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Cost & Management Accounting (CMA)

Before liberalisation of Indian Economy, career in finance was perceived as a back office record keeping job; but after the liberalisation it has become much more challenging and interesting. Today, it is seen as a career that provides greater roles in decision making, planning and controlling operations in any organisation.

Acquiring an appropriate professional qualification is the first positive step towards a successful career in Finance. In India the three professional bodies offering finance-related professional course are-

Institute

Course

Institute of Chartered Accountants of India Chartered Accountant – CA
Institute of Cost Accountants of India Cost & Management Accountant – CMA
Institute of Company Secretaries of India Company Secretary – CS

No doubt, Chartered Accountancy course has enjoyed wide popularity but CMA and CS courses too have been gaining popularity over the last few years. Particularly, growth in numbers of students enrolled for CMA is far more than any other course in India. This is because of cost awareness amongst the business entrepreneurs due to growing competition in the market, and this has resulted in increased demand for CMA.

Although all three course are good and guarantees a secure future but I would limit my article to “Career as a CMA” – as a lot have already been written about the other two courses.

Cost & Management Accountant (CMA)

A CMA is a person who performs services involving costing, pricing of goods and services, verification or certification of Cost Records and Taxation, especially in Indirect Taxation.

Unlike pure accounting professionals, the demand for CMA cuts across functions in all organizations. In marketing department, he is required to prepare the quotation, in production department he is required to advice on the profitable product mix, in purchase department for taking make or buy decisions and in top management for identifying business risks and their mitigation.

Not only are these, CMAs also working in the fields of Taxation, Valuation, Risk Management, etc. We may, therefore, say, CMAs are ALLROUNDERS rather than mere batsmen or bowlers.

 

Role of CMA in brief

  • Improving Cost Competitiveness
  • Resource & Performance Management
  • Financial Reporting and Strategy
  • Cost Audit and Assurance
  • Direct and Indirect Taxation
  • Internal Audit & Management Audit

Employment options

CMAs in Job

Earlier only Public Sector Undertaking (PSU) Companies offered job to CMAs, but in the last few years trends have changed. Now almost all enterprises/ companies show their interest in giving job to CMAs. It has shown in Institutes’ campus placement where, apart from PSUs, companies such as ITC, ICICI Bank, IDBI Bank, Wipro, Ashok Leyland, Ford etc. are regular recruiters.

Nowadays, with multi-product ventures taking place, it has become important to know and understand the exact cost of every product and service at different stages to minimize the expenditure incurred on them and to ensure optimum utilization of resources. This is where the role of Cost Accountant comes and that is the reason behind increase in demand of the CMAs.

As mention above, a CMA is an ALLROUNDER rather than mere a batsman or a bowler, -apart from cost related assignments, we find CMAs doing jobs as Manager – Taxation, Manager – Accounts, Manager – Credit etc in many companies. Many CMAs are holding top management positions, viz., Managing Director, Finance Director, Financial Controller, Cost Controller, Chief Internal Auditor, CEO, CFO etc.

Besides this, the Institute of Cost Accounts (ICAI) has entered into MoUs with many accounting bodies across the Globe which is creating job opportunities for CMAs abroad too.

Cost Accountants in Government Department:

Realising 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 (ICAS) 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. CMAs are eligible for Indian Cost Accounts Service/Job.

Cost Accountants in Education:

& University Grants Commission (UGC) has notified, CMA with First Class Graduation can be appoint as Assistant Professor in universities and colleges in the area of Management/ Business Administration.

& Various Universities (36 till today) have recognized CMA qualification for the purpose of admission in PhD in Commerce. It enables CMAs to pursue PhD without any master degree.

Practice as Cost Accountant

In the job market both professional accountant i.e. CA and CMA, are treated as equivalent. It is in the field of practice, in which CAs has more scope than CMAs but this situation is changing too, – all thanks to Notifications and Cost Orders issued by Ministry of Corporate Affairs (MCA).

Some of the services offered by practicing CMAs are listed below:

Maintenance of Cost Records

Every company on which Companies (Cost Accounting Records), Rules 2011 (CARR 2011) apply, (Covering Lakhs of Companies) shall keep Cost Records on regular basis and submit a Compliance Report, in respect of each of its financial year duly certified by a Cost Accountant, to the Central Government.

CostAudit

Almost all organizations / industries engaged in Production, Processing, Manufacturing, Mining to which CARR 2011 applies are now covered under Annual Cost Audit (MCA order 52/26/ CAB 2010 dated 06Nov 12). Only Cost Accounts are authorized to sign Cost Audit Report.

Audit and other Work

The Cost Accountants are authorised to conduct audit and other as follows:

Value Added Tax

States have authorised Cost Accountants for auditing, certification of returns and to appear as authorised representative on behalf of their clients under the relevant Acts.

