With cost competitiveness, customer satisfaction and investor protection becoming important issues, cost accountants who render costs control advice are much in demand
In industrially developed countries, chartered management accountants or cost and works accountants (as they are known in India), are greatly in demand, and better remunerated than chartered accountants. Similarly, in Indias recently (1991) liberalised and deregulated economy in which cost competitiveness, customer satisfaction and investor protection are becoming important issues, the demand for cost accountants, who aid and advise corporate managements on ways to control costs, is on the upswing.
The Institute of Cost and Works Accountants of India (ICWAI) with its headquarters at 12 Sudder Street, Kolkata 700016, four regional councils in Mumbai, Chennai, Kolkata, and New Delhi and a chain of chapters throughout the country and abroad, is the sole institution authorised to train and license cost and works accountants in India. ICWAI was registered as a company prior to independence in 1944 at the instance of the then government of India, with the objective of conserving national resources through advanced cost management practices.
In 1959, Parliament passed the Cost and Works Accounts Act conferring statutory recognition to this profession. In 1964, the government of India amended the Companies Act, 1956 by statutorily mandating maintenance of costs accounting records in 40 select core industries and audit of the same by qualified cost and management accountants. Further acknowledging the importance of the profession for industrial development, in 1982 the Central government legislated the Indian Cost Accounts Service, to advise the government on fiscal management.
Admission into the ICWAI study programme is through a preliminary English language examination, which tests the elementary maths and general knowledge skills of students who have completed Plus Two or equivalent. Graduates of any recognised university may be admitted directly if they have averaged a minimum of 50 percent. The institute conducts half-yearly exams at 90 examination centres in India and six abroad. Like the chartered accountants study programme, the ICWAI course is divided into two components — intermediate and final. The duration of the study programme through the postal tuition scheme is 18 months.
Moreover ICWAI maintains 106 brick and mortar education centres delivering conventional teaching and training, and regional councils provide distance learning for students with commuting constraints.
Those who pass the cost accountancy final exam have to acquire three years work experience to qualify for membership of the institute. Currently ICWAI has a membership of over 26,000 and 33,000 students are enrolled for its preliminary, intermediate and final exams. The importance of ICWAI membership can be gauged from the fact that 29 Indian universities have recognised it as a sufficient qualification for pursuing Ph D programmes. Moreover fellow members of the institute are placed on a par with those with Ph D qualifications when professors, assistant professors and lecturers in professional/management institutes are recruited.
Entry point salaries are between Rs.2.5-3 lakh per annum depending on the size of the employer organisation. Career progression tends to be fast, offering the inviting prospect of branching off into private consultancy, where the sky is the limit financially.
Because of globalisation and the current economic meltdown, industry and business have no option but to cut costs to improve operational efficiency. Even government has realised that it needs to reduce its excess baggage and cut costs. Therefore theres ever-growing demand for qualified cost accountants. Consequently, the majority of finance directors in public sector enterprises and several bank chairmen and managing directors are cost accountants. Even marketing professionals with cost accountancy backgrounds tend to make better marketing managers,” says Anuradha Saha, a cost accountant certified by ICWAI, currently working as assistant manager with Centrum Capital Ltd, one of the top ten merchant banking companies with an annual sales revenue of over Rs.50 crore.
Saha enrolled for the ICWAI preliminary exam while a second year commerce student of the Bruhan Maharashtra College of Commerce, Pune. After passing her intermediate in 1990, she qualified as a cost accountant in 1991 after clearing the final exam. Starting her career with Kalyani Sharp, Pune, a top consumer electronics company and acquiring experience there for five years, she took a three-year break in 1999 to raise a family, and in 2003 joined Search Technology, Pune, before signing up with Centrum Capital in 2005.
The demand for cost accountants will continue to grow with the Companies (Amendment) Bill 2003, making it mandatory for every public limited company with a paid-up share capital of over Rs.3 crore, to appoint a full-time qualified chief accounts officer who shall either be a member of the Institute of Chartered Accountants of India or ICWAI. Today, qualified cost accountants are on a par with chartered accountants in corporate hierarchies. Those who qualify as cost and works accountants have a very promising future,” says Saha.