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COST AND WORKS ACCOUNTANTS ACT, 1959
23 of 1959
An Act to make provision for the regulation of the profession of cost and works accountants. BE it enacted by Parliament in the Tenth Year of the Republic of India as follows:-
CHAPTER 01: PRELIMINARY
SECTION 01: SHORT TITLE, EXTENT AND COMMENCEMENT
(1) This Act may be called the Cost and Works Accountants Act, 1959.-
(2) It extends to the whole of India.
(3) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.
SECTION 02: DEFINITIONS AND INTERPRETATION
(1) In this Act, unless the context otherwise requires,-
(a) "associate" means an associate member of the Institute;
(b) "cost accountant" means a person who is a member of the Institute;
(c) "Council" means the Council of the Institute;
(d) "dissolved company" means the Institute of Cost and Works Accountants registered under the Companies Act, 1956 (1 of 1956)-;
(e) "fellow" means a fellow of the Institute;
(f) "Institute" means .the Institute of Cost and Works Accountants of India constituted under this Act;
(g) "prescribed" means prescribed, by regulations made under this Act;
(h) "President" means the President of the Council;
(i) "Register" means the Register of members maintained under this Act;
(j) "Vice-President" means the Vice-President of the Council;
(k) "year" means the period commencing on the 1st day of April of any year and ending on the 31st day of March of the succeeding year.
(2) Save as otherwise provided in this Act, a member of the Institute shall be deemed "to be in practice" when, individually or in partnership with one or more members of the Institute in practice, he, in consideration of remuneration received or to be received,-
(i) engages himself in the practice of cost and works accountancy; or
(ii) offers to perform or performs services involving the costing or pricing of goods or services or the preparation, verification or certification of cost accounting and related statements or holds himself out to the public as a cost accountant in practice; or
( iii) renders professional services or assistance in or about matters of principle or detail relating to cost accounting procedure or the recording, presentation or certification of costing facts or data; or
(iv) renders such other services as, in the opinion of the Council, are or may be rendered by a cost accountant in practice; and the words "to be in practice", with their grammatical variations and cognate expressions, shall be construed accordingly.
CHAPTER 02: THE INSTITUTE OF COST AND WORKS ACCOUNTANTS
SECTION 03: INCORPORATION OF THE INSTITUTE
(1) All persons whose names are entered in the Register at the commencement of this Act and all persons who may hereafter have their names entered in the Register under the provisions of this Act, so long as they continue to have their names borne on the said Register, are hereby constituted a body corporate by the name of the Institute of Cost and Works Accountants of India, and all such persons shall be known as members of the Institute.
(2) The Institute shall have perpetual succession and a common seal, and shall have power to acquire, hold and dispose of property, both movable and immovable, and shall by its name sue or be sued
SECTION 04: ENTRY OF NAMES IN THE REGISTER
(1) Any of the following persons shall be entitled to have his name entered in the Register, namely:-
(i) any person who was an associate or a fellow of the dissolved company (other than an honorary associate or honorary fellow thereof) immediately before the commencement of this Act, except any such person who is not a permanent resident of India and is not at such commencement practising as a cost accountant in India;
(ii) any person who has passed such examination and completed such training as may be prescribed for members of the Institute;
(iii) any person who, at the commencement of this Act, is engaged in the practice of cost accountancy in India and who fulfils such conditions as the Central Government or the Council may specify in this behalf;
(iv) any person who has passed such other examination and completed such other training without India as is recognised by the Central Government or the Council as being equivalent to the examination and training prescribed for members of the Institute: Provided that in the case of any person who is not permanently residing in India, the Central Government or the Council may impose such further conditions as it may deem fit;
(v) any person domiciled in India, who at the commencement of this Act is studying for any foreign examination and is at the same time undergoing training, whether within or without India, or, who, having passed such examination, is at such commencement undergoing training whether within or without India :
Provided that such foreign examination and training are recognised by the Central Government or the Council in this behalf: Provided further that the person passes the examination and completes his training within five years from the commencement of this Act.
(2) Every person belonging to the class mentioned in clause (i) of sub-section (1) shall have his name entered in the Register without the payment of any entrance fee.
(3) Every person belonging to any of the classes mentioned in clauses (ii), (iii), (iv) and (v) of subsection
(1) shall have his name entered in the Register on application being made and granted in the prescribed manner and on payment of the prescribed entrance fee, which shall not exceed rupees three hundred in any case.
