Individual service providers then attract customers by offering freebies and incentives. In the telecom sector, TRAI has introduced detailed cost audit as well as billing and metering audit for better transparency and “value for money” for consumers.

How can costing of public services be made more effective?

In the US, the UK and Canada, professionals are appointed for cost-auditing electricity, utilities, civic amenities, health and education. In India, this awareness is increasing and cost audit orders have been issued for electricity companies. The Institute has taken up cost studies of various public utility services.

Farm products haven’t been priced efficiently enough to offer good returns to farmers. Do we cost farm products right? The problem may worsen with MNCs entering food, fruit, and vegetable retail.

Price rise in farm products is low compared to industrial products because farmers get subsidised inputs. The main reason for poor returns to farmers is because of the presence of middlemen and lack of a proper distribution network.

As agriculture is in the unorganised sector, proper costing has not been done. With the entry of MNCs into agricultural retailing, the problem will aggravate as they will buy products cheap, hoard them with advanced technology and sell at times of shortage to make huge profits.

On the road ahead.

A delegation from CIMA-UK and CMA-Canada visited India recently and we are working on entering into MRAs with them.

The MCA has hosted a concept paper on the Council of Valuation Professionals of India on its Web site, inviting comments from public. In the concept paper, our Institute has been considered as the Recognised Institute. By virtue of this recognition, our members will have an opportunity to opt for the new area of practice.

The ICWAI intends to introduce specialised post-qualification courses on Valuation, Financial Services, and Systems Audit for members.

We are organising a global summit on management accounting in January 2008 in Delhi where the father of Activity-Based Costing (ABC), Prof Robert Kaplan, will participate. Our co-hosts will be the institutes from Pakistan, Bangladesh and Sri Lanka, while IMA-US, CMA-Canada and CIMA-UK will be technical partners.

D. MURALI
GOUTAM GHOSH

Source: Hindu Business News Line

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Should a ‘tax balance sheet’ capture ‘deferred’ items?

Accounting Standard-22 (AS-22) is an important standard for presentation of true and fair view of accounts on any particular date, as it provides guidance for accounting of various aspects of taxation in a unified manner, says Mr S. Gopalakrishnan, Partner, Lovelock & Lewes. Read More

Auditors need greater third party access

A new paper put out by the ICAEW-backed Audit Quality Forum has argued that auditors be given access to ’sufficient audit evidence to form an independent opinion’ after warning of the adverse impact third parties can have on financial statements. Read More

ACCA launches report on climate change reporting

Businesses have to improve considerably reporting on the impacts their operations and products have on climate change, a report published by ACCA (the Association of Chartered Certified Accountants) reveals. Read More

Japanese GAAP to Converge with IFRS

Japanese GAAP is moving closer to International Financial Reporting Standards under an agreement that will accelerate the process. Read More

Regards,

Santosh Puthran
AICWA

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I was browsing the websites of ICWAI, ICSI and ICAI to know about how they expect the members, students and general public to order their publications, I was quite surprised that there was little information on their websites. ICSI was better than her counterparts where they had a order form which was available for download and print. After filling up the details, the form can be sent to the institute along with the cheque. It is too long a process to order !!!

I remember in my student days, I had to commute to the WIRC to buy the Study Notes at a particular time of the day. If they were available in stock, then you could buy them or else you had to wait. Same with the institute publications for Cost Audit Record Rules, most of them were out of stock. I think, it was no different for a student of ICAI. What a sheer waste of time, travelling from one end of city to other and then you find the book is not in stock. At that time, the telephones were not answered. I hope the situation have changed now !!!

I feel our institutes should outsource the job of managing publications to a publication companies who have the resources to manage sales through internet and shops.

For eg.

Student Study Notes : The study notes should be a mix of Theory, Practise Questions & Answers and Revision Notes (3 books to be purchased separately) so that it gives a student a proper diet about the subject. Institute should have one or two authorised publishers and a panel that reviews that authorised publishers study text are as per standards set by the institute. See how ACCA manages their approved text book publishers.

The institute should approve the publishers based

• Quality of writers they have
• Infrastructure to manage selling the publications viz. internet/outlet sales
• Royalty on sales

With this approach, our institutes will be able to devote their energies in other areas. Moreover students will be able order study texts on phone or internet and get it to their door step.

PS: I found the Management Accounting Book by Saxena Vashist & Accounting by Maheshwari sheer waste of time to read. They are considered a bible in student community, but our institute publications were much better since they explained the concepts.

The list of books that were recommended either contained too much or too little or they were too vague for ICWAI syllabus. So it is difficult for the student to answer since his basics are not clear and he had been solving problems and solutions from these books.

