The Institute of Cost and Works Accountants of India (ICWAI) has opposed the Companies Bill, 2008.

Representatives of the institute will meet minister of state for company affairs Prem Chand Gupta next month, as it fears abolition of cost auditing by cost accountants with passage of the bill. The 40,000-member body has suggested amendments to the bill as it feels cost accountants will become virtually redundant once it’s passed.

Manas Thakur, vice chairman of the Eastern India Regional Council of ICWAI, said, ?Section 131 of the Companies Bill, 2008 has omitted the qualifications necessary for persons wanting to do cost auditing. This leaves scope for financial auditors to do cost auditing.?

In the existing Companies Act, section 233B mentions that the cost auditor should be a cost accountant in accordance with the Cost & Works Accounts Act, 1959.

Section 124 (1) of the bill mentions that a person will be eligible for appointment as an auditor of a company if he is a practising chartered accountant. Moreover, Section 124 (2) mentions that where a firm is appointed as an auditor of a company, only the partners who are practising chartered accountants shall be authorised by the firm to act and sign on behalf of them.

?In the new bill, the qualifications of the cost auditor are same as those of the financial auditor. But according to the Company’s Act, a financial auditor must be a chartered accountant as defined in The Chartered Accountants Act, 1949. But there are no specific qualifications for a cost auditor,? Thakur said.

?This leads to the conclusion that chartered accountants can now do cost auditing by default,? said council treasurer Pallab Bhattacharya.

?We will ask Prem Chand Gupta to take up the issue,? said Thakur. The council is also lobbying with Left Front MPs to push the proposed amendments.

The council has also demanded a fine for cost and chartered accountants in case of any error in auditing. It will also put forward its demand for similar provisions relating to appointment, remuneration, disqualification, and rights and privileges for financial and cost auditors.