Cost accountancy has now become an essential part of accountancy, which is surprising given that, only a few decades ago, it was very much a part of financial accounting.
The Institute of Cost and Management Accountants (ICMA) defines cost accountancy as follows:
The application of costing and cost accounting principles, methods, and techniques to the science, art and practice of cost control and the ascertainment of profitability. It includes the presentation of information derived therefrom for the purpose of managerial decision-making.
Cost accountancy, as shown in this definition, is a science and an art. It is a science because it is a body of systematic knowledge with specific principles. It is also an art because it requires ability and skill in the application of the principles of cost accountancy to managerial problems.
At the same time, cost accountancy is a practice since it requires the continued efforts of a cost accountant in the field of cost accountancy. One has to have sufficient practical training so as to develop insights and know the intricacies.
Cost accountancy is a broad and diverse field. It includes:
Cost Accountancy FAQs
The institute of cost and management accountants (icma) defines cost accountancy as the application of costing and Cost Accounting Principles, methods, and techniques to the science, art and practice of cost control and the ascertainment of profitability. It includes the presentation of information derived therefrom for the purpose of managerial decision-making.
Cost accountancy is a broad and diverse field. It includes: - costing - cost accountancy - cost control - budgetary control - cost audit
The institute of cost and management accountants (icma) defines costing as the technique and process of ascertaining costs.
Budgetary control is a system for monitoring an organization's process in monetary terms.
Cost audit refers to the detailed verification of the correctness of costing techniques, costing systems, and cost accounts. In any manufacturing or service firm, it is crucial to calculate the correct cost of services to charge customers.
True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.
True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.