Institute of Cost Accountants of India
|Institute of Cost Accountants of India (ICAI)
भारतीय लागत लेखाकार संस्थान
|Formation||28 May 1959|
|Legal status||Body corporate established by a special Act of the Parliament of India|
|Objective||Develop and Regulate the profession of Cost & Management Accountancy and Cost Audit & in India|
|Member's designations||ACMA, FCMA|
|President||CMA Suresh Chandra Mohanty|
|Vice President||CMA Dr.A.S.Durga Prasad|
|IFAC member since||7 October 19|
|New Delhi (Northern India), Chennai (Southern India), Mumbai (Western India), Kolkata (Eastern India)|
|Official Organ||The Management Accountant (published monthly)|
The Institute of Cost Accountants of India (ICAI) [previously known as the Institute of Cost & Works Accountants of India (ICWAI)] is a premier statutory professional accountancy body in India with the objects of promoting, regulating and developing the profession of Cost Accountancy. It is the only licensing cum regulating body of Cost & Management Accountancy profession in India. It recommends the Cost Accounting Standards to be followed by companies in India to which statutory maintenance of cost records applicable. ICAI is solely responsible for setting the auditing and assurance standards for statutory Cost Audit to be followed in the Audit of Cost statements in India. It also issues other technical guidelines on several aspects like Internal Audit, Management Accounting etc. to be followed by practising Cost Accountants while discharging their services. It works closely with the industries, various departments of Government of India, State governments in India and other Regulating Authorities in India e.g. Reserve Bank of India, Insurance Regulatory and Development Authority, Securities and Exchange Board of India etc. on several aspects of performance, cost optimisation and reporting.
The ICAI is a Founder Member of the International Federation of Accountants (IFAC), Confederation of Asian and Pacific Accountants (CAPA) and South Asian Federation of Accountants (SAFA). ICAI is a member of the National Foundation of Corporate Governance(NFCG). The headquarters of ICAI is situated in Kolkata, and operates through its four regional councils located at Kolkata, Chennai, Delhi and Mumbai, 94 chapters in India and 7 chapters abroad.
- 1 About the Institute
- 2 Qualifications
- 3 Membership
- 4 Practice as Cost & Management Accountant and Legislative Recognition
- 5 Cost Accounting Standards (CASs) and Management Accounting Guidelines (MAGs) issued by ICAI
- 6 Cost Audit & Assurance Standards (CAASs)
- 7 International Recognition
- 8 See also
- 9 References
- 10 External links
About the Institute
The Institute of Cost Accountants of India (ICAI) was first formed as a registered limited company in the year 1944 as per the provisions of the then companies Act, 1913 with the initial objective of promoting, regulating and developing the profession of Cost Accountancy. Post Independence, the institute got statutory recognition when the Parliament of India enacted "The Cost and Works Accountants Act" (Act No.23rd of 1959), a special act, on May 28, 1959 to accord statutory recognition to ICAI (then ICWAI) as an autonomous professional Institute with the objectives of promoting, regulating, and developing the profession of Cost and Management Accountancy.
The CWA Amendment bill, 2011 was passed by both the Houses of Indian Parliament viz. Lok Sabha and the Rajya Sabha on December 12, 2011 and assented by the Honorable President of India on January 12, 2012. The changes were published in the Official Gazette of India on January 13, 2012.
Objectives of the Institute of Cost Accountants of India
(a) To develop the Cost and Management and Accountancy function as a powerful tool of management control in all spheres of economic activities.
(b) To promote and develop the adoption of scientific methods in cost and management accountancy
(c) To develop the professional body of members and equip them fully to discharge their functions and fulfill the objectives of the Institute in the context of the developing economy
(d) To keep abreast of the latest developments in the cost and management accounting principles and practices, to incorporate such changes are essential for sustained vitality of the industry and other economic activities
(e) To exercise supervision for the entrants to the profession and to ensure strict adherence to the best ethical standards by the profession
(f) To organise seminars and conferences on subjects of professional interest in different parts of the country for cross-fertilisation of ideas for professional growth
(g) To carry out research and publication activities covering various economic spheres and the publishing of books and booklets for spreading information of professional interest to members in industrial, education and commercial units in India and abroad
ICAI aims to promote and develop the adoption of scientific methods in cost and management accountancy for management control. It develops the professional body of members and equips them fully to discharge their functions as professional Cost & Management Accountants. ICAI helps its members to keep abreast with latest developments in the field of cost and management accounting.
