Financial Daily from THE HINDU group of publications
Thursday, Aug 22, 2002
Financial Daily from THE HINDU group of publications Thursday, Aug 22, 2002 |
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Opinion
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Letters Cost audits
The editorial on cost audits and the reply of the ICWAI President are indeed thought provoking. At this juncture, it is very important to retain the efforts of bodies such as the CII to promote cost management while considering any change to the cost audit legislation. It may be considered that even best practices on quality management or preventive maintenance could seep into Indian industry only through an indirect mandatory force of certifying bodies such as ISO, QS 9000, etc. Even Capability Maturity Model levels are certified after verification by certifying agencies. The urge for adopting these practices is intense in the corporate sector. In a similar mould, the mandatory force for infusing cost management practices can stem from a legal provision under company legislation as we do not have agencies other than the CII that promotes them in a structured way. A provision for certifying the level of maturity on cost management practices under law would have an expediting effect on the adoption of world class cost management practices. The better strategy would be to convert the present cost audit provisions into one that supports Total Cost Management practices instead of a certification of the cost structure which may not be acceptable in today's context of competition. A. N. Raman
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