Central Board of Excise and Customs (CBEC)

1. Special Audit under Central Excise Act 1944, Customs Act, 1962 and Service Tax;

2. Certification of refund of Additional Duty of Customs (CVD);

3.    Certificate of Cost of production of captive consumed goods as per Rule 8 of Central Excise Act, 1944 in accordance with CAS-4.

4.    Certificate for Average Cost of transportation as per Rule 5 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000.

5.    Certifying Performa CI & C2 and Statement of cost of production under Anti Dumping as prescribed by Ministry of Commerce;

6.    As per MOU with CBEC, CMAs are authorised to act as facilitators under CFC Scheme in filing various Excise and Service Tax Returns.

7. Under Fixation of brand rate of Drawback without pre-verification – drawback rates should be duly verified by CA / CMA;

8. Under Customs & Central Excise Duties Drawback Rules, 1995, exporters should furnish a certificate from CA / CMA as to consumption and cost of processing chemicals used for its processing;

Ministry of Corporate Affairs (MCA)

& MCA has authorized CMAs for certification of returns and various forms required by a company from its Incorporation to Liquidation. CMAs are also authorized to appear as authorized representatives on behalf of their clients before Company Law Board.

&  Ministry of Corporate Affairs, have authorized CMAs in practice to act as Certifying Filing Centers on their behalf for purpose of certification of various type of e-forms and their filing with Registrar of Companies periodically as per provisions of Indian Companies Act, 1956 and Limited Liability Partnership (LLP);

Foreign Trade Policy

CMAs can certify DGFT Documents under Foreign Trade Policy.Under the EXIM Policy and Procedure, CMAs can certify all Documents which are required by Exporters.

Securities Exchange Board of India (SEBI)

Half-yearly Internal Audit of Stock Brokers and Credit Rating Agencies as prescribed by the Securities Exchange Board of India (SEBI)

Central Board of Direct Taxes (CBDT)

Parliament Standing Committee has suggested inclusion of Cost Accountants in “Accountant” definition under Direct Tax Code. This will authorized CMA to do Tax Audit.

National Securities Depository Ltd (NSDL)

Internal and Concurrent Audit for depository operations under National Securities Depository Ltd (NSDL)

Insurance Regulatory and Development Authority (IRDA)

Certification of Application for License and renewal thereof to act as Surveyor and Loss Assessor under Insurance Regulatory and Development Authority.

Central Electricity Regulatory Commission (CERC)

Certification of various forms prescribed under the Central Electricity Regulatory Commission.

Reserve Bank of India

  • & Compliance Audit for the purpose lending under Consortium Arrangement / Multiple Banking Arrangements, banks are required to obtain regular certification from professional like CMAs regarding compliance of various statutory prescriptions that are in vogue.
  • Stock Audit and Concurrent Audit of many Public Sector and Private Sector Banks.

Telecom Regulatory Authority of India (TRAI)

  • Legal Representation before Appellate Tribunal as per Section 17 of TRAI Act,1997
  • Reporting and Audit for System on Accounting Separation – Certification Work
  • Audit for Metering and Billing Accuracy- authorized to conduct audit

Directorate of Advertising and Visual Publicity (DAVP)

CMAs are authorized for certification of various forms prescribed under Directorate of Advertising and Visual Publicity (DAVP).

Various Ministries of Government of India have authorized CMAs in practice for certifying various returns and to issue Compliance Certificate as per their formats. Such ministries are

  • Ministry of Finance,
  • Ministry of Commerce,
  • Ministry of Corporate Affairs,
  • Ministry of Chemicals and Fertilizers,
  • Ministry of Textile,
  • Ministry of Consumer Affairs,
  • Food and Public Distribution

Others

  • Empanelled by many Public and Private Companies and Cooperative Societies as Internal Auditor for auditing financial books of accounts.
  • Apart from above services, Central & State Governments, Companies, Banks have empanelled CMAs for variety of work such as Cost Management, ERP, Financial Management, Project Consultancy, Materials Management, Tax Planning, Revival of Sick Units, Incentive Plans, Energy Audit etc.

Even after all this, one may not agree that scope in Practice is equal for both CAs & CMAs. I would like to say one thing, there is no doubt that CAs have more scope in practice as even a General Stores requires Tax Audit but the number of practicing CAs are far more than this and in CMAs, work-to-be-done is more than practicing CMAs.

In today’s world, apart from Degree / Qualification, one should have below mention qualities in his personality to have successful career as CMA.

  • Effective Communication & Negotiation Skill
  • Patience(especially in practice)
  • Punctuality (that I need to improve)
  • Leadership Skill
  • Passion for learning. It is more required in case of practising CMAs, as they themselves says – they are doing practise (means still learning) no matter how many years they have spent on practice i.e. learning.

Lastly, a Qualification / Degree is just a passport, to be eligible for getting Working Visa of a developed country (i.e. employment in good company), one must have PASSPORT with the above mention qualities in his shape of his personality. Sources:

  • www.icwai.org  
  • Orders and Circulars issued by Ministry of Corporate Affairs 

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