Mission Statement of the institute
"The Institute of Cost Accountants of India Professionals would ethically drive enterprises globally by creating value to stakeholders in the socio-economic context through competencies drawn from the integration of strategy, management and accounting.”
Vision Statement of the institute
"The Institute of Cost Accountants of India would be the preferred source of resources and professionals for the financial leadership of enterprises globally.”
Cost & Management Accountants (CMAs)
This is the primary qualification of the ICAI and following completion of up to three levels (Foundation, Intermediate and Final) examinations and three years of practical training in areas like Management Accounting, Cost Accounting, Financial Accounting, Taxation, Audits, Corporate Laws etc. enables an individual to become a Cost & Management Accountant.
- The new syllabus has been introduced in January 2012 following the International Education Guidelines (IEG) of IFAC to get the advantages in the process of Mutual Recognition Agreement ( MRA) among /different member countries of the world under GATS in WTO.
- Subjects for examinations include management accounting, Financial Accounting, strategic management, taxation, corporate law, financial management, business valuation, financial reporting and cost & management audit etc.
- Students who have passed degree examination of any recognised university or equivalent are eligible for admission directly to Intermediate level.
- Paperwise exemptions on the basis of reciprocal arrangement are available to students who have passed Institute of Company Secretaries of India Final Examination.
- Examinations are held twice a year in June and December in various examination centres in India and overseas centres at Dubai and Muscat. And Results are declared in the month of August and February for June term and December term exams respectively.
A student has to pass three levels of examination and complete three years of practical training to be eligible to apply for Associate membership of the Institute.
The members of the Institute of Cost Accountants of India carry the designation ACMA (Associate Cost and Management Accountant) and FCMA (Fellow Cost and Management Accountant), as applicable based on the relevant work experience.
Certificate in Accounting Technicians (CAT)
The Certificate Course in Accounting Technicians (CAT)  was launched by ICAI in year 2009. This is one year course that comprises examinations, computer Training, practical training and orientation training programmes. The main objective of CAT is to develop among the students the necessary skills required to apply theoretical knowledge of accounting to practical situations in different functional areas of accounting.The CAT Course comprises two levels namely Level-I & Level -II and a CAT aspirant is required to complete both the examinations for obtaining CAT Certification.
Certificate in IFRS Convergence
In order to equip its members with the knowledge of International Financial Reporting Standards (IFRS) which is scheduled to be introduced in India in the near future, ICAI has introduced the "Certificate Course on International Financial Reporting Standards(IFRS) Convergence'.
Diploma in Management Accountancy (Dip. MA)
The Management Accountancy Examination is a post-membership examination. Only Members of ICAI who have completed at least a period of one year's Associateship are eligible for admission to this examination. This is a research oriented Programme in two parts. Part I consists of two groups and Part II requires for submission of a Dissertation followed by Viva-voce. On completion of the referred Programme, a candidate is eligible to use the letters-"Dip. Ma" after his or her name.
Practical Training Scheme
The Institute of Cost Accountants of India (ICAI) has made a compulsory requirement for every student having registered under Revised Syllabus 2008/ Syllabus 2012, to undergo practical training for a period of 3 years on whole time basis. You can start the practical training immediately onregistration into Intermediate course or during Course. Only requirement is that you have to complete at least 6 months training as on 31 March/ 30 September for appearing in the Final examination held in June/Decemberrespectively. This is applicable from December 2013 Final examination. However, the students who are desirous of appearing for CMA Final examinations from December 2013 to December 2014 shall enrol for I-CMATraining (I-CMAT) module of the Institute and at least complete 100 hours oftraining to make an application to appear in the final examinations.
Graduates of ICAI (Grad. CMA)
In the first instance, an individual registers as a student. Upon successful completion of Final Examination, student applies for graduate status of the Institute. On being granted by the institute, he/she shall be entitled to use letter "Grad. CMA" after his/her name. Grad. CMAs should apply for associate membership after they have gained relevant practical experience as prescribed by the institute for being eligible to apply for associate membership. Grad. CMAs are not members of the institute.
According to Sec 2(b) of CWA Act 1959, “Cost Accountant” means a person who is a member of the Institute. Sec 5(1)provides that the members of the Institute shall be divided into two classes designated respectively as Associates and Fellows.This much
A person who has passed the Final Examination of the Institute and has obtained for a period of not less than three years of practical experience in the field of Cost & Management Accountancy and other related areas can apply for Associate Membership. The practical experience as above may be acquired prior to or after passing the Final Examination or partly before and partly after passing the said examination. The applicant has to produce evidence to the satisfaction of the Council
After admission to membership, members are entitled to use the letter "ACMA" after his name to indicate that he or she is an Associate Member of the ICAI.