Research and other Publications:

Currently all these publications are bought from institutes’s offices by visiting them. The pdf version should be available for download and purchase on the institute website. Similarly publications should be made available to order online or by phone. This would save time for both members and institutes.

I feel that Indian Accounting bodies should streamline their operations so that they are user friendly for their stake holders. Good IT infrastructure will help them to manage their operations and one call centre and a single number to call from anywhere in the world would help their stakeholders. Arrangement with VOIP (internet telephony) companies will help them to bring down the telecommunication costs since a person from Nagpur or Kochi or New Delhi will call the same number to get connected to the call centre and costs will be same irrespective of distance.

Cheers,

Santosh Puthran
AICWA

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1. IT posts on MA Blog

Internet Tips

Do you forget the link of websites that you want to use. Organise it on Yahoo Bookmarks
And then access your bookmarks from any computer - home or work

In last century when the telephone was introduced in the workplace, people were sceptical of the real use of the invention. Old timers considered it a nuisance when they felt they can walk around and talk to people face to face. And now, imagine your office without a telephone !!!… I guess it must be beyond your imagination to consider not having one.

Now in this century, it is Instant Messaging and Net Meeting on your desktops. Some employers feel that Instant Messenger (IM) will make their employees to avoid work and for employees, it may be a intrusion of privacy. I feel that is one the best thing to happen at workplace to communicate on real time and save the cost to the business when communicating with people who are spread across the globe.

Most of the IM are freely downloadable and installed on your desktop. The IMs that will more popular will be those which you can use it on Internet browser.

Yahoo Messenger

Or you can have it on your website. Google Talk

Another good thing happened is talking on internet. You can talk on Yahoo Messenger or Google Talk or MSN Messenger or Skype pc-to-pc free of cost across the globe. You can talk for hours together without even billed for telephone charges. The video chat helps you to see other person. The internet cost is fraction of cost compared to telephone costs.

Most of the IT companies have official IM for communication. And the communication/approvals made on IM is considered official. Net Meeting is one of the best software in the marketplace and MSN messenger also has the feature to share desktops. You can have net conference with people sitting across the different geographical areas. This helps to get communication across with fraction of costs.

If you are accountancy firm or a business are you ready for Instant Messaging. Don’t worry about employees misusing IM…. same happens for telephone lines…. The best you do is to get more business… provide more work to employees and make them use the IM for your business.

Cheers,

Santosh Puthran

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1. iGoogle
2. RSS feeds - How it helps you to remain updated

Internet Tips

The best scratch pad available when your browse internet is Google Notebook. You can access it anywhere and share them

I have been exploring ways how to enhance the value of MA blog to readers. You may have noticed that there are changes on the layout and contents of the blog. I receive feedback from the readers by email and I try to incorporate those keeping in mind that they benefit the readers in general. Similarly RV posts good articles on Accountancy and happenings around the world.

Each time you visit MA blog, you will find updates on

• Accounting News
• Management Accounting (if ICWAI is in news everyday, you will find that it would be updated)
• Finance Jobs
• SAP Jobs

You will also notice as you do a page down on the blog, there are news updates from Financial Times, UK, Economic Times & Financial Express so you get the best diet in Finance & Accounting.

I thought of removing Finance Jobs from the contents several times as I feel that you may be keeping track of it anyway through your own sources. But then I felt that it should remain on the blog to make it look complete. However if you feel that they occupy space, you may comment on the blog.

As a rule, when you start doing something, you start to learn new things and new ways of doing it. I noticed a website that provides video feeds for the website and I incorporated on the MA blog. One of the best thing is that they show a demo of “How the Stuff Works”. For those readers, who are inquisitive about it, should play the videos which is at the bottom of the MA blog.

One of the motto of MA blog is “Help Us to Help You”. Please provide your comments wherever necessary and we will make it a point to meet upto your expectations and make positive contributions to our profession.

Regards,

Santosh Puthran
AICWA

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1. iGoogle - Your friend, philosopher and guide
2. IT posts on MA Blog
3. ICWAI applies for name change
4. The word “Chartered” hot debate in India

PS: A letter written by President & Chairman - Committee for Change of Name of the ICWAI Institute to Honorable Minister of Corporate Affairs on July 1, 2007 highlights two points

1. changing name of our Institute to “The Indian Institute of Cost & Management Accountants” and
2. deleting the word “CHARTERED” from the name of Institute of Chartered Accountants of India.

The first request for name change of ICWAI has been outstanding for long time and the second request for change in name of ICAI has just begun. - Blogging Helps !!!