Difference between ICWAI & CA ?

Question

In India, there is Charted Accountants (CA) and Indian Institute of Cost & Works Accountants of India ( ICWAI) certifications. What are the differences of these? Which one does have (higher) international recognition? Which is preferable for some one in his late 30s?

Answer 1

 CMAs in Nation Building – Today and Tomorrow

Chairman’s speech at the 51st

National Cost Convention at Fortune Park,

Panchwati, Howrah, on April 23rd

, 2010.

Ladies and gentlemen, let me use the 51st

National Cost Convention platform

to place a few critical questions. The answers are within you.  

1. Can a resurgent India, our Incredible India, hope to be the best

economy in the world without the help of Cost and Management

Accountants?

2. Are CMAs set to be the future leaders of Indian industry and

commerce? The expert committee’s recommendations talks about

widening the area of cost audit beyond 44 industries and products. Is

this enough?

3. It is good that all manufacturing companies with a paid-up capital of

Rs 50 crore or more will be required to conduct a statutory cost audit,

which would bring about 25,000 firms within the ambit of cost audit.

The proposed changes will have major positive impacts on the

profession, because more firms will have to mandatorily appoint a cost

auditor and have cost accounting records audited on an annual basis.

But will big industries go for this just because it is the rule book says

so, or will there be a real understanding of the benefits of the

underlying principles of cost auditing?  

4. If large corporations or large government billing exercises can’t work

without the help of Cost and Management Accountants, isn’t it natural

to accept them as part and parcel of Nation Building?  

5. At present, over 1,800 cost accounting professionals practise in India,

against 46,000 qualified people. Probably the new developments would

change more qualified ones into independent practitioners. Isn’t this

the first door to steps beyond financial accounting?  

In the face of it, they are very simple questions. But you know, the answers

aren’t as simple. Even after the world really got serious about cost

accounting, or management accounting in the late Eighties, the subject

remains in the nascent, almost academic stage in India. Yet, the new policies

of the government would be neutralized without the active participation of

this group.

Take the Goods and Services Tax regime, for example. This is a nationwide

change in indirect taxation, and we all know that cost accountants are

specialists in indirect tax. They should have very important roles in this regime for the change to take place efficiently. The government is the biggest

spender. So cost audit is essential in that area.  

Good news is that the government has finally been seen as proactive. With

new cost accounting standards made applicable from April 1, and with six of

the 10 new standards made compulsory, the government has gone the right

way in trying to improve cost auditing.

The idea is yet to become big, companies are yet to make the best use of its

principles and objectives. Maybe it really needs a big setback for controls to

set in. When you are young and earning plenty, you tend to over spend, you

buy the best car to try and impress, you take the best holidays, the best

jewellery. It is only when the tap runs dry you realize that maybe you have

not saved well, or probably you should not have spend the way you did.

Hindsight, they say, is always 20-20. But cost accounting is a science that

aspires to not only give you that hindsight, in advance, but by applying the

various methodologies of cost accounting you can see through and analyse

better than 20-20.

Isn’t that a great tool for planning, and for policy-making – a tool that can

lead a person to head an institution or organization and run it successfully?

Let me affirm with confidence that the CMA has all the trappings of a global

CEO in terms of the profile. Global business is a numbers game. Look at any

aspect and there is quantification, there is measurement. There are numbers

and more numbers, everything from policy formulation to pricing, quality,

marketing, performance measurement and customer satisfaction is expressed

in numbers. To quote Jack Welch, “numbers aren’t the vision, numbers are

the product.” In this ever-expanding world of numbers management

accounting gives a solid base to the CEO aspirant.

After all, as it is often said, “If you cannot measure, you cannot manage.’

As a discipline, management accounting works at the beginning of the value

chain, supporting decision-making, planning and control. The management

accountant, therefore, has an inherent cutting edge over other educational

backgrounds by way of acquiring a sound perspective to business

understanding and strategic decision making. That is the most fundamental

pre-requisite in the profile for a CEO. In a number-ruled world, this man has

a natural advantage in the areas of analysis, interpretation and presentation.