An Associate Member who has been in continuous practice in India for at least five years or a member who has been an Associate for a continuous period of not less than five years and who possesses such qualifications and experience as the Council may prescribe apply for Fellow Membership of ICAI.
Any person whose name is entered in the Register as a fellow of the Institute and so long as his name remains so entered, shall be entitled to use the letters "FCMA" after his name to indicate that he is a Fellow of the ICAI.
The Council of the Institute has mandated that the members of the Institute should use "CMA" as the prefix before their names to signify that he/she is a professional "Cost & Management Accountant"
Practice as Cost & Management Accountant and Legislative Recognition
To practice as Cost and Mangagement Accounting in India, either individually or in partnership or in LLP with one or more practicing member(s) of the institute, it is necessary to obtain the Certificate of Practice (CP) from the Institute of Cost Accountants of India.
Act 18 of 2013 companies Act 2013.
A Cost Accountant is defined and is also considered as expert among others in the said act.A Cost Accountant can act as an Internal Auditor of a company and can be a Cost Auditor of a company.Cost Audit standards are recognised.
A Cost Accountant can be an Investment advisor under SEBI regulation.
A Cost Accountant is an auditor under VAT act of various states and central excise.
A Cost Accountant can be an authorised representative under various statutes.
A Cost Accountant is recommended by the standing committee on the DTC to be included in the Income tax act to be an tax auditor(Pending legislation).
Cost Accounting Standards (CASs) and Management Accounting Guidelines (MAGs) issued by ICAI
Cost Accounting Standards (CASs)
The Institute of Cost Accountants of India (ICAI), recognizing the need for structured approach to the measurement of cost in manufacture or service sector and to provide guidance to the user organizations, government bodies, regulators, research agencies and academic institutions to achieve uniformity and consistency in classification, measurement and assignment of cost to product and services, has constituted Cost Accounting Standards Board (CASB) in the year 2001 with the objective of formulating the Cost Accounting Standards (CASs).
The structure of Cost Accounting Standard consists of Introduction, Objectives of issuing standards, Scope of standard, Definitions and explanations of the terms used in the standard, Principles of Measurement, Assignment of Cost, Presentation and Disclosure.
The CASB has primarily identified 39 areas/items on which CASs are to be developed.
On visit to India during the month of May, 2010, the then President of IFAC, Mr. Robert Bunting praised the role of ICAI by saying that "In cost accounting standards, perhaps India is the global leader. Its role is limited to select sectors and is closely linked to public accounting in most countries. We are discussing about the possibilities to make this system acceptable in more regions." 
The Council of the ICAI at its 251th Meeting held on 12–13 February 2009 and 258th Meeting held on 14 December 2009 decided on Mandatory application of Cost Accounting Standards (CASs). The CASs shall be mandatory with effect from period commencing on or after 1 April 2010 for being applied for the preparation and certification of General Purpose Cost Accounting Statements. So far ever 17 Cost Accounting Standards and 4 Management Accounting Guidelines have been issued by the Institute.
List of CASs issued by ICAI till date
CAS-1 (Final) on Classification of Cost
CAS-2 (Final, Revised 2012) on Capacity Determination
CAS-3 (Final, Revised 2011) on Overheads
CAS-4 (Final) on Cost of Production for Captive Consumption
CAS-5 (Final) on Average (equalized) Cost of Transportation
CAS-6 (Final) on Material Cost
CAS-7 (Final) on Employee Cost
CAS-8 (Final) on Cost of Utilities
CAS-9 (Final) on Packing Material Cost
CAS-10 (Final) on Direct Expenses
CAS-11 (Final) on Administrative Overheads
CAS-12 (Final) on Repairs And Maintenance Cost
CAS-13 (Final) on Cost of Service Cost Centre
CAS-14 (Final) on Pollution Control Cost
CAS-15 (Final) on Selling & Distribution Overhead
CAS-16 (Final) on Depreciation & Amortisation
CAS-17 (Final) on Interest and Financing Charges
CAS-18 (Final) on Research & Development Expenses
CAS-19 (Exposure Draft) on Joint Costs
Besides issuing standards, ICAI is also issuing Guidance Notes to each important standards in more detail and with practical examples for better understanding & proper implementation of each standard to achieve the right objectives set out in each standard.
