- Fees: ₹ 6,000
What is Cost Accountancy
Cost Accountancy is a branch of study in the commerce stream, concerned with costing and the application of the principles, techniques and methods of cost accounting to the practice of cost control. Candidates who opt for a profession in cost accountancy learn how to handle the adjustment, collection, auditing and analysis of financial statements. The purpose of these actions is to analyse profitability and prepare budgets. A cost accountancy professional collates numbers which include data about bonuses, wages, operating policies and planning systems into reports which then assist the management with decisions.
Eligibility Criteria (UG & PG) of Cost Accountancy
The CMA course is conducted at three stages. The eligibility criteria for each stage is given below.
Candidates are eligible if they have passed class 10 or any equivalent examination from a recognised board
Candidates must have passed their Senior Secondary Examination (10+2) from a recognised board or an equivalent examination as recognised by the Central Government.
Other than that, they are also eligible if they have passed the National Diploma in Commerce exam conducted by the AICTE or any State Board for Technical Education which resides under the authority of AICTE, or a Diploma in the Rural Service Exam which is held by the National Council of Higher Education.
Students must have completed their Senior Secondary Examination (10+2)
Students must have completed their CMA Foundation course offered by the Institute of Cost Accountants of India
Students must have received a graduate degree in any discipline other than the Fine Arts
Students are eligible for the CMA Final course if they have completed their CMA Foundation and the CMA Intermediate courses.
Entrance Exams for Cost Accountancy
For a career in Cost Accountancy, students must undertake the CMA (Cost Management Accountancy) course offered by the Institute of Cost Accountants of India (ICAI). The course is offered in three stages: Foundation, Intermediate, and Final. Students must complete the CMA course from the ICAI by applying for the CMA Foundation Course immediately after class 12, followed by the CMA Intermediate Course after completing graduation, and finally the CMA Final Course. Upon completion of all these stages, students are called Cost Accountancy professionals or Cost Accountants.
Scope of Cost Accountancy in India and Abroad
Cost Accountancy has long eluded popularity as a course of study in India. While considered almost the same as its more popular sibling, Chartered Accountancy, Cost Accountancy has struggled for quite some time in terms of salaries and scope. This is because Chartered Accountancy is a more versatile career with scope in businesses of any size, whereas Cost Accountancy is required mostly in service and large production companies. Over the last few years, however, Cost Accountancy has begun to see a rise in importance owing to the economic growth being witnessed by India, with large foreign businesses pouring into the markets and the Make in India movement.
What sets Cost Accountants apart from pure accounting professionals is that the demand for these accountants is high across various functions in any organisation. A CMA can prepare quotations in the marketing department and offer advice on the most profitable product mix in the production department. After completing the course in ICAI, CMA candidates can receive employment opportunities in numerous organisations where they are required to reduce costs and optimise accounting operations.
Course Fees Cost Accountancy
Each stage of the CMA course has several papers that the Cost Accountancy students must attempt examinations in.
CMA Foundation papers:
Paper 1: Fundamentals of Business Mathematics & Statistics
Paper 2: Fundamentals of Law and Ethics
Paper 3: Fundamentals of Accounting
Paper 4: Fundamentals of Economics & Management
CMA Intermediate papers:
Paper 1: Company Accounts and Audit
Paper 2: Indirect Taxation
Paper 3: Cost and Management Accounting
Paper 4: Operation Management Information System
Paper 5: Cost Accounting & Financial Management
Paper 6: Direct Taxation
Paper 7: Laws, Ethics, Governance
Paper 8: Financial Accounting
CMA Final papers:
Paper 1: Financial Business and Business Valuation
Paper 2: Cost & Management Audit
Paper 3: Corporate Financial Reporting
Paper 4: Strategic Performance Management
Paper 5: Tax Management & Practice
Paper 6: Business Strategy and Strategic Cost Management
Paper 7: Advanced Financial Management
Paper 8: Corporate Laws & Compliance
Careers in Cost Accountancy
A career in Cost Accountancy entails many important responsibilities revolving around the financial processes of a company. While the field has enjoyed limited popularity in the past, the prospects are expected to increase in the coming years. With the rising need among businesses for assistance with financial operations and business accounting, the need for cost accountants is on the rise as well. There are many opportunities for professional growth in this career. While establishing oneself at the entry level may be challenging, career advancement can be quite rapid. In terms of remuneration, too, a career in Cost Accountancy can be quite rewarding. One can live a comfortable life on the salary earned in this profession.
