Institute of Cost Accountants of India

Member | Established: 1944 | Member since 1977

The ICAI-CMA, formerly the Institute of Cost and Works Accountants of India, was established in 1944 as a registered company under the Companies Act, and is the only recognized statutory professional organization and licensing body in India specializing exclusively in Cost and Management Accountancy. The Cost and Works Accountants Act of 1959 grants regulatory authority and responsibilities to ICAI with respect to Cost and Management Accountants. Membership is required for individuals who wish to perform cost accountancy work in India. ICAI-CMA is required to (i) maintain and publish a register of persons qualified to practice as Cost and Management Accountants; (ii) issue certificates of practice; (iii) prescribe initial professional development and continuing professional development requirements for its members; (iv) establish ethical, professional and technical standards; (v) monitor the performance of its members; and (vi) investigate and discipline members for misconduct. Members of the ICAI-CMA are not allowed to conduct financial statement audits unless they are members of ICAI and possess a certificate of practice issued by ICAI. In addition to being an IFAC member, ICAI-CMA is also a member of Confederation of Asian and Pacific Accountants and the South Asian Federation of Accountants.

View Jurisdiction profile

Statements of Membership Obligation (SMO)

The Statements of Membership Obligations form the basis of the IFAC Member Compliance Program. They serve as a framework for credible and high-quality professional accountancy organizations focused on serving the public interest by adopting, or otherwise incorporating, and supporting implementation of international standards and maintaining adequate enforcement mechanisms to ensure the professional behavior of their individual members.

Methodology
Last updated: 03/2018
We welcome feedback. Please email compliance@ifac.org

SMO Action Plan

Status of Fulfillment by SMO

• SMO 1: Quality Assurance

  In general, ICAI-CMA members do not provide statutory audit services and therefore the institute is not involved in the quality assurance (QA) reviews of statutory audits. Its members that are permitted to conduct statutory audits are subject to the QA review system of the Institute of Chartered Accountants of India.

  Although this is the case, its members are authorized to conduct the Maintenance of Companies Cost Accounts and Companies Cost Audit. This responsibility is only allowed to be conducted by members of ICAI-CMA. For companies to be issued a Certificate of Compliance as it relates to the maintenance of Cost Accounts and Cost Audit, it is required to apply Cost Accounting Standards and Generally Accepted Cost Accounting Principles that is issued by ICAI-CMA.

  Nevertheless, to ensure the quality of services provided by its members, a Quality Review Board (QRB) of ICAI-CMA was established in 2007 by the Ministry of Corporate Affairs in accordance with the Cost and Works Accountants Act of 1959 to evaluate and review the quality of work provided by members of the institute.

  In 2011, the QRB developed a Guidance Manual for Cost Audit and there were efforts to raise awareness among its membership in regards to the role of the QRB and the process of quality reviews. However, the institute reports that the QRB has not conducted any reviews since its inception. In lieu of the QRB, ICAI-CMA has established a Peer Review Board to conduct reviews of the work of Cost Accountants; however, no further information is available.

  In the next round of updates, ICAI-CMA is encouraged to clarify the status of the QRB and if there are future plans for it to conduct reviews. The institute is also encouraged to provide additional information on the Peer Review Board, its functions, and what types of actions it has taken, and if the system it follows incorporates the requirements of SMO 1.

  Current Status: Execute

• SMO 2: International Education Standards

  Under the Cost and Works Accountants Act of 1959, ICAI-CMA is responsible for establishing initial professional development (IPD) and continuing professional development (CPD) requirements for its students and members.

  The institute established a Board of Studies Committee, comprising of regulators and individuals from academia and the accountancy profession, and its responsibilities include reviewing the institute’s curriculum to ensure compliance with the IES requirements, and monitoring and incorporating updates from the various standard-setting boards into the curriculum. ICAI-CMA reports that a review of its curriculum and syllabus was conducted in 2016. The institute reports that the revised IES was considered during the revision; however; there is no indication or plans that a full review of its overall program against the IES will be conducted.

  In addition, the institute reports that all updates and pronouncements by the various standard-setting boards are distributed to members for their information.

  In the next round of updates, ICAI-CMA is encouraged to establish plans to conduct a full review of its IPD and CPD program against the revised IES as issued by the IAESB, which are effective in their entirety as of July 2016, with a view to adopt the standards and eliminate existing gaps. ICAI-CMA is also encouraged to consider participating in the international standard-setting process by responding to exposure drafts issued by the IAESB.

  Current Status: Plan

• SMO 3: International Standards on Auditing

  Although ICAI-CMA is not responsible for the adoption of auditing standards to be applied in statutory audits, the institute reports that it promotes and supports the convergence of auditing standards with ISA through its participation in the national standard-setting process as a member of the Audit and Assurance Standards Board of the Institute of Chartered Accountants of India (ICAI).

  Moreover, as the member body for Cost Accountants in India, it has established a Cost Audit and Assurance Standards Board and developed Cost Audit and Assurance Standards. As of September 2017, 19 standards have been issued.

