ICWAI to move house panel on autonomy

Institute of Cost and Works Accountants of India (ICWAI) will soon present its demand of greater autonomy for cost auditors to the standing committee reviewing the ICWAI (Amendment) Bill, tabled in Rajya Sabha in December last year.

The institute also plans to seek the government's permission to change its name from ICWAI to Institute of Cost and Management Accountants of India (ICMAI).

"With the computerisation of operations, manual book-keeping has become redundant and the focus now is on cost management," K L Jaisingh, president of ICWAI, said at a press conference held today.

He said with its present name it was becoming difficult for the accounting body to convince its clients that it could handle cost management also.

"This issue is significant because after the opening up of the accounting sector in 2005, cost management expertise will help in attracting international assignments," he added.

He also said cost auditors should be elected by the shareholders of a company at the annual general meeting. "At present, cost auditors are at the mercy of the board of directors, which can appoint or dismiss them without shareholders' knowledge," Jaisingh said.

This affected their independence, and thus the procedure of appointing cost auditors should be brought in line with appointment of financial auditors, he said.

Jaisingh said there was a need to make cost auditing a universal and an automatic process. At present, 47 industry groups have to undergo cost auditing but the government selects the units within a particular industry group.

"We are planning to ask for exemption from prior government approval before undertaking cost accounts. We will also seek that cost audit be made mandatory for all units," he said. This will assist in benchmarking and making comparisons across units.

Among the other things that the institute will take up is the issue of autonomy, which has been a main irritant for all the three institutes -- ICWAI, Institute of Chartered Accountants of India (ICAI), Institute of Chartered Secretaries of India (ICSI).

Apart from the provision that empowers the Centre to direct the institute, ICWAI has also objected to the number of government nominees in the central council.

At present, a fourth of the council comprises government nominees while the Bill proposes to reduce it to a fifth of the total strength of the council.

Jaisingh said ideally the council should have one or two government nominees.