CMAs need to change from ‘Cost Accountants’ to ‘Value Accountants’: ICMAI Pres Biswarup Basu

From India Times: The role of CMAs in the changing world requires the need to re-skill the CMAs in high-end tools such as Activity Based Costing, Process-Based Costing, or target costing etc. There is a need to change the agile mindset – promote diversity in thinking and imbibe multi-disciplinary skills, he said.

Biswarup Basu, President at the Institute of Cost Accountants of India, in the interview below, discussed the role of cost and management accountants (CMAs) in pandemic. There is a need for CMAs to imbibe multidisciplinary skills and strive to become value accountants, he strongly urged. Below are edited excerpts:

Q: What should the role of CMAs look like in today’s changing world?

In today’s changing world, CMAs need to change from ‘Cost Accountants’ to ‘Value Accountants’; ‘Cost Insight’ to ‘Operational Excellence’; and ‘Performance Insight’ to an ‘Architect of Future Value’. This would require moving from ‘Tangible Skills’ to ‘Intangible Skills’.

Apart from learning digital skills, CMAs must further sharpen their technical skills, business skills, people skills, & leadership skills.

The role of CMAs in the changing world requires the need to re-skill the CMAs in high-end tools such as Activity Based Costing, Process-Based Costing, or target costing etc. There is a need to change the agile mindset – promote diversity in thinking and imbibe multi-disciplinary skills.

Q: What is the top challenge facing cost accountants today?

Today the biggest challenge & threat is Covid-19. During the last few years, business models across industries are witnessing significant changes. With the outcome of e-commerce, marketing strategies have substantially changed.

Above all, the Covid-19 pandemic caused unprecedented threats to the sustainability of majority business entities across the value chain & across national/international boundaries. With all these developments, the cost management structure, and practice has also changed. Consequently, the cost accounting system followed by the companies and its efficacy on reporting the resource utilisation and efficiency parameters to the Board and Regulators requires a re-look. CMAs are required to stand-up to find effective solutions to these problems & challenges.

CMAs need to guide the governments, industry associations, sectoral bodies and business chambers, including MSME clusters on how to address the Covid-19 & lockdown-related issues, how to restart the business, or how to resolve liquidity problems, among others.

Q: What steps have the Institute taken to help the CMAs grow as well as businesses survive during pandemic?

In the Covid-19 pandemic period, the Institute developed two very important & most demanding documents that would certainly help in proper Board-level monitoring & evaluation and in preparing right Business Continuity Plans post lockdowns. These are, “Conceptual Approach to Board Reporting Framework – A Post Covid-19 Corporate Governance Perspective” and “Post Covid-19 & Lockdown – Technical Guide on Business Continuity Plan“.

We have also recently developed an Activity based Performance Costing System that would assist the organizations to correctly & timely measure and assess the performance of different activities or operations.

This system will also help Indian Businesses to arrive at appropriate product mix and pricing decisions; to identify profitable, loss-making and non-value-added products/activities; and to control and improve the business planning, budgeting, resource allocation, resource utilization, and investment decisions.

Q: What message do you have for CMAs across the country?

Today, the CMAs must solely focus on the PM’s vision of Atmanirbhar Bharat. They are propelled to play a more effective role in supporting the government’s initiatives with an aim to help India to become cost competitive, and capture the export market. That would catalyze wider employment generation and GDP growth, which is much needed to achieve the PM’s goal of a $5 trillion economy by 2025.

CMAs must churn the best practices successfully adopted in different industries/business entities. Deliberations on disruptive ideas and blue ocean business strategies coupled with IT driven tools, artificial intelligence & analytical skills lay a road map to gear-up the economic revival cycle in a high trajectory mode much needed to once again make India a place of pride.

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