Cost Accounting


Every profession have its core competency. What is our core competency? In my opinion, our core competency is Cost Accounting which at its advance stage leads to Managerial Cost Accounting – Cost Accounting for internal reporting for use by management. Cost records mandated under rules are minimum requirement which can serve as a foundation for building Total & Strategic Cost Management structure for internal use. But somehow a bogue is created that cost records & cost audit will give confidential data to Government and the result is opposition to cost records and cost audit.

Unfortunately CMA fraternity& ICAI – CMA are not fully succeeded to counter the opposition and convince the stake holders about benefit to overall economy under competition. In addition to this CMA fraternity with a few exceptions have not developed competency levels beyond routine cost records & cost audit. This has given further boost to the opposition to cost audit. This has also resulted in situation where it seems even in our core competency areas,CMAs & ICAI –CMA are being driven out by sister professionals.

What lesson the CMA fraternity should learn from this?

First requirement is to build competency beyond cost records & cost audit without discarding cost records & cost audit as useless. Senior CMAs have to guide & assist ICAI-CMA to dovetail the mandated cost records with the operational needs of the manufacturing & service industries. The task is not easy & a challenging one. But ICAI-CMA should take lead in this matter.

Another aspect of the situation is CMAs in practice. Majority of CMAs & CMA firms have expertise in Cost Audit. CMAs having expertise in ABC,Total Cost Management, Strategic Cost Management, etc. are having “Solo Practice” or are attached to “BIG-4” & so their contribution is counted under BIG-4 name. Why can’t be their “Make in India” by Indian Firms in Financial & Consultancy services by Indian Firms? Why we can’t convince GOI & Industry Associations that “We Can Make It”?