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Fields for Practicing Cost Accountants SIRC of ICWAI


  Field for Practicing Cost Accountants

 A Cost Accountant may build up his own practice by obtaining a
  license from the Institute, either individually or in partnership with
  one or more members of the Institute in practice and offer essential
  aides to some of the regulatory functions.
 A Cost Accountant in Practice may also be a Trustee, Executor,
  Administrator,Arbitrator, Receiver, Appraiser, Valuer, Advisor,
  Secretary or as a Special Consultant, or as a representative for
  financial matters including Taxation.
 Some of the audits undertaken by Cost Accountants:

 Cost Audit (Section 233B of the Companies Act 1956)
 Central Excise Audit (Section 14A of the Central Excise Act
 Central Excise Special Audit (Section 14AA of the Central
  Excise Act 1944)
 Internal Audit
 Inventory Audit
 Concurrent audits in banks
 Sales Tax/VAT Audit
 Telecom Regulatory Authority of India (TRAI) Audit
 Special Audit under Customs Act
 Management and Operational Audit
 Service Tax Audit
 Anti-Dumping
 A Cost Accountant in practice can appear as authorized
  representative before several quasi-judicial bodies such as:

   Income Tax Appellate Tribunal
   Company Law Board Regulations
   Customs, Excise and Service Tax Appellate Tribunal
   National Company Law Tribunal
   Competition Commission of India
   Monopolies and Restrictive Trade Practices Regulations
   Telecom Disputes Settlement and Appellate Tribunal
   Securities Appellate Tribunal
A practicing Cost Accountant can also issue Certifications

a.   Under EXIM Policy
b.   Valuation of Assets
c.   Under Excise Act
d.   Under FEMA
e.   Under Companies Act
f.   Under Regulatory Authorities
g.   Under Anti-Dumping Regulations
h.   Certificates to the Banks and Financial Institutions
Other areas of his specialization include:

 Designing and introduction of Systems
 Control Functions such as inventories, debtors, working
  capital management,etc.,
 Studies of problems in capacity utilization, raw material
 Preparation of profitability forecasts
 Certification of consumption for import application
 Decision making
 Advising in the matter of purchasing a business or planning or
 Other consultancy assignments
       Categories of the Fields

The fields for practicing Cost Accountants can be categorized
in following two broad Categories:

I.     Statutory and Specific Fields:
a.     Audit
b.     Taxation
c.     Corporate Laws
d.     Certification
e.     Insurance
f.     Empanelment
II.   Non-Statutory and General Fields:

a.    System design, Installation and Operation
b.    Techno-economic Study
c.    Services to Banks, Insurance Companies and other
      Financial Institutions
d.    Financial Management
e.    Project Consultancy
f.    Tax Planning
g.    Materials Management
h.    Management Accountancy
i.    Investment Counseling and Portfolio Management
j.    Diagnostic Accounting and Revival of Sick Units
k.    Internal Management and Operational Audit
l.    Organizations structure Review
            Certification Procedures

 Requirement to look into the facts of the cases in regard to the
  correctness of facts presented and true and fair view in the
  compliance to legal or other requirements.
 A clear distinction between certificate and report.
 Certificate-A written declaration consisting of facts and or opinion,
  which is capable of being verified subsequently.
 Report-A detailed description of a situation or an opinion supported
  by considerable background information.
• Requirement to take adequate care of his professional ethics and code
  of conduct as prescribed for the profession in all its aspects while
  giving his certificate.
• Adequate care of consistency in the methods followed without which
  the information may get distorted.
Qualities of a Good Certificate/Report
While issuing any certificate/report, a Cost Accountant should
ensure that it contains the following information:
 Name and address of the concern and the product/purpose for
   which the certificate is issued
 It should be in the prescribed form which gives the required
 It should be based on verified data.
 It should contain the required explanatory notes, reservations
   or qualifications depending the records produced before him.
 A suitable declaration or authentication by the Management on
   the face of the certificate should be obtained.
 Certified data should bear the signature of a Director or
   General Manager of the Company
 Every certificate and every page of the statement and
   appendices attached to he certificate should bear the date,
   signature and seal of the Cost Accountant.
 The Language used and the information presented in the
  certificate should always be unambiguous.
 The Cost Accountant should give a proper note for all the
  inclusions/exclusions to/from the Certificate
 The Certificate should be drafted as to covey the factual
  situation without the ambiguity.
 It should be a self-contained document
 It should include a reconciliation between the figures in the
  general purpose financial statements and the figures appearing
  in the report.
 A suitable reference to he notes attached to a Certificate should
  be mentioned in the main certificate.
 Where the Cost Accountant wishes to qualify his report, he may
  indicate it under “Notes”
 The Certificate may be addressed to a client, the public
  authority, or the person requiring it.
While issuing a Certificate a Cost Accountant should be clear on
the following matters:
 Be clear of what is to be certified.
 Understand precisely the purpose for which the certificate is
    required and its possible implications.
 Study the relevant Act and rules affecting the operations to
    which the Certificate relates.
 Understand accounting system of the client.
 Verify as much data needed to give an opinion.
 Keep notes of verification drill and file working papers
    properly for easy access at later date.
 Draft the report carefully.
 Be certain and definite on facts.
 Give valid reasons for the opinions.
 Be consistent, logical and factual.
 Apply uniform accounting/cost accounting principles
         General Agreement on Tariffs and
   The predecessor of WTO was born in 1948.
   A loose system of International Agreement.
   Did not crystallize as an Institutional Framework.
   The primary objective was to expand international trade by
    liberalizing trade so as to bring about all-round economic prosperity.
Important Objectives:
   Raising standard of living.
   Ensuring Full Employment.
   Developing full use of the resources of the world.
   Expansion of production and international trade.

