Cost accountants fear their profession may become redundant as the budget has allowed chartered accountants to do excise audit, which was their exclusive domain.
Allowing chartered accountants to conduct excise audits under sections 14A and 14AA of the central excise act is unfair and an unjustified move, which discriminates against cost accountants, Kunal Banerjee, president of the Institute of Cost and Works Accountants of India, told News.
He said the Finance Bill had sought to dilute the expertise of cost accountants, whose role had been well defined by Parliament in the cost and works accountants act.
Audit under sections 14A and 14AA were till now the exclusive domain of cost accountants as these special assignments require particular expertise relating to the application of cost accounting principles and techniques, Banerjee said.
The audit under section 14A of the central excise act relates to the valuation of goods for the purpose of the levy of excise duty. The audit under section 14AA relates to the utilisation of Cenvat (central value added tax) credit.
He said that if the intention of the legislature was to equate both professions on an equal footing, cost accountants should immediately be recognised under the definition of accountants in section 288 of the income tax act.
Financial audit and income tax audit, which are important areas for a companies audit, are already with chartered accountants. Why are they being allowed to enter the small exclusive domain of cost accountants? said Banerjee.
Cost audit is a mechanism to provide assurance about the integrity of cost information to regulators and government departments.
Auditing under section 233(B) of the Companies Act 1956, excise audit under Section 14A of the central excise act and special audit under section 14AA of the central excise act are the main revenue generating areas for cost accountants.