(4) The Central Government shall take such steps as may be necessary for the purpose of having the names of all persons belonging to the class mentioned in clause ( i) of sub-section ( 1 ) entered in the Register at the commencement of this Act.
SECTION 05: FELLOWS AND ASSOCIATES
(1) The members of the Institute shall be divided into two classes designated respectively as associates and fellows.
(2) Any person other than a person to whom the provisions of sub-section (3) apply shall, on his name being entered in the Register, be deemed to have become an associate member of the Institute and so long as his name remains so entered, shall be entitled to use the letters AICWA after his name to indicate that he is an associate member of the Institute of Cost and Works Accountants.
(3) Any person who was a fellow of the dissolved company and who is entitled to have his name entered in the Register under clause (i) of sub-section (1) of section 4-, shall be entered in the Register as a fellow of the Institute.
(4) A member, being an associate who has been in continuous practice in India for at least five years, whether before or after the commencement of this Act, or whether partly before and partly after the commencement of this Act, and a member who has been an associate for a continuous period of not less than five years and who possesses such qualifications as the Council may prescribe with a view to ensuring that he has experience equivalent to the experience normally acquired as a result of continuous practice for a period of five years as a cost accountant shall, on payment of the prescribed entrance fee, which shall not exceed rupees two hundred in any case, and on application made and granted in the prescribed manner, be entered in the Register as a fellow of the institute.
(5) Any person whose name is entered in the Register as a fellow of the Institute and so long as his name remains so entered, shall be entitled to use the letters FICWA after his name to indicate that he is a fellow of the Institute of Cost and Works Accountants.
SECTION 06: CERTIFICATE OF PRACTICE
(1) No member of the Institute shall be entitle to practise, whether in India or elsewhere, unless he has obtained from the Council a certificate of practice.
(2) Every such member shall make application in such form and pay such annual fee, for his certificate as may be prescribed, and such fee shall be payable on or before the 1st day of April in each year : Provided that if a member of the Institute who was in practice immediately before the commencement of this Act has made within one month of such commencement an application for the grant of certificate of practice, he shall not be deemed to have contravened the provisions of sub-section (1) by reason of his having practised during the period between such commencement and the disposal of the application.
SECTION 07: MEMBERS TO BE KNOWN AS COST ACCOUNTANTS
Every member of the Institute in practice shall, and any other member may, use the designation of a cost accountant and no member using such designation shall use any other description, whether in addition thereto or in substitution therefore: Provided that nothing in this section shall be deemed to prohibit any such member from adding any other description or letters to his name, if entitled thereto, to indicate membership of such other Institute of accountancy, whether in India or elsewhere, as may be recognised in this behalf by the Council, or any other qualification that he may possess, or to prohibit a firm, all the partners of which are members of the Institute and in practice, from being known by its firm name as cost accountants.
SECTION 08: DISABILITIES
Notwithstanding anything contained in section 4-, a person shall not be entitled to have his name entered in, or borne on, the Register if he -
(i) has not attained the age of twenty-one years at the time of his application for the entry of his name in the Register; or
(ii) is of unsound mind and stands so adjudged by a competent court; or
(iii) is an undischarged insolvent; or
(iv) being a discharged insolvent, has not obtained from the court a certificate staling that his insolvency was caused by misfortune without any misconduct on his part; or
(v) has been convicted by a competent court whether within or without India, of an offence involving moral turpitude and punishable with imprisonment or of an offence, not of a technical nature, committed by him in his professional capacity unless in respect of the offence committed he has either been granted a pardon or, on an application made by him in this behalf, the Central Government has, by an order in writing removed the disability; or
(vi) has been removed from membership of the Institute on being found on inquiry to have been guilty of professional or other misconduct: Provided that a person, who has been removed from membership for a specified period, shall not be entitled to have his name entered in the Register until the expiry of such period.
CHAPTER 03: COUNCIL OF THE INSTITUTE
SECTION 09: CONSTITUTION OF THE COUNCIL OF INSTITUTE
(1) There shall be a Council of the Institute for the management of the affairs of the Institute and for discharging the functions assigned to it by or under this Act.
(2) The Council shall be composed of- (a) not more than twelve persons elected by members of the Institute from amongst the fellows of the Institute chosen in such manner and from such regional constituencies as may be specified in this behalf by the Central Government by notification in the Official Gazette; and (b) not more than four persons nominated by the Central Government.
SECTION 10: MODE OF ELECTION TO COUNCIL
(1) Elections under clause (a) of sub-section (2) of section 9-shall be conducted in the prescribed manner: Provided that the first election under the said clause shall be held in such manner as the Central Government may specify in this behalf.
