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

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

While public accountants work mostly with other public accountants, management accountants, scattered over a wide range of occupational pursuits work mainly with individuals who are 'foreign' to their discipline [Jones, 1973].

This isolation was seen as inhibiting the development of a sense of community on which management accountants might build a unique identity. This isolation also meant that cost accountants must work closely with non-professionals in completing their tasks. Abbott [1988, p. 118] notes that within professions, those practitioners who work in the most professional environment (that is, isolated from clients) are accorded highest status. The position of cost accountants within the organizational structure meant that their claims to status among accountants, and hence their ability to legitimate jurisdictional claims, were weakened.

The perception of management accounting as a marginal activity compared with financial accounting was reinforced by hiring practices that regarded financial accountants as substitutes for management accountants but not vice versa. This reflected the fact that about half of all Chartered Accountants would eventually work in industry rather than in public practice. At the same time, public practice was subject to various degrees of regulation that limited practice rights to Chartered Accountants and, in some Canadian provincial jurisdictions, Certified Public Accountants and Certified General Accountants. People who qualified as management accountants, therefore, could not practice as public accountants without meeting further regulatory requirements. The reverse was not true: a financial accountant could practice as a management accountant without further qualification.

There was also skepticism about the degree to which management accounting and other specializations had a distinct technical base. When new areas opened up in accounting, the evidence suggests that financial accountants were able to adapt to these career opportunities:

There has been a definable drift in all concerns toward a greater degree of specialized authority [but]... The same old boys seem to be doing these jobs which apparently points out special adaptability rather than special training, which is a good thing in any case [Editorial, 1954b].

Abbott [1988, p. 229] notes that in the higher status professions there are typically fixed career paths that provide specific training and experience. The distinction between the career paths of financial and cost accountants was used as a rhetorical device to assert the dominance of one profession over the other. Financial accountants completed an apprenticeship in accounting firms and a series of three examinations before receiving their designation; management accountants trained "on-the-job". The ability of financial accountants to take on the management accounting role without further training was used to demonstrate the lower professional status of management accounting and to undermine claims to a distinctive jurisdiction.