A Ministry of Corporate Affairs-constituted expert group to review the existing cost accounting standards and cost audit report rules has further divided itself into six sub-groups.
Official sources said that the sub-groups will look into specific issues like confidentiality of cost data, cost accounting standards, consultations with trade bodies, cost accounting record rules, and other areas where cost accounting rules and auditing can be applicable.
The six sub-groups would also look into other areas that would include Government projects, public utilities, material costs, transportation costs, production, operations and administrative overheads, the official said.
The Ministry in January had set up an expert panel for developing relevant cost accounting methodologies and standards which would enable increasing the competitiveness of the Indian manufacturing sector.
The panel would review the existing cost accounting standards and audit rules in context of the current economic environment determined by increasing competition both domestically and internationally.
The expert panel has already met twice, the official said.
“Cost accounting, through the determination and allocation of costs to various products, provides a valuable service to the companies’ managements in cost analysis and control.
This can help improve efficiency in the use of materials, labour and plants, maximise production and realise greater profits,” he said.
Besides, cost analysis furnishes useful information in respect of matters such as gross margins, and differential and replacement costs, the official added.
“Cost analysis can be useful to the regulators of public utilities and provide a basis for comparing claims and assessing the validity of issues arising out of international trade,” he said.
The expert group has been asked to complete its task latest by September 30.
The official said that the group can submit interim reports to the Government at its discretion.
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