Learning Objectives

What is it Management Accounting?

Management Accounting is producing, interpreting and reporting internal reports to be used by internal users for the decision making of a business. In other words, management accounting is producing reports for management's eyes only.

External users (anyone outside the business) should not be able to get their hands on these reports.

Internal users include managers, owners and other employees of a business and is not intended for public disclosure. Management Accountants Management accountants are employees or contractors of a business who work to produce internal accounting reports on a regular basis as required by the business.

What are the types of internal reports?

Management accountants can produce a variety of internal reports such as:

Sales budgets
Capital expenditure budgets
Variance analysis
Cost volume profit (CVP) analysis
Break-even calculation

Internal reports are informal and are not required to be produced under any strict rules or guidelines. Although, most charted accountants are recommended to follow framework rules when producing internal reports anyway.