The Institute of Cost and Works Accountants of India (Icwai) is evolving new cost audit standards for companies selling products. There are 27 new standards in pipeline that are set for launch by 2012.

At present, the cost auditors adhere to 12 standards. R Venkataraman, Icwai president, told FC, We realise that a product cannot be totally audited based on just 12 standards. After consultations with all stakeholders, we have decided to add another 27 new standards to the existing ones.

Under the Companies Act 1956 only 44 products need to undergo mandatory cost auditing. These include air conditioners, aluminum, caustic soda, cement, cycles, dyes and electricity among others.

These standards are basic parameters set by the institute based on which the cost accountants audit a company. Among the newer standards, even environment costs would be a part of it. Salman Khurshid (minister for corporate affairs) has shown eagerness taking into consideration the environment costs, Venkataraman said.

He added that the institute would shortly consult corporate affairs and environment ministries for developing cost audit standards on climate. A corporate affairs ministry official, however, said that MCA is yet to hold discussions with the environment ministry. With Copenhagen coming up this is not the right time to broach a new subject. But, the idea will find a lot of support, he said.

Some of the newer standards that are under consideration would include pollution control expenses, distribution and marketing overheads, depreciation, stock valuation and cost of conversion.