Report of the Management Accounting Committee.

Abstract The purpose of this report is to crystallize the conceptual differences between management accounting and other fields of accounting in order to clarify professional thinking. The major assignment given to the 1961 Management Accounting Committee by the Executive Committee of the American Accounting Association was to investigate the distinction between concepts underlying financial reports for management decision making and control and those used for external public reporting. The objective of the assignment was to discover the basis for making a distinction between the two groups of concepts rather than to develop a comprehensive statement of the concepts themselves. In preparation for its study, the committee carefully reviewed the Management Accounting Committee reports of previous years; studied available literature in the management accounting field; and consisted with colleagues in industry, public practice and teaching. This was done in order that the members of the committee would incorporate in their thinking as broad and well-based a point of view as possible. Not only are the concepts underlying internal management reporting different from those of external public reporting, but also the framework upon which to build such concepts also must be different.