What do they do?
Cost and works accountants (CWAs) — called management accountants in other countries — work in and beyond the 44 classes of product-oriented industries, such as sugar, paper, refrigerators, cement and steel, for which cost audit is mandatory. They collect, assimilate, collate and analyse financial information from all areas of an organisation. Theirs is a critical role in that the management makes decisions based on the information provided by these professionals.
Their chief role is to ensure that managerial decisions are within prescribed costs.
GN Venkataraman, president, Institute of Cost and Works Accountant of India (ICWAI), says the demand for cost accountants is expanding. Even in a slowdown, students got packages of Rs 4 lakh to Rs 6 lakh during campus placements last year. “The demand is more. We are trying to catch up.” ICWAI has about two lakh enrolees but only 1500-2000 qualify to be cost accountants every six months.
Cousins of chartered accountants (CAs) and company secretaries (CSs), cost accountants occupy the top slots of chairpersons, managing directors, finance directors, financial controllers, chief accountants, cost controllers, marketing managers, chief internal auditors, in government and private organisations, public sector enterprises, and multinational companies. (The Central government has an Indian Cost Accounts Service, which is at par with its Class I services). A few well-known CWAs include RS Sharma, CMD, ONGC; Anil Sardana, CMD, Tata Teleservices, and Chanda Kochar, MD and CEO, ICICI Bank.
Cost accountants are employed for cost accounting, accounting, financial management, financial/business analysis, auditing / internal auditing, direct and indirect taxation, as also systems analysis and systems management. Their work options also include functional consultancy in Enterprise Resource Planning (ERP) implementation, process analysis in business process outsourcing (BPO) houses and teaching in colleges or business institutes. Incidentally, 35 universities recognise the CWA qualification — along with a Bchelor’s degree — as qualification for entry to MPhil and PhD programmes in commerce and allied disciplines.
Some enterprising sorts venture out on their own. Either individually or in partnership with one or more members of the institute, they offer many services, such as cost audit under the Companies Act, valuation audit under the Central Excise Act, CENVAT audit under Central Excise Act, special audit under Customs Act, audit under VAT Acts of various states, certification of cost of production for captive consumption for the purpose of excise duty assessment, certification under the export and import policy, certification of consumption for import application, tax and project management consultancy, as well as business valuation. Cost accountants can provide management consultancy as well.
“Opportunities for accounting executives lie across sectors as finance is the backbone of any organisation. The applications of cost accounting are very wide,” says Sanjay Gupta, chairman, Northern India Regional Centre, ICWAI.
However, you might still wonder why one would prefer a CWA over CA or CS? It’s true that a CA can do an audit of even a neighbourhood shopkeeper or help file tax returns of individuals. CWAs, on the other hand, have their niche. “A CA performs a post-mortem. He comes into the picture when the activity has already taken place whereas a cost accountant is with you from the inception of a project,” says Gupta. “As a cost accountant, you can help in cost-cutting, better MIS (management information systems), and enhanced productivity.”
“Many a time, students are in a dilemma over which course — CA/CWA and CS — they should do. Though all the three courses have similarities, the key difference lies in the depth of the subjects studied and the exam orientation. While the cost accounting course has in-depth study relating to cost and management accounting, chartered accountancy covers in-depth study of financial accounting, auditing, and tax aspects. Company secretaryship comes with detailed study relating to company law,” explains Gupta. Certainly, there is nothing like the best course — the choice should depend on the aspirant’s interest, aptitude, abilities and objectives in life.