(2) Where any dispute arises regarding any such election, the matter shall be referred by the Council to a Tribunal appointed by the Central Government in this behalf and the decision of such Tribunal shall be final: Provided that no such reference shall be made except on an application made to the Council by an aggrieved party within thirty days from the date of the declaration of the result of the election.
(3) The expenses of the Tribunal shall be borne by the Council.
SECTION 11: NOMINATION IN DEFAULT OF ELECTION
If the members of the Institute fail to elect any member under clause (a) of sub-section (2) of section 9- from any of the regional constituencies that may be specified under that clause, the Central Government may nominate any duly qualified person from such constituency to fill the vacancy, and any person so nominated shall be deemed to be a duly elected member of the Council.
SECTION 12: PRESIDENT AND VICE --PRESIDENT
(1) The Council at its first meeting shall elect two of its members to be respectively the President and the Vice-President thereof, and so often as the office of the President or the Vice-President becomes vacant, the Council shall choose a person to be the President or the Vice-President, as the case may be: Provided that on the first constitution of the Council a member of the Council nominated in this behalf by the Central Government shall discharge the functions of the President, until such time as a President is elected under the provisions of this sub-section.
(2) The President shall be the Chief Executive Authority of the Council.
(3) The President or the Vice-President shall hold office for a period of one year from the date on which he is chosen but so as not to extend beyond his term of office as a member of the Council, and, subject to his being a member of the Council at the relevant time, he shall be eligible for re-election
: Provided that the President of the Council at the time of the expiration of its duration shall continue to hold office until a new Council is constituted in accordance with the provisions of this Act.
SECTION 13: RESIGNATION OF MEMBERSHIP AND CASUAL VACANCIES
(1) Any member of the Council may at any time resign his membership by writing under his hand addressed to the President, and the seat of such member shall become vacant when such resignation is notified in the Official Gazette.
(2) A member of the Council shall be deemed to have vacated his seat if he is declared by the Council to have been absent without sufficient excuse from three consecutive meetings of the Council, or if his name is, for any cause, removed from the Register under the provisions of section 20-.
(3) A casual vacancy in the Council shall be filled by fresh election from the constituency concerned or by nomination by the Central Government, as the case maybe, and the person elected or nominated to fill the vacancy shall hold office until the dissolution of the Council:
Provided that no election shall be held to fill a casual vacancy occurring within six months prior to the date of the expiration of the duration of the Council, but such a vacancy may be filled by nomination by the Central Government after consultation with the President of the Council.
(4) No act done by the Council shall be called in question on the ground merely of the existence of any vacancy in, or defect in the constitution of, the Council.
SECTION 14: DURATION AND DISSOLUTION OF COUNCIL
(1) The duration of any Council constituted under this Act shall be three years from the date of its first meeting.
(2) Notwithstanding the expiration of the duration of a Council (hereinafter referred to as the former Council), the former Council shall continue to exercise its functions under this Act until a new Council is constituted in accordance with the provisions of this Act, and on such constitution, the former Council shall stand dissolved.
SECTION 15: FUNCTIONS OF THE COUNCIL
(1) The duty of carrying out the provisions of this Act shall be vested in the Council.
(2) In particular, and without prejudice to the generality of the foregoing power, the duties of the Council shall include-
(a) the examination of candidates for enrolment and the prescribing of fees therefore;
(b) the registration and training of students;
(c) the prescribing of qualifications for entry in the Register;
(d) the recognition of foreign qualifications and training for purposes of enrolment;
(e) the granting or refusal of certificates of practice under this Act;
(f) the maintenance and publication of a Register of persons qualified to practise as cost accountants;
(g) the levy and collection of fees from members, examinees and other persons;
(h) the removal of names from the Register and restoration to the Register of names which have been removed;
(i) the regulation and maintenance of the status and standard of professional qualifications of members of the Institute;
(j) the carrying out, by financial assistance to persons other than members of the Council or in any other manner, of research in accountancy;
(k) the maintenance of libraries and publication of books and periodicals relating to cost accountancy and allied subjects; and
(l) the exercise of disciplinary powers conferred by this Act.
SECTION 16: STAFF REMUNERATION AND ALLOWANCES
(1) For the efficient performance of its duties, the Council may -
(a) appoint a Secretary who may also, if so decided by the Council, act as Treasurer;
(b) appoint such other persons on its staff as it deems necessary;
(c) require and take from the Secretary or from any other employee of the Council such security for the due performance of his duties as the Council considers necessary;
(d) fix the salaries, fees, allowances and other conditions of service of the Secretary and other employees of the Council;
(e) with the previous sanction of the Central Government fix the allowances of the President, Vice'-President and other members of the Council and its Committees.
