What is the role of management accounting?

Management accounting plays a crucial role in providing financial information that aids in decision-making within an organization. Unlike financial accounting, which focuses on the creation of financial statements for external stakeholders, management accounting is oriented towards domestic use by managers and internal teams. It involves the analysis of financial data, cost management, budget preparation, and performance evaluation. These elements are essential for managers to make informed strategic decisions, enhance operational efficiency, and optimize resource allocation.

In summary, the primary purpose of management accounting is to equip internal management with relevant financial insights that support planning, controlling, and decision-making processes, ultimately driving the organization's success.