Wilber C. Haseman
UNIVERSITY OF MISSOURI – COLUMBIA

MANAGEMENT ACCOUNTING LITERATURE: 1925 AND 1975

Abstract: A comparative analysis of management accounting articles from the technical journals of the National Association of Accountants in each of the periods 1919 to 1925 and May to June 1975 discloses changes in the nature of the articles and of their authors.

Several advances in Management Accounting have been made in the past few decades. The modern managerial accountant is called upon to do things which his antecedent probably never even heard of. For many companies, the computer has revolutionized the recording and analysis of data about the past and present. With new simulation techniques, managerial accountants are now reporting with considerable accuracy many things that will happen in, and to, their companies even before the events take place. It is not uncommon to find accountants in industry using linear programming, regression analysis, Monte Carlo methods., PERT, the learning curve, and input-output analysis. We seem to be entering the era of the information explosion, where information becomes the critical element for success in all types of economic endeavor, where competition reduces itself to a rivalry over better and more timely information.

Reflecting on these developments, one would expect that man-agement accounting literature also would change. What were managerial accountants writing about, say, 50 years ago? Who were writing the articles? How did they express themselves? Were the managerial accounting issues of that time greatly different, and in what ways from those of today?

Purpose of Study and Summary of Findings

The purpose of this study was to determine how managerial ac-counting literature has changed during the last 50 years. The main findings of the study may be summarized as follows:

1. Managerial accounting literature has become much more prolific.

2. Titles to articles have become somewhat shorter but less definitive.

3. Managerial accounting literature now covers a wider range of topics.

4. A larger proportion of the authors are now from aca demic life and a smaller proportion from business and industry.

Sample Selection

The first articles published in the technical journals of the Na-tional Association of Accountants were reviewed and compared with a similar number of articles published most recently by this Association. In those days the Association was called the National Association of Cost Accountants and the publication was a 53A”x 8%” semi-monthly magazine of some 15 pages called simply Official Publications. The journal title, NACA Bulletin, was used starting in September 1925. The rather odd number of 104 technical articles was chosen because it included all the technical articles published at a particular point in time. If 100 had been chosen, a decision would have to be made regarding which four titles to omit from the latest monthly journals. The technical articles included in the study did not include Association Announcements or similar presentations of a non-technical nature.

The first 104 technical articles published by the Association spanned a five year time period 1919-1925, roughly 50 years ago. The most recent 104 technical articles, used in this study spanned a time period of only eight months, May-Dec. 1975. From this it seems clear that managerial accounting literature has become much more prolific. One might speculate that this reflects at least two things. First of all, the field of managerial accounting may have advanced to a position of greater importance in our society so that more people need to know about the subject. Secondly, the subject may have become more complex so that more needs to be said about the subject to the people that need to know.

Identification of Topics Presented

The various topics appearing in managerial accounting literature can be identified in a number of different ways: (1) by examination of titles, (2) by searching the body of the article, (3) by focusing attention on the stated purpose of the article, or (4) by focusing attention upon the conclusion or summary of the article. In this study, topics have been identified mainly by examination of titles used. This worked rather well for articles appearing in the 1919-1925 period because titles were definitive and straight-forward.

For some articles appearing in 1975, the published titles did not make clear the topics within. For example, the titles “Silver Spoons” and “Counting Chickens Before and After They Hatch’’ hardly make clear that the topics within were “Cost Accounting for Sterling Silver Flatware Manufacture” and “Internal Control Procedures in Chicken Farming.” In these and other instances where titles seemed unclear, articles were scanned to identify the topics covered. In most instances, however, topics have been identified simply by examination of titles.

Keys Words Analysis

Topics identified from the various technical articles were classified using a type of key word analysis. First of all, each title was reduced to its primary words by eliminating all articles (i.e., it, a, the, their), prepositions (i.e., an, on, at, near), and conjunctives (i.e., and, but, therefore). Next, primary words were classified according to a reduced number of key words or key concepts recognizing the similarity in meaning of certain words or groups of words. For example, the key word MEASURE was used to represent ail those words with an idea relative to some step in accounting measurement such as “calculate” or “calculation,” “distribution,” “allocation,” etc. Similarly the word METHOD was used to represent all those words with an idea relating to some orderly process such as “system,” “model,” “procedure.” The key word AN INDUSTRY was used in a slightly different context to refer to all those many instances when a specific industry or class of business was cited by name. In this general manner, a limited number of key words was identified for each group of technical articles and many of the same key words appeared on both lists.

Certain words or concepts appeared more often than others. The frequency of occurrence of these key words was used as an indication of the importance of the topic to managerial accountants at that point in time. The variety of key words was used as an indication of the breadth of topics considered relevant to the professional field of managerial accounting at that point in time. Although the approach was somewhat subjective, it provided at least some basis for answering the questions posed earlier regarding changes in managerial accounting literature.

Figure 1
Key Words Most Commonly Used in 104
Titles to Managerial Accounting Articles
(number of times used)

from 1919-1925 Rank from 1975
COST 69 1 ACCOUNTING 23
AN INDUSTRY 50 2 ANALYZE 20
ACCOUNTING 30 3 AN INDUSTRY 14
FACTORY 26 4 PROFIT 11
METHOD 20 5 METHOD 10
USES 16 6 MEASURE 10
MEASURE 12 7 INFLATION 9
MANAGE 10 8 COST 8
LABOR 8 9 CORPORATlON 8
ANALYZE 7 10 MANAGE 8
OVERHEAD 7 11 FINANCE 8
PRINCIPLES 6 12 PERFORMANCE 7
STANDARD 6 13 DISCLOSURE 7
PERFORMANCE 5 14 TAX 7
ORGANIZATl0N 5 15 INTERNATIONAL 7
SCRAP 5

Other key words used more than two times budget, bibliography, EDP, uses, LIFO or FIFO, cash,
information, material, investment, present value, statistics, volume labor, law, lease, small business social action

Length of Titles

Technical articles during the 1919-1925 period employed somewhat longer titles than those of the 1975 period, and appeared to communicate more clearly the content within.

