efore, is on supplying information for internal decision making. This implies that the management accountant has more flexibility than the financial accounting since a management accountant's only constraint is to balance usefulness and cost. There are no "generally accepted management accounting principles", as there are financial accounting principles, to govern the actions of the managerial accountant.
The key managerial function is that of decision making. The financial well-being of a company depends directly on the quality of the decisions made by its managers. Financial information is a primary factor in the ability of managers to make good decisions, and so accounting, both financial and managerial, come into importance when discussing a company's ability to make decisions.
Management accounting typically includes the following tasks: cost determination, cost control, performance evaluation and provision of financial information for planning and other decision making purposes. Cost determination is important for financial reporting, such as for inventory valuation and cost of goods sold, as well as for managerial functions. Since the actual cost data from a basic input (the financial records of an organization) becomes an input to the management planning and control process, it is essential that a managerial accountant should have a clear understanding of the various cost elements involved.
It is the managerial accountant's responsibility, for example, to provide information to management regarding taxes, tariffs and other costs associated with doing business in today's global economy. Shipping and transportation costs, currency fluctuations and their effects on cost analysis and costs associated with overseas production are also the responsibility of the managerial accountant to report to management. The management of the company can then determine what steps are appropriate to take in order to maximize the co...