The Development of Cost and Management Accounting - A Historical Perspective

Abstract

The aim of this paper is to describe the historical origin and development of cost and management accounting. This study has successfully linked the modern management accounting systems to the past to ensure a better understanding. It was gathered that the existence of cost accounting as one of the oldest managerial tools dates back to the ancient times. The formal beginning of cost and management accounting is ascribed to the industrial revolution of the nineteenth century which was characterized by the emergence of large business enterprises. The nineteenth century, according to Parker (1969) is regarded by accounting historians as the “costing renaissance” during which important developments in cost and management accounting took place and most of the methods that are in use today appeared in manufacturing companies.

Keywords: Cost Accounting, Management Accounting, Management Accounting System.

I. Introduction

2. The Origin of Cost Accounting

3.1 Cost Accounting in the Seventeenth and Eighteenth Centuries

3.2 Cost Accounting in the Nineteenth Century

3.3 Cost Accounting in the Twentieth Century

4. The Emergence of Management Accounting

4.1 Development of Management Accounting

4.2 Development of Management Accounting From 1700 – 1950s

4.3 Development of Management Accounting from Late 1950s – 1980

4.4 Development of Management Accounting From 1980 – Date

5. Summary and Conclusion