The CEO, unlike the proverbial horse, needs 360-degree vision. He has to set

his sight on ALL elements of the product and marketing mix at any given point of time. The product may be right, the pricing may be right, the

positioning may be right, but a minute variance in logistics or currency may

severely hit the scorecard. Handling this critical, multi-pronged scenario with

continuous balancing of internal and external factors is, to my mind, a

specific USP of a management accountant.

I always feel that we cannot keep CMAs at arm’s length anymore; we cannot

any more believe that financial accounting is the cure for all our ills. In

turning around companies like Jessop, Falcon and Dunlop we have been able

to use cost accounting to the best effect, successfully instilling control in the

different processes.

And if I may say in all humility, I am also a member of both the professional

institutes of Chartered Accountants and Cost Accountants, and most recently

in dealing with the most difficult situation of handling the affairs of Falcon

Tyres – which was under pressure through the great recession period of 2008

– I preferred the principles of cost accounting over financial accounting to

derive contribution charts based on the costing principles. This we made a

complete U-Turn in the profitability of the company.  

This success example of Falcon Tyres is being made available to other companies in the

Ruia Group. Therefore it is there for you to see you to see that CMAs are quite competent

to become the CEOs of global companies and are certainly nation builders, not only for

today, but for times to come.

Thank you.

Answer 2

Really great discussion. i get great knowledge about the course.

Answer 3

 Before going to decide on suitability of Chartered Accountants (CAs) and Cost Accountants ( ICWAs) for a particular statutory authority ( Salutatory Financial Audit or Cost Audit or Tax audit or Sec 14a and 14AA or any thing) there are certain points to be considered. Both the institutions are claiming , that their institute is more suitable than other. The points are..

1.SYLLABUS CONTENTS OF CA AND ICWA COURSES AND FOCUS : Right from the beginning Institute of Chartered Accountants of India (ICAI) is focusing only on Accounts, Taxation and it does not have strong focus on the internal industry or company management practices .On the other side , ICWAI , included Cost Management Accountancy , Operations Management for strong focus on the internal industry or company management practices . The ICWAI has strong focus on the above subjects and also has very strong focus on Accounts and Taxation. ICWAI has focus on Cost and Management Accountancy , the strong structure of Cost and Management Accountancy is obviously based on the strong foundations of accounts and Taxation.. International Institutes specialized in Management Accountancy have MOUs with ICWAI. So, ICWAI is the sole authority for Management Accountancy . And obviously it states ICWAI is equally strong like CA on Accountancy, Taxation and Audit ( even more strong and advanced than ICAI , because Management Accountancy is based on strong foundations of Accountancy, Taxation)—A person can become a good Judge (like Cost Management Accountancy) only if he is good at law (like Accountancy, Taxation and Audit) .

2.THE FINANCIAL MANAGEMENT PART : Initially in the syllabus of ICAI financial management was not a part. Later for a long time CA did not have Financial Management in its syllabus. This indicates members of ICAI and ICAI are not serious about Fin Mgt. Then how they are eligilible for the posts like VP-Finance, Director-Finance, CFO etc and finance posts?. One more point is “Institute of Chartered Accountants of India (ICAI) does not have strong focus on the internal industry or company management practices”

3.THE RATIONALE BEHIND ASSOCIATE MEMBERSHIP : To become Associate member of ICAI, passing of Final exam of CA is sufficient by satisfying article ship .The three years period of article is considered as three years of experience and Associate ship is given in ICAI.

But , if you consider ICWAI the associate membership will be given if the candidate passes Final course of ICWAI and possesses three years of responsible experience. Definitely becoming Associate of ICWAI is difficult and worthy compared to three years of articles experience.

If we compare the required three years of experience for Associate Membership in ICAI and ICWAI

(a) In case of Articles of ICAI specific responsibility is not fixed on person (student) , but in case of ICWAI ( the candidate is mostly employee) the three years of experience is in a job where job responsibility is fixed.

(b) most of the times, in ICWAI the person works and deals in the system of an industry where management practices and finance functionals are present and he learns industry, management and finance practices.

(c ) The article ship experience is an experience gained as a student , i.e. . Normally understanding or working with half or zero knowledge(they are beginers in learning). In case of ICWAI the three years of experience is with in job responsibility . If it is experience as semi qualified of fully qualified , then it is the experience gained with sound subject understanding.