    The GATT was transformed into WTO with effect from
 The main organ of implementation of the Multilateral Trade
  Agreements (MTA).
 Forum for negotiations among its members.
 Basic principle is equal treatment to products and services of
  multilateral trading system and equal treatment to products and
  services for all other WTO Countries.
 Has very efficient dispute settlement body and Trade Policy Review
 Directed by the Ministerial Conference that meets at least once every
  two years and its regular business is overseen by a General Council.
Major Differences between GATT & WTO

           GATT                               WTO

Ad hoc and Provisional            Permanent

Had Contracting Parties           Had members

Allowed existing domestic         Does not allow this
legislation to continue even if
it violated GATT Agreement
Less Powerful,dispute             More Powerful,dispute
settlement system was slow        settlement system is fast and
and less efficient.               more efficient.
              Functions of the WTO

 Facilitate the management of the Multilateral and Plurilateral
  Agreements for the fulfillment of their obligations.
 WTO will facilitate implementation of the results of the negotiations
  as decided by the Ministerial Conference.
 It shall administer the Understanding on Rules and Procedures
  governing the settlement of disputes.
 It is responsible for administration of the Trade Policy Review
  Mechanism forming part of the Agreement.
 It is the organ for establishing coordination with other Wings of the
  UNO such as IMF, IBRD and its affiliated agencies.
       Structure of the WTO

I.   The Ministerial Conference

    The highest body
    Composed of the representatives of all the members
    The Executive of the WTO
    Responsible for carrying out the functions of the WTO
    Authority to take decisions in any matters under the relevant
    It shall meet al least once in every two years
II.     The General Council
        Executive Forum composed of representatives of all the
        Discharges the functions of the Ministerial Conference
         (MC) during intervals between meetings of the MC.
        It shall meet as and when necessary.
        It shall establish its own rules of procedures and also
         approve the rules of procedures for the Councils established
         by it.
It shall also be responsible for:
        The discharge of the responsibilities of the Disputes
         Settlement Body as outlined in the Understanding on Rules
         and Procedures governing the Settlement of Disputes which
         form part of the MTA
        The discharge of the responsibilities of the Trade Policy
         Review Body
     The Functional Councils under the
     General Council and their functions
The General Council shall have three functional Councils
working under its guidance and supervision.These are:

a)   Council for Trade in Goods

b)   Council for Trade in Services

c)   Council for Trade-Related Aspects of Intellectual
     Property Rights(TRIPS)
Functions of the three Councils

 The Council for trade in Goods shall oversee the functioning of the
  Multilateral Trade Agreement relating to trade in goods.

 The Council for Trade in Services shall oversee the functioning of the
  Multilateral Trade Agreement relating to trade in services

 The Council for trade related aspects of Intellectual Property Rights
  shall oversee the functioning of the Multilateral Trade Agreement
  connected wit Intellectual Property Rights and obligations, forming
  part of the Agreement.

These Councils shall establish their respective rules of procedures
subject to the approval of the General Council.The Councils will meet as
and when necessary.
        The Ministerial Conference and
The Ministerial Conference shall establish three functional Committees
for discharge of functions assigned to them under the MTAs. These
Committees are:

 Committee on Trade and Development
 Committee on balance-of-Payments Restrictions
 Committee on Budget, Finance and Administration

These Committees will also discharge functions specifically assigned to
them by the General Council. The Committees are open to
representatives of all members.
     Anti-Dumping Processing-Introduction

     Dumping occurs, if a company exports its products at a lower price
      than the normal price charged by it in the domestic market.
     If the dumping injures the domestic manufacturers in the importing
      country, the importing country may impose anti-dumping duties
      under certain circumstances to offset the effects of dumping.
     Sections 9,9A,9B and 9C of the Customs Tariff Act,1975 form the
      legal basis for anti-dumping and anti subsidy investigations and for
      the levy of anti-dumping and countervailing duties in India.
     Anti dumping is a measure to rectify the situation arising out of the
      dumping of goods and its trade distortive effect.
     There are two requisites for determination of dumping:
a.    Normal Value
b.    Export Price
    Normal Value is the comparable price at which the goods under
     consideration are sold, in the ordinary course of trade in the
     domestic market of the exporting country.
    If the normal value cannot be determined by means of the
     domestic means, the following two alternative methods may be
a.   Comparable representative export price to an appropriate third
b.   Cost of production in the country of origin with reasonable
     addition for administrative, selling and general costs and
     reasonable profits.
    Export Price of the goods allegedly dumped into India means the
     price at which it is exported to India. It is generally the CIF value
     minus the adjustments on account of ocean freight, insurance,
    Margin of Dumping is the difference between the Normal Value
     and the Export Price of the goods under complaint.
Difficulties in determining the existence of
 The Cost Structure in different countries may widely vary depending
  on technology, the scale of production and other factor costs.
 There is multiplicity i.e. the network of import or export-the same
  country importing from several others and the same country
  exporting to many member countries.
 The dumping margin to be established requires the comparison
  between products, which are identical i.e.alike in all respects or
  closely identified to the product under consideration.

Therefore it is very necessary to translate different parameters and
indicators in financial terms to identify and determine the existence of
dumping. A Management Accountant is best suited to develop expertise
in these areas.

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