(2) The Secretary of the Council shall be entitled to participate in the meetings of the Council and the Committees thereof but shall not be entitled to vote thereat.
SECTION 17: COMMITTEES OF THE COUNCIL
(1) The Council shall constitute from amongst its members the following Standing Committees, namely :- (i) an Executive Committee; (ii) a Disciplinary Committee; and (iii) an Examination Committee.
(2) The Council may also form Training and Educational Facilities Committee and such other Committees from amongst its members as it deems necessary for the purpose of carrying out the provisions of this Act.
(3) The Executive Committee shall consist of the President, and the Vice-President, ex officio, and three other members of the Council elected by the Council.
(4) The disciplinary Committee shall consist of the President, ex officio, one member to be nominated by the Central Government from amongst the members nominated to the Council by that Government and one member to be elected by the Council.
(5) The Examination Committee shall consist of the President or the Vice-President, ex officio, as the Council may decide, and two other members of the Council elected by the Council.
(6) Notwithstanding anything contained in this section, any Committee formed under sub-section (2), may, with the sanction of the Council, co-opt such other members of the Institute not exceeding two-thirds of the total membership of the Committee as the Committee thinks fit, and any member so co-opted shall be entitled to exercise all the rights of a member of the Committee.
(7) The President shall be the Chairman of every Committee of which he is a member, and in his absence, the Vice-President, if he is a member of the Committee, shall be the Chairman.
(8) The Standing Committees and other Committees formed under this section shall exercise such functions and be subject to such conditions in the exercise thereof as may be prescribed.
SECTION 18: FINANCES OF THE COUNCIL
(1) There shall be established a fund under the management and control of the Council into which shall be paid all moneys received by the Council and out of which shall be met all expenses and liabilities properly incurred by the Council.
(2) The Council may invest any money for the time being standing to the credit of the fund in any Government security or in any other security approved by the Central Government.
(3) The Council shall keep proper accounts of the funds distinguishing capital from revenue.
(4) The annual accounts of the Council shall be subject to audit by a chartered accountant in practice within the meaning of the Chartered Accountants Act, 1949 (38 of 1949)-, to be appointed annually by the Council: Provided that no member of the Council who is a chartered accountant or a person who is in partnership with such member shall be eligible for appointment as an auditor under this sub-section.
(5) As soon as may be practicable at the end of each year, but not later than the 30th day of September of the year next following, the Council shall cause to be published in the Gazette of India a copy of the audited accounts and the Report of the Council for that year and copies of the said accounts and Report shall be forwarded to the Central Government and to all the members of the Institute.
(6) The Council may borrow from a scheduled bank as defined in the Reserve Bank of India Act, 1934 (2 of 1934)-, or from the Central Government-
(a) any money required for meeting its liabilities on capital account on the security of the fund or on the security of any other assets for the time being belonging to it; or
(b) for the purpose of meeting current liabilities pending the receipt of income by way of temporary loan or over-draft.
CHAPTER 04: REGISTER OF MEMBERS
SECTION 19: REGISTER
(1) The Council shall maintain in the prescribed manner a Register of the members of the Institute.
(2) The Register shall include the following particulars about every member of the Institute, namely:-
(a) his full name, date of birth, domicile, residential and professional addresses;
(b) the date on which his name is entered in the Register;
(c) his qualifications;
(d) whether he holds a certificate of practice; and
(e) any other particulars which may be prescribed.
(3) The Council shall cause to be published in such manner as may be prescribed a list of members of the Institute as on the 1st day of April of each year, and shall, if requested to do so by any such member, send him a copy of such list.
(4) Every member of the Institute shall, on his name being entered in the Register, pay such annual membership fee differing in amount according as he is an associate or a fellow as may be prescribed.
SECTION 20: REMOVAL FROM THE REGISTER
(1) The Council may remove from the Register the name of any member of the Institute,-
(a) who is dead; or
(b) from whom a request has been received to that effect; or
(c) who has not paid any prescribed fee required to be paid by him; or
(d) who is found to have been subject at the time when his name was entered in the Register, or who at any time thereafter has become subject, to any of the disabilities mentioned in section 8-, or who for any other reason has ceased to be entitled to have his name borne on the Register.
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