COST ACCOUNTANCY

Q1.What is the job of Cost accountant ?

A1. It is one of the most essential management services. It is a fairly new branch, a profession ushered in during the last century. With increase in competition and consequent economic pressures, cost and management accountancy has been finely interwoven into the main fabric of management. Collection, assimilation, collation and analysis of financial information from all areas of an organisation are the functions of a cost accountant. There is no denying the fact that an organisation’s success or failure is dependent on the quality of information made available to the management. This is where a cost accountant’s productivity is of vital importance to the company. It is his primary job to ensure that managerial decisions are well within the cost prescriptions. The cost accountant is expected to give a prognosis for projects to be undertaken based on past and present financial performances. In order to do this a cost accountant needs to take into account factors like cost of raw materials, labour, transport, overheads and the like. Knowledge of these costs will help the cost accountant prepare budgets for the operation that is planned.

Q2.What is the nature of job of a cost accountant ?

A2. A cost accountant specialises in navigating managerial decisions, stabilising budgets and standards, assessing operational efficiency and the effectiveness of production and service management, identifying accountability for profit variance and so on. His responsibilities include: designing and implementing effective management information and control systems, planning costing systems and methods, inventory control incorporating mathematical models, investment analysis, project management, internal audit, cost audit, diagnosis in the case of sick industries, fund management, pricing planning, interpreting information and data related to business activities and translating them in such a way as to guide the core management into taking the right decisions. Criteria The academic requirement is to pass the examination conducted by the Institute of Cost and Works Accountants of India (ICWAI).

Q3.How are the ICWAI examinations held ?

A3.The ICWAI examinations are held in three stages – preliminary, intermediate and final. A candidate may appear for the preliminary examination after passing the plus two (twelfth standard) examinations. The students are tested in English, elementary mathematics and general knowledge. The preliminary is waived in the case of gazetted officers, post graduates, qualified engineers holding a degree and graduates from other streams with fifty per cent marks. They are generally allowed to register with the institute for the intermediate examination.

For the intermediate exam, there are four papers – financial accounts, cost accounts, corporate laws and secretarial practice and direct taxation. The syllabus covered in the entire course includes book keeping and accountancy, production, productivity, cost effectiveness, cost accountancy, business mathematics and statistics, business and economic laws, principles of management, auditing, tax laws and tax planning, quantitative techniques and methods of cost and management accountancy. The institute has made it mandatory for registered candidates to undergo training, or tuition, either directly or through correspondence, before appearing for the examinations. The duration of the course through correspondence is eighteen months.

Q4. What are the qualities essential for cost accountancy ?

A4.As for personal traits, the first requirement is that one needs to be a native numerate. Of course, academic abilities too top the list alongside. Other equally important requirements are an ability to communicate (both written and spoken) concisely, a keen business sense and the ability to negotiate. The job calls for a high sense of motivation, concentration and determination.Regional councils and other institutes recognised by the Directorate of Studies of the ICWAI conduct these classes. Examinations are held twice in the year. The Cost and Work Accountancy course may be completed over a period of two or three years. It is generally considered to be easier than the chartered accountancy course.

Q5.What does the future hold?

A5.Once a candidate has passed the examination, there are several options ahead of him. He could either serve in an industry or opt for government service. There is plenty of scope in the banking and insurance sectors. The government has made it mandatory for thirty-eight classes of companies to employ a cost accountant. This very fact throws up tremendous opportunities for one. There is always the option of practising as a consultant. A third option is to impart teaching at institutes or at universities. Higher academic pursuit for a doctorate is also possible. The ICWAI programme has been recognised by some universities for admission to Ph. D courses in commerce. If one can manage an additional CA (Chartered Accountancy) or an MBA (management) degree, the scope for an individual is indeed vast. The returns: For a cost accountant, there is no fixed pay scale. It depends entirely on the organisation that he is employed in. Generally speaking, he could begin around Rs. 4,000 a month. For those with an additional degree such as CA or MBA, the starting salary is likely to be on par with senior executives in the organisation, probably in the Rs. 7,000-12,000 bracket.

Q6.What is the List of Indian Cost and Works Accountant Institutes ?

A6.Head Office – The Institute Of Cost and Works Accounts of India, 12, Sudder Street, Calcutta-700 016.

Regional offices: Northern India Regional Council of the ICWAI, 3, Industrial Area, Lodhi Road, New Delhi-110 003. Western India Regional Council of the ICWAI, Rohit Chambers, 4th Floor, Goga Street, Mumbai-400 007. Southern India Regional Council of the ICWAI, 65, Montieth Lane, Egmore, Chennai-600 008. Eastern India Regional Council of the ICWAI, 84, Harish Mukherjee Road, Calcutta-700 005.