The row over the Cost Audit Rules introduced under the Companies Act has reached a flash point as the entire central council of the Institute of Cost Accountants of India (ICAI) submitted its resignation to Finance Minister Arun Jaitley, who also has the charge of the corporate affairs ministry.

The cost-audit mechanism-which is designed to establish the link between cost of inputs such as raw materials, labour and power and price of a product - can effectively counter profiteering and crony capitalism, according to the practicing professionals.

But the new Companies Act curtailed the profession's scope, by removing a number of industries from its purview and raising the net-worth threshold for a company to be audited for cost to Rs 500 crore from Rs 5 crore. The institute had claimed that the Ministry of Corporate Affairs (MCA) had kept it away from consultation while formulating the rules. It is now hoping for a respite as the finance minister, busy with theUnion budget exercise currently, assured to meet its representatives over the next weekend."

We were able to meet the Hon-'ble Minister briefly... He has asked his office to arrange a meeting with MCA officials and institute members by next weekend," said Suresh Chandra Mohanty, president of ICMAI. The council's members submitted their resignations on Wednesday.

Although MCA officials say a consultative mechanism of stakeholders was constituted and feedback of stakeholders was considered for framing these rules, the institute maintains it was never informed. "These rules were imposed upon us without consulting. No rules committee was officially notified, and our representations were ignored," said Mohanty. MCA officials didn't respond to emails seeking comment.The institute has been demanding to put the Companies (Cost Records and Audit) Rules 2014 in abeyance until the issues are resolved and allow the Cost Rules introduced in 2011 and 2012 to continue, but to no avail.

The cost institute hasn't been able to generate support from fellow professional institutions. A central council member of the Institute of Chartered Accountants of India, S Santhanakrishnan, said: "The Companies Act 2013 cannot be an employment guarantee scheme. Cost accounting profession can easily establish its relevance by their intrinsic worth."

He further added: "Why can't we focus on cost accounting rather than cost audit. The industry is keen to know the cost details but is not comfortable sharing the same with the public. For example, cost audit of an outsourcing business will only disclose all the cost incurred and will reduce business opportunity for the firm and therefore, for the country." V Murali, another central council member of Institute of Chartered Accountants, said the mass resignation would only weaken the bargaining power of the Institute of Cost Accountants of India.

FICCI believes the new cost rules are progressive. Hence it is disappointing that, while not wishing to align with contemporary realities, detractors in the profession are quick to allege unknown "influencers" in an effort to create ambiguity and suspicion. One reasonably expects mature voices in the profession to come forward and decry misinformation and pressure, to avoid creating a negative atmosphere.