Professional dominance: The relationship between financial accounting and managerial accounting, 1926-1986

Accounting Historians Journal, The, Dec 2002 by Richardson, Alan J

Management accounting was also "professionally" subordinate in the sense that the Institutes of Chartered Accountants had created the Society of Management Accountants of Canada and the survival of the society during its early years depended upon their support. The first council of the Society consisted of the Presidents of eight provincial Institutes of Chartered Accountants. The initial intent of the CAs was to create an organization to accommodate management accountants but that would not create a credential which would compete with the CA designation [Editorial, 1920a,b; Mann, 1975]. This situation contrasts with the formation of the National Association of Cost Accountants (NACA) in the US. The NACA formed as a separate organization by breaking away from the American Institute of Accountants.

This status was reinforced when the Society of Management Accountants recommended offering designations to its members in 1939 [Allan, 1982, pp. 29-30]. In order to qualify for the designation of Registered Industrial Accountant, candidates could meet one of three requirements. They could have ten years or more of cost accounting experience; hold a designation from another Canadian accounting body for five years; or, have five years experience as an industrial engineer. The willingness of the Society to certify members of other professions as cost accountants in part reflects an attempt to co-opt members of the other professions and thereby gain jurisdiction over the work that they perform [Abbott, 1988, pp. 168-172]. It also, recognizes that the cost accountants' qualifications are not unique and a subset of the qualifications of the other groups. This feature undermined cost accountants' claim to a unique jurisdiction.

A plenary speech at the first Cost and Management Conference in 1927 reminded members of their connection with financial accounting while calling on them to rise above it:

Within the last fifteen or twenty years there has developed what, in my mind, is a new science, confused, at its inception, owing to the fact that it was an off throw from this older, dignified and splendid science of accountancy, and that is ... the science of industrial accounting . by the use of the word 'accounting', we are tying this new science up to this old science, and we are very apt, unconsciously and unintentionally, to cast reflection on the splendid work which the older science is doing, and I feel deeply that this work is something entirely different ... We are trying to build an entirely new science under an old name, the application of accounting data to the management of business, and we are - we must divorce ourselves from many of our old precepts and principles [McLeod, 1927].

In later years the probability of the management accountant achieving professional status independently of the public accountant was questioned. On several occasions the Society of Management Accountants raised the possibility of "unification" with the Chartered Accountants. The professional status of management accountants was felt to be at risk and could be assured by becoming a specialized branch of existing accounting associations instead of an independent organization [Coutts, 1958; Editorial, 1957b].