Written by Ravi Sankar Robbi

Updated on:

Chartered accountants of Karnataka under the Karnataka State Chartered Accountants Association have lost their case against the Karnataka State Cost Accountants Association in the high court. The CAs had a grouse against the state government allowing cost accountants to audit the account books of cooperative societies in the state. They had thus challenged an amendment to the Karnataka Cooperative Societies Act made in 2014, which allowed parity between chartered accountants and 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.


A cost accountant is one who does the cost audits of a company. Basically, it refers to the calculation of cost per unit of output, and ways and methods to minimise expenditure and maximise output. This system is more useful in manufacturing industries. A cost accounting degree is given by the Institute of Cost and Works Accountancy (ICWA). A chartered accountant is one who does the financial or main audit of a company or enterprise. Basic works include making accounts, computation of taxes to be paid, filing of income tax returns, statutory audit, tax audit and internal audit among others. A chartered accountant degree is given by the Institute of Chartered Accountants of India (ICAI).

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Author is a Qualified CMA with an experience of more than 8 years in the industry. He is also an All India Rank holder in both Inter (AIR-26) & Final (AIR-46) examinations of ICAI. He loves to writes articles on Income Tax & GST.