Figure 2

Number of Words in Titles of Accounting Technical Articles—1920’s & 1970’s

104 titles from 1919-1925 from 1975
All words 644 496
Primary words 441 367
Different key words 59 61

Haseman: Management Accounting Literature: 1925 and 1975

The average number of words per title was higher for the 1919-1925 titles in terms of primary words and key words as well as all words.
Figure 3
Length of Titles (average number of words per title)
104 technical articles all words primary words key words
from 1919-1915 6.2 4.2 2.9
from 1975 4.8 3.5 2.3

The reason why modern titles have been shorter may be a matter of style, a part of the move toward cryptic titles mentioned earlier. This also may reflect a change in the type of individuals who are authors.

Variety of Topics

Technical articles during the 1919-1925 period seemed to be con-centrated upon a narrower range of topics than those of the 1975 period. This strongly suggests that the topical boundaries of the field of management accounting have been expanded over the years. Figure 4 shows that 44.2% of the primary words used in the 1919-1925 titles were concentrated upon five key words. This compares with only 21.3% in the 1975 titles. Furthermore, the same relationship holds for the ten and the 15 most common key words.

Variety of Topics (percentage of total primary words)
titles of five most common ten most common 15 most common
104 technical articles key words key words key words
from 191 9-1 925 44.2% 56.2% 62.8%
from 1975 21.3% 33.0% 42.8%

There is additional evidence that the topical boundaries of man-agement accounting are wider now than in the 1919-1925 period. Ascanning of Figure 2 will indicate that the key words of the 1919-1925 period are strongly concentrated in the topical area of factory cost accounting (determining the factory cost of products), whereas the key words of the 1975 period range over a much wider variety of areas including “profits” (as distinct from costs), “analysis” (as distinct from mere measurement), and such wide ranging topics as “inflation”, “taxation”, and “international”. Two-thirds of the 191 9-1925 titles used the key word COST; less than 8 percent of the 1975 titles used that key word. For 1975 no single key word appeared in more than 23 percent of the titles.

On the other hand, it was a bit surprising to discover among the 1919-1925 articles some topics with a very modern flavor. For example the following four titles published in 1923 might appear to be of a much more recent vintage.

1/15/1923 “Prices, Profits, & Production (How to Determine the Effect of Manufacturing Effort and Volume on Costs, Selling Price, & Profits)” by A. F. Stock & M. B. Gordon, Lybrand, Ross Bros. & Montgomery, New York City.

5/1/1923 “Standard Costs—How to Establish & Apply Them” by William F. Worrall, International Silver Company, Meriden, Conn.

6/15/1923 “Should Material be Charged at Cost or Replacement Value?” by Charles F. Rittenhouse, Chas. F. Rittenhouse & Co., Boston, Mass.

8/15/1923 “A Punched Card System of Inventory Control” by W. V. Davidson, Davidson Systems, New York City.

Accounting Practices in Specific Industries

Almost half of the 1919-1925 titles described accounting practices in a specific industry identified by name. This tradition still appears among the 1975 titles, but much less prominently (less than 14% of the titles). It is quite natural for a professional accountant, writing about what he knows best, to refer to his day-to-day experiences. It is also an effective way for professional accountants to assimilate ideas being imparted by others. Therefore it is logical that this approach would continue over the years; in fact it is somewhat surprising that a larger proportion of today’s technical articles, are not written in that practical style. One might conjecture that one reason why that style has become less popular is because of changes which have taken place in who writes the technical articles, and who reads them.

Identification of Authors

An analysis of the authors of NAA articles revealed some interesting things. In the early years of the Association, accountants in industry wrote a larger proportion of the technical article than they do today. In 1919-1925 several of the accountants in industry were engineers by training and the title, cost engineer, has rather commonly used. While some of the authors in those early days were from public accounting firms, an equally large number were from engineering firms. Articles written by teachers were much less prominent than they are today.

There was some problem in identifying the nature of the authors in the 1919-1925 period since very little biographical information was given. Only 74 of the approximately 110 authors and co-authors could be classified. In 1975, biographical information was more complete so that all of the 112 authors and co-authors could be classified. The percentages in Figure 5 are based upon the total number of authors which could be accurately classified.

Figure 5
Authors of NAA Articles Classified by Professional Orientation
919-1925 1975
46% 35 %
20% 19%
12% 0%
10% 36%
12% 10%
100% 100%
1919-19
Accountants and Engineers in Industry 46% Public Accountants Members of Professional

Engineering Firms Teachers Other Total

Figure 5 rather clearly indicates that important shifts have taken place in the authorship of technical articles in management accounting. The shift has been away from the practical arena of applied accounting to the academic arena of accounting theory. Whether this shift is a progressive one, and what are the causes which underlie it cannot be answered by this study. One might also raise the question: Who reads the technical articles in management accounting? Undoubtedly some important shifts have taken place there as well.
Conclusions

Major changes have occurred in management accounting literature during the last 50 years. This literature is now much more prolific, and covers a considerably wider range of topics.

Titles to articles have become somewhat shorter, but are less definitive. A larger proportion of the authors are from academic life and a smaller proportion from business and industry. The reasons for these changes have not been established by this study, yet it seems probable that the causes are linked with an expansion in the boundaries of what we call management accounting and an ascending importance of management information, the critical output of our profession.