CMA & the Companies Act 2013
Dr. S K Gupta
M.Com, FCMA, FCS, Ph.D
The Companies Act 2013 Act is a landmark
piece of corporate legislation with
farreaching implications that are set to
significantly change the manner in which
corporates operate in India
environment more transparent, robust and
globally acceptable
The Significant objectives of the Companies
Act are :
To accelerate the development of economy by encouraging
enterprise efficiency
To bring accountability and transparency in all operations
To enhance standards of Corporate Governance
To protect the interest of all stakeholders
To ensure stricter action against fraud, non-compliance
The new Companies Act 2013 has brought a
paradigm shift in Corporate Law legislation and
widened the ambit and scope of the profession and
also expanded the opportunities for the Cost
The role of CMAs is now not confined within the
four walls of cost accounting and cost audit but
spread across a wider area of governance, legal and
The new Companies Act has substantially escalated
the role, responsibilities and opportunities for the
CMA Included in the definition of expert Section 2(38)
“expert” includes an engineer, a valuer,
a chartered accountant, a company
secretary, a cost accountant and any
other person who has the power or
authority to issue a certificate in
pursuance of any law for the time being
in force;
CMA Authorized to sign Form 18 of RoC
Section 7
There shall be filed with the Registrar a declaration in the
prescribed form by an advocate, a chartered accountant, cost
accountant or company secretary, in practice, that all the
requirements of this Act and the rules made there under in
respect of registration and matters precedent or incidental
thereto have been complied with;
CMA Could be appointed as Internal
Auditor Section 138(1)
The new Act provides statutory recognition to CMAs to carry out
Internal Audit
…..Such class or classes of companies as may be prescribed shall
be required to appoint an internal auditor, who shall either be a
chartered accountant or a cost accountant, or such other
professional as may be decided by the Board to conduct internal
audit of the functions and activities of the company.
 Internal
Audit is an independent, objective assurance and
consulting activity designed to add value to a company
 It helps an entity to accomplish its objectives by bringing a
systematic and disciplined approach to evaluate and improve
the effectiveness of internal controls and governance
 CMAs
have a key role to play in Internal Audit domain as
they possess expertise in efficiency and process evaluation
CMA - Duty to report fraud
Cost Accountant conducting Cost Audit if while
performing his duties has reason to believe that
an offence involving fraud is being / has been
committed against company by its officers /
employees, he shall immediately report it to
Central Government.
Welcoming and worth-noting point is that Law has widened the ambit of
maintenance of cost records and Cost Audit to include companies engaged
in providing services.. 148(1)
Cost Accounting Records and Cost Audit
the Central Government may, by order, in respect of such class of
companies engaged in the production of such goods or providing such
services as may be prescribed, direct that particulars relating to the
utilization of material or labor or to other items of cost as may be
prescribed shall also be included in the books of account kept by that
class of companies.
Scope and coverage as per Rules
CMA Can certify the statement to be filed with the
Registrar in case of Compromise or Arrangement under
Reconstruction or Merger or Amalgamation.
Section 232(7)
Every company in relation to which an order is made by NCLT shall, until
the completion of the scheme, file a statement in such form and within such
time as may be prescribed with the Registrar every year duly certified by a
chartered accountant or a cost accountant or a company secretary in
practice indicating whether the scheme is being complied with in accordance
with the orders of the Tribunal or not.
This provision casts an onerous responsibility on CMAs in certifying
compliance of the Tribunal’s order
CMA Can be appointed as Interim Administrator or the
Company Administrator in case of proceedings for Sick
Company. Section 259(1)
The interim administrator or the company administrator, as the
case may be, shall be appointed by the Tribunal from a databank
maintained by the Central Government or any institute or agency
authorized by the Central Government in a manner as may be
prescribed consisting of the names of company secretaries, chartered
accountants, cost accountants and such other professionals as
may, by notification, be specified by the Central Government.
Powers and Duties
Take a complete inventory of assets and liabilities
All books of accounts and other documents
List of shareholders and creditors
Proforma accounts where up-to-date audited accounts are not
List of workmen of the company and their dues
Prepare a scheme of revival and rehabilitation
Obtain approval of creditors to the scheme
Place the scheme before the shareholders for approval by way
of a special resolution
CMA Can be appointed as an Official Liquidator
. Section 275(2) in case of winding up
the Official Liquidator shall be appointed from a panel maintained by the
Central Government consisting of the names of chartered accountants,
advocates, company secretaries, cost accountants or firms or bodies
corporate having such chartered accountants, advocates, company secretaries,
cost accountants having at least ten years’ experience in company matters.
