In January 1957, the Executive Committee of the American Accounting Association appointed the first committee on management accounting; the primary charge being "to clarify just what is meant by the term management accounting. In recent years there has been a growing awareness of the potential utilization of accounting data by management for internal purposes. At the same time there has been an increasing recognition of the limitations of accounting as it exists today in meeting these needs. Management accounting is the application of appropriate techniques and concepts in processing the historical and projected economic data of an entity to assist management in establishing a plan for reasonable economic objectives and in the making of rational decisions with a view toward achieving these objectives. It includes the methods and concepts necessary for effective planning, for choosing among alternative business actions and for control through the evaluation and interpretation of performance. Management accounting concepts are especially important in that they deal with the fundamentals of maximizing return on investment, a primary objective of the business entity. This is especially true in the field of marketing where the broad and complex problems of pricing, methods of distribution, marginal cost and product mix must be met and solved.

The Committee on Professional Education in Accounting has been considering, for the past two years, the general area of educational preparation for a career in accounting. The committee believes that its primary problem was to establish a concept of professional education for a career in accounting. This report is a summary of the committee's discussions and deliberations concerning the nature, objectives and implementation of professional education in accounting. The Report of Standards Rating Committee of the American Accounting Association' contained the following statement on objectives of the education of the accountant: "Three ultimate objectives of education for professional accounting are educating the citizen, education in business and education in accounting. A program of professional education should provide the student with the theoretical background necessary to proper interpretation of practical problems. The major objective of technical accounting coverage in a professional program should be to provide the graduate with the foundation to recognize, interpret and analyze the complex and specialized problems to be faced in his future career.