Popular Online Finance Courses and Certifications
With innovations and technologies cropping up around the world, the global economy continues to introduce new trends in its functions and operations. Organisations, too, keep up with these trends by reshaping their business models and business processes. Some of the latest changes that are underway in the cost accountancy world today are:
Cloud-based Accountancy Solutions:- Cloud technology has been gaining momentum in the last few years and has consequently been making big waves in the business world. The use of shared resources has made financial information more easily available, and therefore, processes become more efficient.
Automation of Accountancy Functions:- Software advancement has lately fuelled automation of processes in accountancy. Today, accounting functions can be automated to a great degree, negating any requirement for physical intervention. By minimising data entry, organisations are now able to better manage resources and utilise capital more efficiently.
Outsourcing:- Many businesses have taken to outsourcing their accountancy function because this helps them focus better on their core operations. Not only small and medium-sized companies but large organisations too are outsourcing their processing and accounting functions to BPO (business process outsourcing) vendors. Another trend includes the outsourcing of the entire accountancy function to a third-party provider. These providers offer end-to-end support, along with a customised accounting solution and corporate resources.
Transparency and Objectivity:- Certified public accountant boards and other accounting governing bodies highly emphasise the importance of transparency and objectivity in accountancy. This trend is in the interest of restoring and upholding credibility and trust with customers.
Data Analysis:- With the ushering in of big data and mining of data, there have been countless advancements in database techniques, data centres, and software. This has, in turn, caused an advancement in the handling of what is considered the key factor in financial decisions: information. In recent years, data analysis of financial and accounting information has become the focus of accountancy trends.
Job Profiles and Top Recruiters
Job Profiles in Cost Accountancy
With a high demand for Cost Accountancy degree holders in many sectors such as government, private, research and training, education, finance, public utility and service; there are numerous job profiles available to these candidates. Some of the top job profiles include:
Tracking and analysis of the costs related to a project, such as large construction projects; planning budgets; forecasting the expenses; verifying invoices
Review of company accounts; verifying the validity of financial reports; monitoring the operations of the internal audit system; preparing reports and other financial statements; ensuring the reliability of information systems
Working with clients in their financial plans; offering advice regarding investments, taxes, insurance
Playing an important role in handling the company’s financial transactions; maintaining the budget; handling tax-related duties; collecting and paying bills
Head of accounting; supervising the preparation of financial reports; conducting compliance audits; analysing financial data; budgeting process; monitoring internal controls
Some of the top companies, businesses and organisations which recruit Cost Accountancy aspirants include:
Boston Consulting Group
Bain & Company
Zexus Air Services Pvt Ltd
ALTRET Industries Pvt Ltd
Inext Infotech Services
Micro Inks Limited
The average salaries for candidates who aspire to build a career in Cost Accountancy; with variations based on seniority, experience, and job profile are:
AVERAGE ANNUAL SALARY
Rs. 7 – 16 lakhs p.a. (Approx.)
Rs. 6 lakhs p.a. (Approx.)
Rs. 5 lakhs p.a. (Approx.)
Rs. 7 lakhs p.a. (Approx.)
Rs. 6 - 14 lakhs p.a. (Approx.)
Required Skillset for Cost Accountancy
The responsibilities of a Cost Accountancy professional require them to target costing projects and perform margin analyses and complete the analysis of gross margin of process constraints.