Management Accounting Guidelines
MAG-1 on Implementing Benchmarking
MAG-2 on Valuations Management a Tool of Management Accountant
MAG-3 on Implementing Corporate Environmental Strategies
MAG-4 on Tools and Techniques of Environmental Accounting for Business
Cost Audit & Assurance Standards (CAASs)
With the introduction of "The Companies (Cost Audit Report) Rules, 2011" by Ministry of Corporate Affairs (MCA), Govt. of India, the scope & application of Statutory Cost Audit (u/s 233B of the Companies Act, 1956) has been widened manifold. The said rule also introduces a new concept named as 'Performance Appraisal Report' (PAR) which needs to be submitted by the Statutory Cost Auditor to the company along with the Cost Audit Report. This PAR is only meant for the company & it is not required to submit the same to the MCA like the Cost Audit Report.
In this changed context, the institute, addressing the needs of separate standards of auditing & assurance of cost records, has constituted the Cost Audit and Assurance Standards Board (CAASB) entrusting the responsibility to formulate standards and develop guidance notes in the areas of auditing, assurance, related services and quality control keeping in mind the special sophisticated structure & objectives of Statutory Cost Audit.
The sub-section (3) of section 148 of the Companies Act, 2013 gave the statutory mandate for separate auditing standards for audit of cost records as distinct from auditing standards applicable for audit of financial records. It stipulates that the auditor conducting the cost audit shall comply with the cost auditing standards which are issued by the ICAI, with the approval of the Government of India.
Till date, the CAASB has issued four standards:
CAAS-101 on Planning an Audit of Cost Statements
CAAS-102 on Cost Audit Documentation
CAAS-103 on Overall Objectives of the Independent Cost Auditor and the Conduct of an Audit in Accordance with Standards on Auditing
CAAS-104 on Knowledge of Business, its Processes and the Business Environment
The Institute of Cost Accountants of India (ICAI) has entered into a Memorandum of Understanding (MoU) with the leading Professional Accounting Bodies to enable Mutual Recognition and co-operation among the Institutes to develop the Profession of Management Accountancy for the benefit of their members in the pursuit of excellence in education and training and continuing professional development in Cost & Management Accountancy.
- Institute of Management Accountants (IMA), USA
- Chartered Institute of Management Accountants, UK
- The Institute of Cost and Management Accountants of Oman
- Institute of Public Accountants (IPA) Australia
- An MOU is also in existence with CMA Sri Lanka.
- Chartered Institute For Securities & Investments, UK
- Institute of Professional Accountants and Auditors of Russia (IPAR)
Some of the Management accounting bodies Worldwide besides the Institute of Cost Accountants of India(ICAI-CMA):
- Chartered Institute of Management Accountants, UK
- Institute of Management Accountants, USA
- Institute of Certified Management Accountants, Australia
- Society of Management Accountants of Canada
- Institute of Cost and Management Accountants of Pakistan
- Institute of Cost and Management Accountants of Bangladesh
- Chartered Institute of Cost & Management Accountants, Nigeria
- Institute of Certified Management Accountants of Sri Lanka
- "Founding Members of IFAC in 1977". Ifac.org. Retrieved 2012-07-30.
- "ICWAI Membership of CAPA". Capa.com.my. 1 July 1949. Retrieved 2012-07-30.
- "ICAI membership of SAFA". Esafa.org. Retrieved 2012-07-30.
- Seemant Ahlawat (1 October 2003). "Stakeholder in NFCG". Nfcgindia.org. Retrieved 2012-07-30.
- "ICWAI Act on MCA website" (PDF). Retrieved 2012-07-30.
- IFAC Assessment of the Regulatory and Standard-Setting Framework[dead link]
- Syllabus and Examination of ICAI
- Practical Training Scheme
- "ICAI Examination".
- "CAT Course".
- Diploma in Management Accountancy ( Dip.ma)
- New revised Practical Training Scheme
- Guidelines for enrollment to membership
- Guidelines for Fellow Membership
- "About CASB".
- "Q&A: Robert Bunting, President, IFA". Business Standard. Retrieved 2010-06-02.
- "Q&A: Robert Bunting, President, IFA". smartinvestor.in. Retrieved 2010-06-02.
- "Mandatory application of Cost Accounting Standards, w.e.f. 1st April 2010". Taxguru.in. Retrieved 2012-07-30.
- "Cost Accounting Standards".
- "About CAASB".
- Procedure for ICAI member to become member of IMA, US
- Management accountant gateway route to CIMA
- Memorandum of Association signed by Omar Zawawi Establishments LLC(Omzest Group) and the ICAI of India
- MOU with IPA
- MOU with CISI
- MOU with IPAR