  In addition, ICAI-CMA members are permitted to conduct statutory audits if they are members of ICAI. To support these members, the institute monitors pronouncements and updates by the IAASB and disseminates this information via its website. The institute also reviews its initial professional development and continuing professional development programs to ensure ongoing incorporation of the new and revised requirements into its programs. Lastly, ICAI-CMA also participates in the international standard-setting process by reviewing and responding to exposure drafts and other pronouncements issued by the IAASB.

  Given the significance of the new auditor reporting standards that became effective in December 2016, in its next round of updates, ICAI-CMA is encouraged to develop plans to promote the adoption of the latest ISA as issued by the IAASB to the relevant authorities.

  Current Status: Review & Improve

• SMO 4: Code of Ethics for Professional Accountants

  Under the Cost and Works Accountants Act of 1959, the ICAI-CMA is responsible for setting ethical requirements for its members who are CMAs and to this effect has developed a Code of Ethics for its members. In 2012, the institute reported that convergence with the IESBA Code of Ethics was an objective; however, as of 2017, it is not clear if the institute has progressed with the initiative as planned.

  ICAI-CMA reports that it makes the IESBA Code of Ethics available to its members, students, and the public via its website, and raises awareness of its members’ duty to adhere to the current ethical standards set forth by the institute. Additionally, it monitors and reviews updates issued by IESBA, and includes updates on ethics-related topics in its initial professional development and continuing professional development (CPD) programs. To this end, ICAI-CMA reports that it has enhanced its CPD courses on ethical requirements by including real case studies in its syllabus to educate and prepare members on potential issues they may encounter.

  In the next round of updates, ICAI-CMA is encouraged to consider developing plans to adopt the latest IESBA Code, which includes the NOCLAR standard, which became effective in July 2017. The institute is also encouraged to consider participating in the international standard-setting process by reviewing and responding to exposure drafts issued by the IESBA.

  Current Status: Consider

• SMO 5: International Public Sector Accounting Standards

  While ICAI-CMA is not responsible for the adoption of public sector accounting standards in India, the institute reports that it supports the local standard-setting process by providing technical support and input into the work of the Government Accounting Standards and Advisory Board (GASAB). In addition to technical support, the President of ICAI-CMA sits on the GASAB. The institute reports that at the GASB, it promotes the need to adopt IPSAS; however, no other activities have been reported.

  ICAI-CMA is encouraged to consider disseminating updates by the IPSASB to its members in order to raise awareness of the benefits and importance of adopting IPSAS. In addition, the institute is encouraged to consider developing a plan with defined timelines to promote the adoption of IPSAS and to update the SMO Action Plan with these respective activities.

  Current Status: Execute

• SMO 6: Investigation and Discipline

  Under the Cost and Works Accountants Act of 1959, ICAI-CMA is responsible for investigating and disciplining (I&D) its members and to this effect, the institute has established a Disciplinary Committee to conduct investigations and to review complaints received. The Board of Discipline is ultimately responsible for either dismissing the complaint or handing out sanctions.

  In 2011, ICAI-CMA reports that it commenced a review of its I&D system, and in 2012 began drafting a report identifying gaps and suggested actions to align its system with the requirements of SMO 6. However, since 2012, the institute has not provided further information regarding the results of the review and gaps identified or if this initiative was completed as intended.

  The institute reports that it promotes compliance by its members with applicable ethical, professional, and technical standards as well as relevant laws through its continuing professional development program and is also active in raising awareness of the consequences of non-compliance to its members and the general public. However, no specific actions have been indicated.

  In its next round of updates, ICAI-CMA is encouraged to conduct a review of its I&D system against the requirements of SMO 6 (revised 2012) and report on its system’s extent of alignment as well as any plans to address gaps identified. Additionally, the institute is encouraged to provide an update on the various activities as reported in its SMO Action Plan related to SMO 6. Finally, ICAI-CMA is also encouraged to report in its SMO Action Plan on the number of cases it has investigated and the results of those investigations.

  Current Status: Consider

• SMO 7: International Financial Reporting Standards

  Although the ICAI-CMA is not responsible for the adoption of accounting standards in India, the institute participates in the local standard-setting process as a member of the National Advisory Committee for Accounting Standards (NACAS), a body that was setup by the Indian government to approve accounting standards in the jurisdiction. ICAI-CMA’s President is a member of the committee.

  ICAI-CMA indicates that it supports the implementation of IndAs by providing education and training for its students and members through its initial professional development (IPD) and continuing professional development (CPD) programs. The institute has also launched an online certificate course on IFRS for its students, members, and other individuals interested in learning about the standards. The institute reports that it monitors pronouncements issued by the IASB and disseminates them to its members.

  As ICAI-CMA members are primarily Cost and Management Accountants, the institute has established the Cost Accounting Standards Board (CASB) to issue its own Cost Accounting Standards (CAS) which members must apply when attesting financial statements. As on September 2017, 24 CAS have been issued by the CASB.

  ICAI-CMA is encouraged to update its Action Plan with recent activities it is undertaking to support its members with the implementation of cost accounting standards. In addition, the institute is encouraged to consider promoting the adoption of IFRS and IFRS for SMEs in the jurisdiction.

  Current Status: Review & Improve

Disclaimer

IFAC bears no responsibility for the information provided in the SMO Action Plans prepared by IFAC member organizations. Please see our full Disclaimer for additional information.