Cost Accountancy

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Cost Accountancy has been developed to meet the needs of the management of all those organisations which It has now become an essential part of accountancy which only a few decades ago was very much a part of the financial accounting.

The Institute of Cost and Management Accountants, London has defined 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, as is clear from the definition, is a science as well as an art. It is a science because it is a body of systematic knowledge having certain principles. It is an art because it requires the ability and skill in the application of the principles of cost accountancy to various managerial problems. It is also a practice since it requires a continued effort of a cost accountant in the field of cost accountancy. One has to have sufficient practical training so as to develop insight and know the intricacies.


Cost Accountancy has a wide field. It includes:

(i) Costing,
‘(ii) Cost Accountancy
(iii) Cost Control
(iv) Budgetary Control
(v) Cost Audit.

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