To execute the duties efficiently, a Cost accountancy professional must possess certain skills, some of which are:
Flexibility: Cost accountancy students must be adaptive and flexible towards changes so that they have the right approach to tackle challenges. The costing system should have the flexibility to accommodate changing circumstances and conditions of the industry, the lack of which will result in the system becoming outdated. Therefore, flexibility is an important trait in these professionals to allow expansion and contraction, as and when required, in the system.
Organisation Skills: Needless to say, any accountant must be highly organised in his/her work. When presenting figures, these professionals should have the necessary documents handy with accuracy in the details to avoid any disagreements. Cost accountants regularly deal with tons of paperwork, data and numbers; all of which can become mind-boggling and difficult to manage without the appropriate organisation skills.
Simplicity: Maintaining a costing system with as much simplicity as possible ensures effective management as well as enhanced ease of understanding even by those who are not well-versed with accounting terminology.
Teamwork and Collaboration skills: A great deal of teamwork is involved in accomplishing tasks as a cost accountant. Therefore, these accountants should be comfortable with meeting clients, coordinating tasks among team members and carrying out work in collaboration with others. In addition to teamwork, cost accountants are also required to provide support to other departments, which also requires good collaboration skills.
Communication Skills: Cost Accountancy professionals must make presentations to their team, prepare detailed reports, communicate via phone calls and emails, all of which require excellent communication skills on the part of these professionals.
Trustworthiness: When it comes to maintaining client confidentiality and protecting data, cost accountancy professionals must be trustworthy and build a good reputation in this context. With credibility and trustworthiness, cost accountants can build good customer relations and attract more clients.
Accountability: While cost accountants must take every necessary step to avoid mistakes when errors do inevitably occur, they should accept responsibility for the same and learn from the mistakes which caused the error. Such accountability is highly sought after in cost accountants by recruiting companies.
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Course Curriculum for Cost Accountancy
The CMA course is structured to provide students with an in-depth understanding of business management with the resources at hand. Cost Accountancy professionals are required to collect and analyse financial reports and information from various departments in the company. The course is taught in three stages- CMA Foundation, CMA Intermediate and CMA Final. Students must pass the qualifying examination of each exam before pursuing the next.
Upon completing all three stages, students can:
Determine the selling price,
Provide the basis for policies on an operation,
Facilitate the preparation of financial statements,
Ascertain profitability and cost
Facilitate cost control.
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Frequently Asked Questions (FAQs)
Question: Is a B.Com degree mandatory for graduation alongside CMA?
No, candidates don’t need to pursue a B.Com degree. The CMA Intermediate course prerequisites require that the candidate completes graduation in any stream. However, when it comes to employment, many companies look for a B.Com degree as well. So, pursuing B.Com alongside CMA is not mandatory, but recommended.
Question: Can you register for CMA Intermediate level before completing graduation?
Yes, candidates may register for the CMA Intermediate level before completing their graduation, but until they clear their qualifying examination, they will only be offered provisional admission. Only upon clearing the graduation exam will candidates be allowed to sit for the CMA Intermediate exam.
Question: Can you register for CMA Foundation before completing Class 12?
Yes, students are allowed to register for the Foundation course before appearing for their Class 12 examination. However, they may not sit for the CMA Foundation exam until the Class 12 examination has been cleared. Until the requirements have been met, candidates are offered provisional admission.
Question: How long does it take to complete the CMA course?
The CMA course contains a total of 20 papers, spread out over three stages. The duration to complete all these stages can vary from candidate to candidate based on their capacity. Typically, students take approximately 3 to 4 years to complete the course.
Question: What is the difference between Chartered Accountancy and Cost Accountancy?
While the line between the two professions can be slightly fluid, there is a difference between Chartered Accountancy and Cost Accountancy.
The former focuses more on financial accounts, preparation of balance sheets, treasury, payables and receivables, funding, taxation, tax audits, direct taxes, and compliance.
On the other hand, Cost Accountancy is focused on pricing decisions, variance analysis, inventory, product costing, budgets, MIS, and ERP.