So in case of ICWA , the knowledge gained is more worthy and sound. The depth and scope of learning is more before becoming Associate Member in ICWAI compared to CA.

For better quality in education and knowledge , ICWAI should not think about introducing article ship in its course.

ICAI ALSO SHOULD SERIOUSLY RE-THINK ABOUT ITS ARTICLES AND PROCEDURE OF ASSOCIATE MEMBERSHIP . IT SHOULD EITHER AVOID ARTICLES OR SHOULD FOLLOW THE PRACTICES OF ICWAI FOR ASSOCIATE MEMBERSHIP.

Please read the following link without fail.

http://www.caclubindia.com/forum/icwa-articleship-training-vs-ca-articleship-training-81612.asp?1=1&offset=1

4.IGNORING INDUSTRIAL, MANAGEMENT PRACTICES, AND AUDIT : CAs don’t know really much about management practices of Finance ( because only ICWAIs are management accountants , ICWAIs are fully aware of Accounts and Management) , then how CAs are eligible for audit? Even during Articleship also mostly they work under Auditor , not in industry , that also without having attachment to responsibility. A person without Management practices or Industrial Practices is not eligible for audit of organsations. A person can become a good Judge (like Cost Management Accountant) only if he is good at law (like Accountancy, Taxation and Audit) . So “Management” cannot be tagged to CA.

5.THE DYNAMICS OF SYLLABUS CHANGE : ICAI is not active in updating in syllabus and passive in equipping its students and members to the changing dynamics. Because of the statutory protections that ICAI has , ICAI is mild and passive in changing syllabus. The same can be understood by observing its syllabus changes right from its inception. Financial Management is introduced lately, the dynamic Management Accountancy has no much role .Even now ICAI is trials for Special Audit under Sec 14A , 14AA indicates its under dynamism and passive nature. By saying Indirect Tax is a part of CA curriculum it claims for 14A and AA. Let us accept their argument is correct, then

(A).Why did they take this much of time to realize that they have Indirect Tax . Weren’t they aware of the same from several years? ( ICAI is so mild , passive and under dynamic. It is surviving with unfair practices )

(B).If having a subject is sufficient for Special Audit, then ICWAI can claim “we are best fit for the posts like Production Manager, COO, because Production and Operations Management is part of ICWAI curriculum”. .

Without any basic idea on Production and Operations Management , how ICAI can claim for 14AA.

Because of the failure and inability of ICAI in dealing with Finance and Management practices only ICWAI came into existence. Otherwise ICWAI would not have come into picture. Now after several decades , ICAI is claiming “we have expertise of ICWAIs also”. This is like claiming of Type Machine that “I am more suitable than computer in data management”.

One thing is to be remembered “Quality means fitness through knowledge not through ignorance” (see 8.Ignornce and Super ignorance : )

6.THE HARD WORK BEHIND PASS : Persons doing both CA,CWA simultaneously are facing difficulty in passing ICWA than CA. Persons who registered for both CA and ICWA simultaneously are completing CA earlier than ICWA. Number of CAs1,50,000 & ICWAs 40,000. CA syllabus less than ICWA , ICWA syllabus is more. Pass percentage of CA is more.

7.COMARISION WITHOUT STATUTORY PROTECTIONS AND SOUNDNESS: The Institute of Cost and Works Accountants of India is the only Institute in India that has in its syllabus and training contents the proper blend of cost and management accounting, finance and non-finance subjects required for professional Management and Accounting functions. Needless to mention that in the Finance and Management Accounting Committee of the International Federation of Accountants – earlier known as FMAC and now known as Professional Accountant in Business Committee – ICWAI was represented since its inception and not ICAI. ICWAI syllabus covers in-depth company accounts. It is time to conduct company audits also like CA. How is the idea to open Income Tax Audit to CWA and also remove CAs from VAT Audit as it is indirect tax feild? ICWAI academic filtration is far more superior and tough than simple CA. World wide, management accountant has better acceptance than ordinary/simple CA. International bodies recognized ICWA and as qualification equal to their international standard course and allowed ICWAIs to practice in their countries.

