Publication Date

April 1997


Prior to 1933, accounting literature about capacity expressed great concern with realistic, or engineering-based, accounting. During eight years of working on a series of projects on accounting for capacity, the writers observed that a breakaway from realistic accounting for capacity occurred about 1933. McNair believes that this was the great disconnect that ultimately led to the decay of management accounting until its revival in the mid 1980's. Vangermeersch, who had conferred with Tom Johnson on this matter during the writing of Relevance Lost: The Rise and Fall of Management Accounting, believes that the disconnect was probably caused by the rise of accounting standardization due to the Truth and Securities Acts of 1933 and 1934. However, no hard evidence of the role of the S.E.C. in regards to management accounting was ever found. Thus, Vangermeersch had little to prove or disprove McNair's disconnect theory.



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