Management Accounting


Management Accounting involves the accumulation of financially related information in various data bases, and the classification and reporting of such information to various users of the information. Management accounting reports are designed in a way to be of benefit for internal users such as management. Additionally, management accountants are responsible to a lesser degree for financial statement presentations to external users. Management accounting, unlike financial accounting, is not subject to reporting according to generally accepted accounting principles (GAAP). Since information generated by management accountants is used internally, the reports may be very informal. The important characteristic its usefulness to management in making decisions.

Since management involves many decisions based upon cost information, costs and cost concepts are important topics for management accountants. How does cost accounting fit into the picture? Cost accounting is a subset of both financial and management accounting. Accurate product costs must be determined according to GAAP for external reporting purposes and according to decision relevancy for internal purposes. So cost accountants must be familiar with GAAP and also the report formats desired by management. 


Management Accounting occupies a much more important role in our economic society today than it did in the past. The Institute of Management Accountants (IMA)promotes the interests of this group of accountants. The primary difference in Financial and Management Accounting is the focus on external versus internal users of information. Management Accounting caters to internal users and Financial Accounting to external users.


Accounting 202 is the Management Accounting Course at UTM