Your time is limited, so don't waste it living someone else's life. Don't be papped by dogma - which is living with the results of other people's thinking. Don't let the noise of other's opinions drown out your own inner voice; and most important, have the courage to follow your heart and intuition. --Steve Jobs
My Dear Professional Colleagues,
Sustainability and CMAs
The focus on sustainability has emerged as a result of significant concerns about the unintended social, environmental, and economic consequences of rapid population growth, economic growth and consumption of our natural resources. Sustainable business is a non-traditional business strategy that concurrently builds profits and economic stability, restores the health of natural systems, and promotes prosperous and healthy communities
Sustainability is based on a simple principle: Everything that we need for our survival and well-being depends, either directly or indirectly, on our natural environment. Sustainability creates and maintains the conditions under which humans and nature can co-exist in productive harmony, that permit fulfilling the social, economic and other requirements of present and future generations. Sustainability has long been on the agenda at many companies, but for decades their environmental, social, and governance activities have been disconnected from core strategy. Most still take a fragmented, reactive approach—launching ad hoc initiatives to enhance their “green” credentials, to comply with regulations, or to deal with emergencies—rather than treating sustainability as an issue with a direct impact on business results
Sustainability is essentially an exercise that measures the value that a business creates by leveraging Strategy, Organizational Spucture and Governance in Social, Economic and Environmental context. CMAs possess the ability to measure efficiency and effectiveness of Men, Money, Machines, Material and Management on the dimensions of Cost, Time, Quality, Environment and Societal impact including the ability to evaluate the contribution of different forms of Capital which are identified by IIRC towards Integrated Reporting. They possess expertise in furthering sustainability, as it is essentially an integration of sustainability enhancement tools that they are already familiar with such as Strategy Maps, Balance Score-Card, Total Impact Measurement and Management (TIMM), Customer Profitability, Activity Based Costing, Driver Based Budgeting, Social and environmental impact assessment and accounting, Value Management, Benchmarking, and Life Cycle Costing. CMAs have been using these tools for developing and delivering Performance Appraisal Report.
CMAs can provide the necessary leadership and guidance helping a company to migrate to becoming a sustainable organization through:
a. Facilitating creation of an appropriate organizational environment including performance measures and metrics keeping the aspect of sustainability in focus
b. Evaluating organizational performance and practices across business segments in the context of Social, Economic and Environmental aspects
c. Contriibuting to formulation of organizational structure and strategy that focuses on triple P – People, Profits and Planet and its linkage with governance and performance
d. Developing an appropriate system of social and environmental risk identification, assessment, monitoring, mitigation and control
e. Evaluating and appraising Economic, Social and Environmental value proposition through costing, revenue, profitability, non-financial and non- quantitative analysis.
Sustainability provides huge professional opportunity for the CMAs. The Challenge for CMAs is to assume leadership, demonstrate their ability to facilitate sustainability and consistently drive the message – Sustainability is no longer a matter of choice. The stakeholders will in future increasingly expect and demand that businesses rise to the challenge of sustainability and shall reward companies following sustainable practices with higher valuations and enhanced corporate image leading to their continued and progressive growth.
The choice for companies today is not if, but how they should manage their sustainability activities. Companies can choose to see this agenda as a necessary evil—a matter of compliance or a risk to be managed while they get on with the business of business—or they can think of it as a novel way to open up new business opportunities while creating value for society.
The above constitutes the main agenda of the ICAI International Summit in association with A4S on the theme ‘Doing Business Responsibly through Accounting for Sustainability’ at New Delhi on 16th July 2015. Further details will be available very soon on the Institute’s website.
Meeting with Finance Minster
I had an opportunity to meet Shri Arun Jaitley, Hon’ble Union Minister of Finance, Corporate Affairs and I&B on May 19, 2015 and discuss the pending issues and to include our member in the proposed Expert Committee to review Companies Act 2013 along with other sister bodies. I also met the Secretary, MCA on the same day and discussed about the pending matters. I hope that these issues will be resolved very soon.
Meeting with ACCA-UK
On invitation by the ACCA to visit its office and meet officials at London on 13th May 2015, I visited its London office and had discussions with the officials of ACCA on sharing of knowledge on how ACCA assesses and approves employers through its Approved Employer program, exploring potential collaboration and knowledge sharing on research and insights, with a view to collaborating on joint research, joint events and broader programs, and sharing information on ACCA’s existing R&I program with a view to organize joint CPD events. We shared with ACCA the ICAI program to show existing breadth of paining that ICAI offers. The discussions were also held on collaboration to promote the value of a professional qualification and professional accountancy as a career choice.
Meeting with CIMA-UK
To discuss the next steps to implement the MoU signed at Hyderabad during the National Cost Convention, I visited CIMA office at London on 11th May and discussed with officials about the response for the MOU and also about the issues that have arisen after the MOU. It was decided to review the issues after receiving the responses for the next two weeks. I also took the opportunity to discuss the partnership with them for the forthcoming International Conference on Sustainability. This followed up with another meeting with CEO Mr. Charles Tilley and Sr.Vice President.
Meeting with A4S-UK
Institute, being the only institution from India, is a member of the Accounting Bodies Network (ABN) of The Prince’s Accounting for Sustainability (A4S) Project. The Institute in association with A4S is planning to organize an International Summit on Doing Business Responsibly through Accounting for Sustainability at New Delhi on 16th July 2015. To discuss the modalities of the event I visited A4S office at London on 12th May 2015 to discuss the roadmap to organize the summit and to finalize first draft of the program schedule. The discussions were fruitful and it was decided to finalise the program and begin the work to mobilise the participants.
