Chartered Accountants lost case against Cost Accountants

The change in the Act was necessitated when the 97th Constitutional amendment came into force in 2011. The states were required to make new laws mandating that all cooperative societies maintain accounts and get them audited. Karnataka amended its cooperative societies law to conform with the Constitution.

The chartered accountants challenged this amendment in the HC. They alleged that the government succumbed to the "pressure of lobbying and political pressure," by the cost accountants' fraternity and when the law was amended, the definition of 'auditor' was enlarged to include cost accountants. Otherwise, only chartered accountants or a CA firm could audit accounts. They claimed that there was a vast difference between the two professions and even in the syllabus studied by these two.

The government, however, defended including cost accountants in the amendment arguing that the cooperative sector in Karnataka included sugar factories, spinning mills and industrial societies which required costing work to be done by cost accountants. The syllabus studied by the two professions were very similar and there was a shortage of professionals, requiring it to bring cost accountant firms under the meaning of 'auditor and auditing firms'.

The HC dismissed the petition of the chartered accountants saying that the amendment was made by law and the court could not interfere in it. It also pointed out that chartered accountants were not making a case that auditing of accounts of a cooperative society was their exclusive domain. Thus cost accountants are now on par with chartered accountants at least as far as auditing accounts of cooperative societies in Karnataka goes. #casansaar