Backgrounder:
Ministry of
Corporate Affairs:
With
multi-product manufacturing and distribution ventures being the order of the
day, it has become very important to understand the exact cost of creating and
distributing every product and service at different stages so as to minimize
expenditure and ensure optimum utilization of resources. Costing is crucial to
determine pricing of products and services in every organization, which is
accountable to its stakeholders. This is where the role of a Cost and
Management Accountant (CMA) is critical, as this work cannot be done by just an
ordinary accountant.
A
CMA is a person who performs services like costing; pricing of goods or
services; prepares, verifies or certifies cost accounting; and prepares related
statements. A CMA’s job essentially involves an analysis of costs and to devise
ways to reduce it. Apart from this, the CMA is also expected to evaluate
operating efficiency and effectiveness of production and service management in
different departments of an organization.
This
analysis helps in comparing financial performances, making assessments and
projections, providing figures for future costing and pricing policies and
other related managerial decisions. He is the first whistleblower who tells the
Management on issues of purchase price, inventory, human costs and related
issues. He is also an efficiency auditor so that the company saves money and
time in manufacturing and distribution operations.
A
CMA is required to advice on profitable product mix, identify business risks
and ensure mitigation. The employment avenues for CMAs’ are various and can
range from holding key positions such as Chief Finance Officer, Chief Executive
Officer and Finance Manager, etc. to Chairman, Managing Director and Finance
Director in MNCs, Private and Public Sector, Central and State Government
Institutions.
The
Central Government has constituted an all-India cadre known as Indian Cost
Accounts Service (ICoAS) at par with other Class-I
services such as IAS, IFS, etc. to advise the Government in cost pricing and in
framing the appropriate fiscal and tax policies.
In
the field of education, cost accountants can be appointed as Assistant
Professor, Professor and Principal/Director/Head of an institution in
Universities and colleges in the areas of Management, business and
administration.
To
become a CMA a person has to qualify in the course offered by the Institute of
Cost Accountants of India which functions under the aegis of the Ministry of
Corporate Affairs. The candidates pursing a CMA course should qualify in the
three stages of the course. The 1st stage is called the Foundation
Course. Those who have passed plus two, or its equivalent, can apply for this
course. The 2nd Stage is called the Intermediate Course. Those who
have completed their graduation from any recognized University can directly
apply for admission in the 2nd Stage. Candidates who have passed all the sic papers
in the Intermediate Course can apply for the 3rd and Final Stage.
After passing the final stage of examination, one will become a Cost Accountant.
The Course can
be pursued from Four Regional Council offices of the Institute
located at Chennai, Delhi,
Kolkata and Mumbai and 92 Chapters located in various parts of India. The course
can also be pursued through a distance learning mode.
A
person, who has passed the Final examination of the Institute and has obtained
at least three years of practical experience, may seek admission to associate
membership of the Institute. The practical experience may be acquired prior to
or after passing the final examination.
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KKP