Prof. D. Mukhopadhyay
The Institute of Cost and Works Accountants of India (ICWAI) was established in 1959, with the objective of promoting, regulating, and developing the profession of cost accountancy in India. Despite its significant contributions to Indian economy, the present Institute of Cost Accountants of India may aptly be described as the undesired brother of the Institute of Chartered Accountants of India(ICAI) and the neglected son of the Government of India. Of late, two recent incidents, CA V. Venkata Sivakumar Vs. Institute of Cost Accountants of India and ICAI Vs. The Institute of Cost Accountants of India led to reaching such a conclusion. Institute of Cost Accountants of India(erstwhile ICWAI) made representation to the Central Government for rechristening ICWAI to Institute of Cost and Management Accountants of India(ICMAI) dates back to 1971 when all the professional bodies of cost and works accountants across the world either changed or in the process of changing their names to the Institute of Cost and Management Accountants/Certified Management Accountants/Management Accountants and so on out of the consequence of evolving development in the scope and functional role of the erstwhile cost and works accountancy profession. The most glaring examples are Institute of Cost of Management Accountants of Pakistan changed from the Pakistan Institute of Industrial Accountants by the Cost & Management Accountants Act 1966 and Institute of Cost and Management Accountants of Bangladesh by President’s Ordinance , 1972 after breaking away of Pakistan and birth of Bangladesh in 1971. Both the institute’s common founder father was M. Soaib, the first President of the Institute of Cost and Works Accountants of undivided India, incorporated on 14th June, 1944 under the then Companies Act, 1913 and later, that ICWAI, a Company Limited by Guarantee was dissolved by dint of the Cost and Works Accountants Act, 1959 , the new ICWAI, a body corporate came into existence on 28th May , 1959.
Objectives of ICWAI , inter alia were to develop Cost Accountancy as a vibrant Profession . ICAI, constituted by dint of the Chartered Accountants Act, 1949, opposed to constituting another body of Professional Accountants viz. Cost and Works Accountants. However, Indian leadership decided to enact the Cost and Works Accountants Act to establish the ICWAI, taking into cognizance the role of the cost accountancy profession in bringing about economic development and its contribution to nation building. It has now been more than five decades since the request to change ICWAI to ICMAI is pending with the central government in spite of the recommendations made by the Parliamentary Standing Committees on Finance. In 2011, the Bill was placed in Parliament by the Minister of Corporate Affairs just administering a small amendment to change ICWAI to ICMAI, but ultimately it was changed to the Institute of Cost Accountants of India and the Members’ Designations changed to ACMA and FCMA from AICWA and FICWA respectively . It is on record that ICAI has been opposing the name change of the ICWAI since inception, and the change in nomenclature of ICWAI took place – Ref. Cost and Works Accountants [Amendment Act 2011(Act No 10 of 2012] not as per the request of the ICWAI and the long cherished desire of its members. Immediately then arises a new problem before the Institute of Cost Accountants of India the changed name from ICWAI about its Acronym and the Institute of Cost Accountants of India started to use ‘ICAI’ which is also the acronym of Institute of Chartered Accountants of India. CA V. Venkata Sivakumar, one of the members of the ICAI, filed a petition at the Judicature of High Court in Madras to direct the Institute of Cost Accountants of India to use ‘ICoAI’ as an acronym and stop using ‘ICAI’ as it is the registered Trademark of the Institute of Chartered Accountants of India. The Madras High Court dismissed the plea of CA V. Venkata Sivakumar. Thereafter, the plaintiff appealed to the Supreme Court and the Hon’ble Supreme Court also dismissed the plea and issued no direction to the Institute of Cost Accountants of India to use ‘ICoAI’ as its acronym and stop from using it ‘ICAI’ as an acronym. Finally, the ICAI filed a petition at the Delhi High Court and the Hon’ble High Court at Delhi restrained the Institute of Cost Accountants of India from using the acronym ‘ICAI’ by delivering its judgement on 21st March, 2023. Under the given situation, the Institute of Cost Accountants does not have an appropriate acronym.
Institute of Cost Accountants of India is represented by about 90,000 professional stakeholders as ACMA/FCMA or waiting for admission to ACMA/FCMA and more than 6 lakh students on roll whose career prospects seems to be gloomy in international employment market because of the present name of the Institute . Any law, whenever is enacted, normally it takes care of the principles of ‘fairness, justice and equity’. In the case of Institute of Cost Accountants of India , it is high time to review whether the members and students are treated in terms of the parameters as mentioned above. Programs curricula, education standards and training, internship, professional competence and pass percentage are highly competitive and are at par with the highest standards set by the international professional bodies of accountants , the International Federation of Accountants(IFAC) who is the standard setting body of both the Chartered/Public Accountancy and Cost and Management Accountancy Professions across the globe .
The name of any institute should reflect the objectives, functions and objectives for which they are created. The proposed name change of ICWAI aimed at aligning the institute’s name with international standards and reflecting the changing role of cost accountants in the business world evolved in the last 100 years. However, ICAI has been opposing the name change, arguing that it would create confusion among the public. In this context, it may be argued that the primary focus of an institute is considered when naming the institute or any organization. For instance, ICAI’s expertise and specializations is well acknowledged as the domain of financial accounting audit and taxation, whereas the primary focus of the Institute of Cost Accountants is costing, management accounting and internal reporting , cost measurement and analysis for decision making and ensuring organizational sustainability which is also well recognized by the society. Therefore, at no point of time the proposed Institute of Cost & Management Accountants(ICMAI) shall discharge the role of the ICAI and the same limitations are applicable to the ICAI and the battle between ICAI and the Institute of Cost Accountants of India is neither tenable nor sustainable.
The name change issue highlighted the ongoing contention between both institutes , who have often been at odds over various issues, including the scope of their respective professions and the recognition of their qualifications. The underlying issues between the two institutes are likely to persist, and there is a need for greater cooperation and collaboration between the two bodies to promote the interests of both Chartered Accountancy and the Cost & Management Accountancy Profession in India. Moreover, if the United Kingdom, USA, Canada, Pakistan, Bangladesh, Sri Lanka, Papua New Gunea and other countries have been able to adopt international standards and designations such as “Certified Management Accountant,””Management Accountant,” or “Cost and Management Accountant, Chartered Management Accountant” without facing any objections then why Chartered Accountants and Cost & Management Accountants fraternity cannot coexist in India ?
Moreover, the Institute of Cost Accountants of India, has been advocating for the change of its name to reflect the evolution of the cost accountancy profession to include management accounting. The erstwhile ICWAI and current Institute of Cost Accountants of India, has been promoting the concept of cost and management accountancy as an integrated profession that provides decision-making information to management. The proposed name change to ICMAI is in line with the international trend of combining cost and management accounting into a single profession.Both professional bodies have their unique roles , objectives and identities. Further, under NEP, 2020, learners are given complete autonomy to choose their career options and not compel anyone to take a particular subject or discipline. Ours is a vast country and learners must have multiple choices to select a career option. Both the institutes should coexist with professional harmony as ICAEWand CIMA or elsewhere with their distinct professional identities, as the ICAI and ICMAI. It simply seems to set the clock backward. If the proposed ICMAI is not given parliament’s due approval. Chartered Accountancy and Cost & Management Accountancy are different professions, just as Civil Engineering and Electronics and Instrumentation Engineering are different branches of engineering. Therefore, the government of India should resolve the professional conflicts between ICAI.and the proposed ICMAI once for all.
(The author is a Bangalore-based educationist and management scientist.)
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