MoU with Medical Associations
I wish to inform you that the Institute has signed a Memorandum of Understanding (MoU) with Association of Healthcare Providers (India) and Delhi Medical Association (DMA) on May 29, 2015 at New Delhi to ensure better cost management to benefit patients in India. The objective of this MoU is to provide expert advice of Cost Accountants to hospitals in implementing best practices and maintain costing system that helps the service providers in managing and controlling the cost to ultimately benefit patients. I believe that the role of Cost Accountants in this area will be critical as the healthcare costing is complicated due to heterogeneous products, intricate and varied processes and complicated cost structures. The MoU was signed by me on behalf of Institute and Dr. Girdhar J Gyani, Director General, AHPI, and Dr. Chander Mohan Bhagat, Chairman, DMA NH & MEF.
To apprise all the members about the activities / initiatives undertaken by various Departments of the Institute, I now present a brief summary of the activities.
Institute’s 57th Annual Day was celebrated on May 19, 2015 at Hotel The Ashok, New Delhi where a cultural evening was organized. The event was attended by the staff members, Council Members of the Institute and invitees.
Advanced Studies Department
The department is considering a proposal to revise the syllabus of the Diploma in Business Valuation to include the aspects of the Taxation. A proposal is also being initiated by the department to revive the existing syllabus of the Diploma in Management Accountancy.
Continuing Professional Development Department
The Institute is associated with PHD Chamber of Commerce and Industry for continued 'Workshop Series on Indirect Taxes (with specific relevance to GST) & Annual Subscription Proposal For FY 2015-16' since April 2015 to February 2016 at PHD House, New Delhi. There was active participation by the members of the Institute. For details, visit website of the Institute. Another '12 Week Workshop Series on Companies Act 2013' covering the Act, Rules & Circulars is being organized from 13 March 2015 to 5 June 2015 at PHD House, New Delhi. There is active participation by the members of the Institute. For details, visit website of the Institute.
The Institute in association with ASSOCHAM organized a seminar on “Decoding the amended Companies (Cost Records & Audit) Rules, 2014” on 2 May 2015 at CMA Bhawan, New Delhi. There was active participation by the members of the Institute. The Institute in collaboration with SCOPE is organizing one day Seminar on “Decoding the amended Companies (Cost Records & Audit) Rules, 2014” on 19 June 2015 at SCOPE Convention Centre, New Delhi the professionals in PSUs.
I wish to inform that increasing initiatives by our Regional Councils and Chapters in organizing various programs, seminars and discussions on the topics of professional relevance and importance for the members such as, Service Tax, Ushering in Goods & Services Tax and Highlights of 122nd Constitutional Amendment Bill, 2014, Annual Returns, Global Corporate Citizenship, Institution Building-A Suggested Approach for CMA Institute, Workshop on Cost Competitiveness in MSME Sector in India & Cost Management in a Competitive Business Environment, Practical Approach on MIS & Budgeting, Goods & Service Tax & Roll of Independent Directors, Board Members, Secretarial Audit and Compliances Under Companies Act and Other Laws, Seminar on The Companies Act,2013 Provisions Relating to Depreciation and Fixed Assets, and so on. We are sure that our members are immensely benefitted with such programs. Look forward for active participation of our members to enhance professional knowledge and skills.
Cost & Management Accounting Committee
I am very happy to inform you that the series of efforts taken by the Institute in championing for a scientific principle based Health Care Cost has resulted in a crucial meeting with Dr. B.D. Athani, Special DGHS on 5th May 2015. It was discussed that he Institute to extend its expertise in fixing range of costing rates for some key medical procedures decided by DGHS. I was able to highlight the key outcomes from the Asian Summit on Healthcare Cost Management held in March 2015, the special cost study conducted by the Institute on some of the key medical procedures under advice from Ministry of Corporate Affairs and the costing template developed by the Institute and accepted by the Committee formed under the Ministry of Health and Family Welfare. DGHS was quite happy with the efforts done by the Institute for costing template and Guidance Note on Health Care Cost Management. It was also suggested by Spl. DGHS to have a WHO Workshop by the Ministry in association with the Institute to clarify the concept, methodology and usefulness of Costing in health care.
The Examination Directorate is preparing to conduct Intermediate and Final examinations of June 2015 term in 118 examination centers including oversees centers from 11th to 18th June 2015. Examination of 3 Diploma courses i.e. Diploma in Business Valuation, Diploma in IS Audit & Control and Diploma in Internal Audit will also be conducted. Foundation online mode of examination will be held on 13th June 2015. I urge upon the examinees to work hard in order to achieve desired success in these examinations.
The Council has approved the changes in some definitions in the Cost Accounting Standards (except CAS1, CAS4 & CAS22) and GACAP, consequent to an exercise of limited review of the Cost Accounting Standards and GACAP by the CASB. The Council has also approved the Limited Review of Cost Accounting Standard on Classification of Cost, CAS-1, as recommended by the CASB.
I wish members, students and their family good health and prosperity. I also urge the members to cast their votes in the forthcoming elections to the Council and Regional councils on June 5 & 6, 2015.
With warm regards,
(CMA Dr. A.S. Durga Prasad)