Cost auditors feel let down by final rules;

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Cost auditors feel let down by final rules;

Postby bvprabhakar on Tue Jan 13, 2015 2:04 pm

Cost auditors feel let down by final rules; Key sectors still not included, notification has grey areas


MUMBAI, KOLKATA:

The ministry of corporate affairs notified the final Cost Rules in the first week of January , in line with recommendations of an expert committee that was set up when rules notified earlier grossly undermined the profession's importance and caused widespread agitation.

Although the new rules expand the profession's scope marginally, it still remains drastically reduced from 2012.The Institute of Cost Accountants of India (ICAI) appears unlikely to challenge the new rules. ..


"The new Cost Rules continue to leave out key industries such as automobiles and auto ancillaries, where cost audit data had earlier proved crucial for government departments such as excise and the Competition Commission of India to identify malpractices and impose fines,
" said Dr Dhananjay Joshi, past president of ICAI.

"Besides, industries such as paints and packaged foods and a large chunk of machinery and mechanical appliances have been taken out of the purview,"
he said.

The industry is, however, happy with the new Cost Rules.

"It has fairly addressed the concerns of the industry as well as profession in the larger interest of the Indian economy,"
said ONGC director K Narasimha Murthy, who has 33 years of experience in cost and management accounting profession.

"
Some of the critical sectors involving public interest, however, are yet to be covered under the cost audit rules.


I feel corporate governance alone is not sufficient today. Unless we have proper performance governance, the enterprise governance is not complete
."



Read more at:
http://economictimes.indiatimes.com/articleshow/45867651.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
Last edited by bvprabhakar on Tue Jan 13, 2015 2:07 pm, edited 1 time in total.
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Re: Cost auditors feel let down by final rules;

Postby himalendubose on Mon Jan 26, 2015 4:20 pm

I don't agree to the comments in terms of coverage of machinery and mechanical appliance by D V Joshi.

2011/12 notification under chapter 84 & 85 had 123 sub tariff heads covered. Now the current notification has 116 sub tariff heads covered for chapter 84 & 85 and this accounts to 94% coverage.
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Re: Cost auditors feel let down by final rules;

Postby himalendubose on Mon Jan 26, 2015 4:22 pm

packaged food industry has coverage in terms of raw foods and processed food.

Processed food industry should have been covered under cost audit.

Paints should have been covered under cost audit.

Commnercial Vehicles and components should have been covered under cost audit.
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Re: Cost auditors feel let down by final rules;

Postby himalendubose on Mon Jan 26, 2015 4:25 pm

Rest I don't see much deviation interms of what was suggested by ICAI-CMA and what has been covered by MCA from Industry coverage perspective.
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Re: Cost auditors feel let down by final rules;

Postby himalendubose on Mon Jan 26, 2015 4:26 pm

This is still a good starting point from 2010 when we had only 1500 companies covered under cost audit and all format based nonsense reporting to MCA with no utility.
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Re: Cost auditors feel let down by final rules;

Postby himalendubose on Mon Jan 26, 2015 4:28 pm

Once Annual certification sets in then the scope for PCMAs will increase drastically and opportunity will come in terms of Internal audit especially.
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Re: Cost auditors feel let down by final rules;

Postby himalendubose on Mon Jan 26, 2015 4:29 pm

With Indirect Tax Reconcilation at company level and Porift reconciliation at company level retained in the revised CAR, advantage PCMAs in GST Audit
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Re: Cost auditors feel let down by final rules;

Postby himalendubose on Mon Jan 26, 2015 4:32 pm

Missed out Related party transactions at company level.
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Re: Cost auditors feel let down by final rules;

Postby himalendubose on Mon Jan 26, 2015 4:32 pm

All these three reporting segments are useful to CBDT and CBEC.
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Re: Cost auditors feel let down by final rules;

Postby himalendubose on Mon Jan 26, 2015 4:35 pm

Due to the above reporting at company level, cost auditors will get assignment in internal audit of the products not fully covered under CARR and CAR for a specified industry if any.
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