The objective is to accelerate the liquidation process and ensure compliance
of all statutory provisions relating to liquidation process
Scope of powers and Duties
Official liquidator shall be convener of the meetings of winding
up committee which shall assist and monitor the liquidation
OL shall take over assets, examine the statement of affairs,
finalize list of creditors, sale of assets, compromise and
settlement of claims
OL shall prepare a draft report for consideration and approval
of the winding up committee
The final report approved by the winding up committee shall
be submitted by the OL to the Tribunal for passing of a
dissolution order
Official Liquidator may appoint CMA’s to assist
him. Section 291(1)
The Company Liquidator may, with the sanction of the Tribunal,
appoint one or more chartered accountants or company
secretaries or cost accountants or legal practitioners or such
other professionals on such terms and conditions, as may be
necessary, to assist him in the performance of his duties and
functions under this Act
Representative of a person in case of winding up
proceedings. Section 300(4)
A person ordered to be examined under this section—
may at his own cost employ chartered accountants or company
secretaries or cost accountants or legal practitioners entitled to
appear before the Tribunal under section 432, who shall be at liberty
to put to him such questions as the Tribunal may consider just for the
purpose of enabling him to explain or qualify any answers given by
CMA can be appointed as Technical Member of
National Company Law Tribunal. Section
A Cost Accountant in practice is eligible for
appointment as a Technical Member if he is in practice
as a cost accountant for at least fifteen years
CMA can Appear before the Tribunal
Section 432
A party to any proceeding or appeal before the Tribunal or
the Appellate Tribunal, as the case may be, may either
appear in person or authorize one or more chartered
accountants or company secretaries or cost accountants
or legal practitioners or any other person to present his case
before the Tribunal or the Appellate Tribunal, as the case
may be.
Risk Management under the Companies Act 2013 and the
potential role of CMA
Section 134 : The Board of Directors Report must include a
statement indicating development and implementation of a risk
management policy for the company including identification of
elements of risk, if any, which in the opinion of the board may
threaten the existence of the company
Section 177 : The Audit Committee shall evaluate risk
management systems
Schedule IV : Independent Directors should satisfy
themselves that systems of risk management are robust and
A CMA has an opportunity to get actively involved in the
process of Risk Management
Understand what is risk and its different
Assess the probability of an event happening which may
de-tour the company plans
Assess the probable impact of that event , if that
Develop strategy to cope up with risk
Align risk management with business objectives
Very few companies have a Chief Risk Officer
even there CMA may provide expert assistance in the
entire process of risk management so as to ensure that
the company has a comprehensive Risk Management
system in place
CMA needs to up- grade knowledge in Risk
Management processes
Corporate Social Responsibility
CMA can play a key role in complying with Section 135 of
the Companies Act , 2013
CSR needs a rational approach
CSR policy
CSR Committee
Need assessment / Base line survey
Identification of CSR projects
Corporate Social Responsibility…
Identification and agreement with implementing
Planning and monitoring of CSR projects
Post CSR project completion assessment / Social Audit
CMAs have an opportunity to get actively involved in
CSR initiatives of the company.
CMAs possess Project management skills to manage
CSR projects efficiently and effectively
CMA as Independent Director
Section 150 Provides that every listed public
company shall have at least one third of total
number of directors as independent directors
CMAs can contribute significantly in improving
corporate governance processes in companies
wherein they are appointed as the Independent
CMA as Key Managerial Personnel
2 - Managing Director or Chief
Executive Officer or manager and in their
absence, a whole time director Company
Secretary and Chief Financial Officer.
 By
virtue of qualification and experience a
CMA may become a Key Managerial Person
in the company by holding the designated
CMA authorized for pre certification of
various e – forms prescribed under the
Companies Act
CMAs .. Awake.. Arise..
The members of the institute need to gear up and leverage
their professional edge to seize the opportunities in the
new areas opened up by the Companies Act : CMAs need
 Up dation of knowledge
 Practical and pragmatic approach
 Proactive and analytical mindset
Challenge and opportunity to serve the nation in a much
greater way in the broader interest of all the stakeholders
and the public
Thank You
You may reach me at
[email protected]
Mobile : 9810162341

similar documents