Introduction: In India Cost & Management Accountant (CMA) profession is one of the major professional courses. Globally this qualification has been recognized as Certified Management Accountant in USA, CIMA in U.K, IPA in Australia and different names in many other countries. Under present scenario there are several changes made the scope of this qualification in to a tremendous career options in India as well as globally. I would like to point out those recent important changes in this article. It will help the CMA professionals as well as student those pursuing this course.
1. Name Change of CWA to CMA: As per “The Cost & Works Accountants (Amendment) Act, 2011 (10 of 2012)”, the name of the Institute and the professional designation has been changed. This enable its members to use the designation ACMA and FCMA (instead of AICWA & FICWA) denoting Associate and Fellow membership of the Institute respectively. This change will give the incredible increase in scope of the qualification and global recognition to the qualification.
2. Changes in Cost Accounting Records & Cost Audit rules 2011: The Central Government has vide notification no: F.No.52/10/CAB-2010 dated: 3.6.2011 issued by the Companies ( Cost Accounting Records) Rules, 2011. This rules comes into effect w.e.f 3.6.2011 and has superseded product specific/activity specific Cost Accounting Records & Rules and replaced them with uniform Cost Accounting Standards issued by ICWAI (Now called ICAI) across all activities and sectors except 8 products /activities for which product/activity cost accounting records rules still remain in force. This above changes will give the wide applicability of Cost Accounting records & rules for across all the industries. Also CARR 2011 clearly defined “Manufacturing, Mining, Processing and Production activities to enable and extent the applicability of the scope of the Uniform Cost accounting standards. These rules are also covering the service sectors to the extent possible. These changes will give the great career scopes for the Indian CMA professionals and motivation & initiative to the present CMA students.
3. Changes in taxation areas: Government already in the process of changes in direct and indirect tax areas as follows
a. Direct tax code: proposed changes in direct tax structure will give and extend the scope of this profession, according to the Report on Direct tax code bill,2010 by Standing committee on Finance has proposed the following changes
1. The inventory valuation should be subject to a special type of audit investigation to be done by the department in doubtful cases.
2. This may be done on selection basis, preferably by fixing some threshold limit of turnover, say Rs. 20 crores and above, beyond which, the assessing officers of the income tax department can select some units for scrutiny to strengthen the hands of the revenue authorities.
3. This type of special audit should be done in the line of sec 142(2A) of ITA 1961 or clause 151(2) of DTC Bill, 2010 or Sec 14A and 14AA of the Central Excise Act, 1944, which are all intended to provide preventive check and control on corporate / assesses so that there exists an in-built control system of proper inventory valuation.
4.Such special audits may be ordered for at least 10-15% of total assesses of the income tax department by executive orders to be issued by CBDT so that the preventive control works as moral check on assesses to show correct valuation of inventory in order to keep transparency in final accounts.
5. Special audit of cost of inventory may be done by a cost accountant in practice as per meaning of the cost and works accountants act, 1959.
This above recommendation will give the widen scope for Indian CMA in Direct taxation areas.
b. Goods & Service Tax (GST): Proposed changes in the area of indirect taxation, implanting the Goods & Service tax will give the enhancing scope from the present to the Indian CMAs in their professional career. It will enlarge the scope of CMA from the implementation stage to successful application.
4. IFRS implementation: As per the road map of MCA for IFRS Convergence in India already we have crossed the first phase and awaiting to the implementation of phase 2 & 3 as follows
Phase 2- Opening balance sheet as at 1 April 2013 Companies not covered in phase 1 and having net worth exceeding INR 500 crore
Phase 3- Opening balance sheet as at 1 April 2014 Listed companies not covered in the earlier phases
These areas also give a greater roles & responsibility to Indian CMAs to utilize their professional caliber in a good manner and have very great career development.
The points discussed above are give the new changed look for Indian CMAs and give new opportunities along with the existing career scope, roles and responsibility in the Indian as well as International Economy and Industries and also gives the motivation to the CMA students to achieve their target in the CMA course.
CMA Ramesh Krishnan