And those international bodies gave mutual recognition between their course and ICWA.

But, CA is not given such recognition and ICAI is struggling to get such recognition.

8.IGNORNCE AND SUPER IGNORANCE : Without knowing the above facts , ignorantly some people feel CA is difficult and they have good knowledge than ICWA. They are ignorant people. There is another category , this is SUPER Ignorant people . These people take opinion of these ignorant people and say CA is difficult . The third category people , they argue CA is ultimate in Finance and Accounts and all statutory powers should be given to CAs . These people show the sample of ignorant and super ignorant peoples’ opinion to prove their argument.

The Accounting Institutes should focus more on improving standards of their education and courses instead of trying to propagate lies about other institutes.

Normally people who are not capable to improve their standards try to interfere into others matters. their policy is "we will not improve ourself , instead , we will try to lessen others by spreading lies , by doing this we can be on the top... survival by blaming".

Unfortunately , I heard from some professionals saying "ICWAIs are not fit for higher positions in finance , they know only costing , but nothing about accounts and taxation.. ICWAI is very very easy". If an illeletarate speaks like this , then it is OK. But how a qualified person is so ignorant about ICWAI?. Didn't his education give that much of minimum knowledge atleast?. Is it his ignorance OR lack of proper literacy ( lesser standard of education) OR arrogance that makes him an unfit manager?

We would have not seen satyam like frauds , if professionals try for fairness and quality.

9.IS THE RESISTANCE FROM ICAI FOR NAME CHANGE PART OF SELF DEFENSE? : Cost accountants are also called Management Accountants all over the world in UK , US, Canada and even in Pakistan and Bangladesh also. Why that recognition is not given by Indian Govt? Even for name change also govt is not ready. Is this to standardize the argument in point 8?. This is resistance to change. ICAI does not allow competition. ICAI does not have respect to India's parliamentary system and sovereignty. Existence of Chartered indicates the same. It is an insult to India's parliamentary system and sovereignty. They were made laughing stock by ICAI. ICAI should focus on improving its quality their quality instead of following unfair practices to suppress other competent bodies like ICWAI .

Why ICWAIs should not be defined under Section 288(2) of the Income Tax Act?

We are experiencing the frauds of audit by CAs ( recently Satyam).

Why CA has more recognition than ICWA in spite of

• Easiness

• Less syllabus

• Less focus on management and financial management practices compared to ICWA

• With less dynamism in syllabus change/ up gradation compared to ICWA

• Easier way of becoming associate member compared to ICWA

If "ICWAI is so easier than CA and CAs are also equally specialized in Management Accountancy like CMAs passing ICWA is so easy " is really true, then, we would have seen 1,50,000 Cost Accountants, not 40,000.

Answer 4

Hi,Chartered Accountants  are Audit and Account experts. Beyond maintaining accounts in a firm, their work includes Accountancy, Auditing, Cost accountancy, Taxation, Investigation and Consultancy. Accounting and Financing are integral part of any business establishment, whether it is public sector or private sector. CAs are therefore highly in demand because of their capability to provide complete business solution. A career in Chartered Accountancy is much sought after because they possess the knowledge of identifying risks and designing control mechanism to counter those risks. Professional advice in taxation also comes under the CAs. CA course provides a scope to work with big corporate houses. Opportunities include in private or public organizations. One can also opt for starting his/her business. Today almost all strategic industries like, engineering, chemical, pharmaceutical, steel and oil and service sectors including telecommunication and agriculture sector have been brought in the statutory Cost Accounting and Cost Audit net. Besides joining the Private Corporate Sector, Cost Accountants can also consider working in the public sector- in the Civil Services, the Central Government has constituted an all-India cadre known as Indian Cost Accounts Service 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. A cost accountant may also build up a practice by obtaining a license from the institute, either individually or in partnership with one or more members of the institute. Work experience is always helpful, but work experience is not required for any of these courses.
More information you get here:
http://commerce.entrancecorner.com/chartered-accountants/introduction.html
http://commerce.entrancecorner.com/icaw/introduction.html

All the Best.......